AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 1724
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....on account of provisions made for gratuity, leave encashment, postretirement medical benefits, LTC, Baggage allowance and Matching Contribution on Leave Encashment even though the assessee has failed to establish these provisions to be of ascertained in nature? 3. "Whether on facts and in circumstances of the case and in law, the ld. CIT(A) was right in law in deleting disallowance of Rs.9,03,93,108/- made by the Assessing Officer in computing the book profit u/s 115JB in respect of depreciation claimed on amortization of land Unclassified by the assessee even though there is no depreciation allowable on land under Companies Act and no rate of depreciation is provided in schedule XIV of Companies Act." 3. The assessee has taken the following grounds of appeal :- "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eyes of law and on facts. 2. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the AO in not allowing deduction amounting to Rs.8,74,67,641/- on the other income claimed by....
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....d 17.02.2021 in assessee's own case in AY 2013-14 in ITA No.5211 & 5106/Del/2016 as under :- "We have heard rival submissions and perused the materials available on record. The issue in the present ground is with respect to the disallowance u/s 14A. We find that identical issue arose for A.Y. 2012-13 and the Co-ordinate Bench of Tribunal held that AO was not justified in disallowing the expenditure by invoking the provision of Section 14A r.w.r 8D of the Act. The relevant observations of the Tribunal are as under: "8. Though the Ld. DR placed reliance on the assessment order there is no denial of the fact that the assessee submitted before the assessing officer that the investments were made even out of assessee's own funds or out of interest free funds provided by the government and no part of the borrowed funds were utilised for investment. Further it could be seen from the assessment order, on a perusal of the computation of income, learned Assessing Officer noticed that no disallowance was made by the assessee under the provisions of section 14A of the Act read with Rule 8D of the Rules and without having regard to the accounts of the assessee, learned Ass....
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.... the assessment year 2006-07 also. 12. In the circumstances we are of the considered opinion that the addition made by the assessing officer by invoking section 14A of the Act read with Rule 8D of the Rules cannot be sustained and the Ld. CIT(A) rightly deleted the same. No reasons to interfere with the reasoning given and conclusions reached by the Ld. CIT(A) on this aspect and therefore, the same is appended. Ground No. 1 of Revenue's appeal is, accordingly, dismissed. 30. Before us, no distinguishing feature in the facts of the present case as compared to assessee's own case for earlier years has been pointed out by the Revenue. Further it has also not brought on record any material to show that the decision of the Co-ordinate bench of the Tribunal in assessee's own case in earlier years has been set aside/ stayed or over ruled by the higher judicial forum. Considering the totality of the aforesaid facts and following the order of the Co-ordinate bench in the assessee's own case and for similar reasons we find no reason to interfere with the order of CIT(A). Thus the ground of the Revenue is dismissed." Respectfully following the aforesaid decision of th....
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....r gratuity, leave encashment, post-retirement medical benefits, LTC, baggage allowance etc., It was disallowed by the learned Assessing Officer on the ground that the said provision was not ascertained. Ld. CIT(A) while following the addition of the Hon'ble Punjab and Haryana High Court for the Assessment Year:2002-03 and also his own orders for the Assessment Year: 2010-11 and 2011-12 deleted the same. 14. It is argued before us that the provision towards meeting definite liability to be discharged on a future date in respect of the present employees and the quantification of such liability on the basis of actuarial valuation and basing on the report is ascertained liability and not covered under explanation 1 (c) of second proviso to section 115 JB of the Act is further submitted that this issue has been covered by the addition of the Hon'ble Punjab and Haryana High Court for the Assessment Year 2002- 03 in assessee's own case which has been followed consistently both by the Tribunal and the Ld. CIT(A) all through these years. 15. There is no dispute that the decision of the Hon'ble Punjab and Haryana High Court for the Assessment Year: 2002-03 in assessee's own....
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....be upheld. 17. After careful consideration of the submissions of the parties and going through the records, we find that the issue is covered in favour of the assessee by series of Tribunal orders. We may gainfully refer to Tribunal order dated 17.02.2021 in assessee's own case in AY 2013-14 in ITA No.5211 & 5106/Del/2016 as under :- "36. We have heard rival submissions and perused the materials available on record. The issue in the present ground is with respect to the addition of Rs.4.07 crores while computing the book profits u/s 115JB of the Act. We find that identical issue arose in assessee's own case in A.Y. 2012-13 before the Coordinate Bench of Tribunal. The Tribunal by following the order in assessee's own case for A.Y. 2006-07 upheld the order of CIT(A) by observing as under: "16. Now coming to the last ground of Revenue's appeal, in respect of the disallowance of Rs.3,32,81,500/- made in computing book profits under section 115 JB of the Act on account of amortisation of leasehold land, learned Assessing Officer disallowed the same stating that no rate of depreciation was prescribed either in the companies act or in the Income Tax Act, 1961 (for....
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....nterfere with the order of CIT(A) on this aspect. Thus the ground of the Revenue is dismissed." Respectfully following the aforesaid decision of ITAT, we dismiss this ground of Revenue's appeal. 18. In the result, the appeal filed by the Revenue is dismissed. ITA No.4915/Del/2019 (Assessee's appeal) 19. The only grievance of the assessee in this appeal is against the addition of Rs.8,74,67,641/- on disallowance of deduction u/s 80IA of the Act. 20. The AO made the disallowance holding that assessee is eligible for deduction u/s 80IA only in respect of profit obtained from generation & distribution of power and not from income earned and shown under the broad head 'other income' in the profit & loss account. 21. Assessee appealed before the ld. CIT (A). Ld. CIT (A) confirmed the disallowance made by the AO by relying upon the orders in assessee's own case for AYs 2010-11 to 2015-16. 22. Ld. Counsel of the assessee further submitted that similar issue has been decided by the ITAT in favour of the assessee in assessee's own case in the preceding assessment years in the following cases :- (i) AY 2010-11 bearing ITA No.3650 & 3738/Del/2015 order dated 0....
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....ted by corporate office and marketing office and interest expenditure of Rs.8,49,30,952 allocated by corporate office should be excluded from the debit side of the profit and loss account of the industrial undertaking for the purpose of deduction under section 80-I of the Income-tax Act, 1961; the fact that the allocated interest income from corporate office Rs.5,22,94,939 and Rs.3,97,44,811 credited to profit and loss account of Vijaipur unit in the assessment years 1995-96 and 1996-97 is of no consequence as both interest income and interest expenditure are liable to be excluded for the purpose of deduction under section 80-I of the Act." 48. Further, the Hon'ble Delhi High Court in the case of Pr. CIT vs. Bharat Sanchar Nigam Limited reported in 388 ITR 371 explaining the meaning derived from while computing the deduction u/s 80-IA of the Act, has held as under: "8. The question arose in the context of the Assessee being asked to explain why certain specific items categorized as 'other income' and 'extraordinary item' in the Profit and Loss Account in assessment year 2004-05 should not be excluded from the profit and gains of the Assessee. A....
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.... be claimed has consciously carved out an exception to specified undertakings/enterprises whose needs and priorities differ has taken care to expand the time line for claiming deductions. It has consciously enabled those undertakings/enterprise 'who fall under subsection (2A) to claim 100% deduction of profits and gains of eligible business for the first five years and upto 30% for the remaining five years in the ten consecutive assessment years out of the fifteen years starting from the time the enterprise started its operation. The legislature having ousted applicability of subsection (1) and (2) in the opening sentence brought in for the purposes of time line sub-section (2) into play but made no efforts whatsoever to put the assessee under sub-section (2A) to meet the stringent requirements that the profits so contemplated were to be "derived from". The requirements of the first degree nexus of the profits from the eligible business has not been brought into play." 11. As a result, the orders of both the AO and the CIT (A) to the extent they deny the Assessee, which in this case is in the business of providing telecommunication services, deduction in respect of the....
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....g of the term interest as well as drawing distinction between the source of sale proceeds and the source of interest is erroneous in law in the case of CIT vs. Govinda Choudhury & Sons (supra) the apex Court was called upon to decide as to the nature of interest received by the assessee therein. In the case before the apex Court the assessee who was executing Government contracts found itself involved in disputes with the State Government with regard to the payments due under the contracts and upon reference to arbitrators, the award included the principal sum as well as the interest for delay in payment of the principal sum. The assessee claimed that the interest was of the same nature as other trading receipts, but it was held by the Tribunal that the same was 'Income from other sources'. The apex Court laid down: "The assessee is a contractor. His business is to enter into contracts. In the course of the execution of these contracts, he has also to face disputes with the State Government and he has also to reckon with delays in payment of amounts that are due to him. If the amounts are not paid at the proper time and interest is awarded or paid for such delay, s....