AI Drafter 
TaxTMI 
TaxTMI 
2025 (12) TMI 466
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....ree appeals relate to the same assessee and the issues arising therein being admittedly common, they are being disposed of by this common order for the sake of convenience. 3. We shall first take up the Department's appeal in ITA No.1655/Ahd/2024 pertaining to A.Y. 2014-15. 4. Ground of appeal raised by the Revenue reads as under: "Whether on the facts and circumstances of case and in lam, the Ld.CIT(A) is justified in deleting the addition of Rs. 6.17,31,000 made by the AO on accord of treating Interest income earned from loans to staff and other loans as "Income from other sources without appreciating the fact that the assessee is not in the business of advancing loans to the staff?" 5. The solitary issue in the present appeal relates to the treatment of interest income earned by the assessee from loans to staffs and others. The order of the Ld. CIT(A) reveals that the ITAT in its order passed for the impugned year had restored the issue of adjudicating the nature of interest income received by the assessee from loans given to employees and others, whether to be treated as 'income from other sources' or 'income from business and profession', to the file of the L....
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.... as well as provision of electricity and water charges collected from water through its employees and contractors for facilities in the township, receipt from transit hostel, sale of scrap, insurance claim etc. The facilities were given to its employees for better conditions of employment. This was to improve the overall efficiency of the undertaking which is devoted to the single Purpose of generation of power. The Court, therefore, has no difficulty in accepting the submission of the Assessee that the interest received on advances and loans given to its employees are receipts in normal course of carrying its business and should be considered as income derived from its essential business activities. Likewise, the late payment by GRIDCO for the electricity supplied, is sought to be made up by GRIDCO by issuing bonds on which the Assessee earns interest. This also therefore, has a direct nexus with the essential business activity of the Assessee." (Emphasis Supplied) From the perusal of above judgment, the interest on staff loans is allowable as per directions of ITAT. In view of the facts and circumstances, we submit that the interest on staff loan is ord....
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....as unable to distinguish the decision of the ITAT in the preceding year either on facts or on law. In the light of the same, we confirm the order of the Ld. CIT(A) treating the interest income earned by the assessee amounting to Rs. 6,17,31,000/- as 'income from business and profession'. Ground raised by the Revenue is accordingly dismissed. 9. In effect, appeal filed by the Revenue is dismissed. 10. We shall now take up the appeal filed by the assessee in ITA No.1597/Ahd/2024 pertaining to A.Y. 2015-16. 11. The grounds raised by the assessee are as under: "1. The learned CIT(A) erred in law and facts in confirming the disallowance of Rs. 1,21,63,897/- u/s.14A of the Act without appreciating the law and facts of the case properly. 2. The learned CIT(A) erred in law and on facts in confirming the addition of Rs. 47,17,19,100/- being 15% of year end balance of capital grant without appreciating the law and facts of the case properly. 3. The learned CIT(A) erred in law and on facts in issuing direction to the Assessing Officer to verify the claim of unabsorbed forward business losses and unabsorbed depreciation and instead of issuing the direction, ....
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....penses was warranted u/s. 14A of the Act. However, the AO did not accept the contentions of the assessee in view of the CBDT Circular No. 5 of 2014 u/s.119 of the Act wherein it was specifically mentioned that the provisions of Section 14A r.w. Rul 8D of the IT Rules would apply even if the assessee did not earn any exempt income. The AO, accordingly, made disallowance of expenses u/s.14A of the Act invoking Rule 8D of the IT Rules, resulting in a disallowance of Rs. 1,21,63,897/-. The Ld. CIT(A) confirmed the order of the AO. 16. Before us, Ld. Counsel for the assessee contended that identical issue arose in the case of the assessee for A.Y. 2012-13 and A.Y 2014-15 wherein the matter was restored back to the file of the AO for fresh adjudication for examining the facts and figures with the direction to calculate the disallowance in accordance with law. Ld. Counsel for the assessee pointed out that the ITAT in its order in the case of the assessee in ITA Nos.3125 & 3165/Ahd/2015 and ITA Nos. 787 & 849/Ahd/2018 vide order dated 18.08.2023 had followed the decision of the ITAT in the case of Gujarat Urja Vikas Nigam Ltd. in ITA No.406/Ahd/2019, order dated 14.12.2022, while settin....
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.... capital grant to be in the nature of income of the assessee and accordingly made an addition of Rs. 47,17,19,100/- to the income of the assessee, which was confirmed by the Ld. CIT(A) in first appeal before him. 22. During the course of hearing before us, Ld. Counsel for the assessee contended that the ITAT had adjudicated this issue also in the case of the assessee in A.Y.2012-13 in ITA Nos.3125 & 3165/Ahd/2015 and ITA Nos. 787 & 849/Ahd/2018 vide order dated 18.08.2023 restoring the issue back to the AO for fresh adjudication. He pointed out that this was a legacy issue arising year-to-year and the ITAT had in A.Y. 2012-13 followed its own decision in the case of the assessee in ITA No.753/Ahd/2018, order dated 24.08.2022. He pointed out that the ITAT accordingly had directed the AO to re-adjudicate the issue in accordance with its directions in ITA No.753/Ahd/2018 in the case of the assessee itself. 23. Ld. DR fairly agreed with the same. 24. In the light of the same, we restore the issue of treatment of capital grants as income of the assessee to the extent of 15% thereof, back to the file of the AO to be adjudicated in accordance with the directions given in the case....