TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1190
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....which does not require any examination of facts and hence deserves to be admitted in view of the Hon'ble Supreme Court judgment in case of NTPC v. CIT 229 ITR 383 which has held that legal claims could be admitted at any stage of appellate proceedings. 4. In the grounds of appeal, the assessee has raised the following grounds: 1. The Ld DRP/AO have erred in law and on facts, and in the circumstances of the appellant's case in making an addition/adjustment of Rs. 53,24,861/- on account of the order of the Transfer Pricing Officer (TPO) u/s 92CA(3) and making an addition of Rs. 1,22,17,185/- on account various non-transfer pricing addition/disallowances. 2. The Ld DRP/AO have grossly erred in not granting an additional claim/allowances, amounting to Rs. 1,51,92,99,091/- made by the assessee during the course of assessment proceedings, on account of transfer of CERs and cancellation of CER contracts, short claim of deduction u/s 10A(1A), interest subsidy under TUF scheme, additional depreciation, depreciation on goodwill, deduction of VRS expenditure and of disallowance of ESIC & EPF employee contributions. GROUNDS OF OBJECTIONS IN RESPECT OF TRANSFER PRI....
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.... Donation to SRF Vidhalaya Chennai 11. The Ld. DRP/AO have erred in law and in facts and in the circumstances of the assessee by disallowing Rs. 4,20,000/- on account of donation made to SRF Vidhalaya School Chennai without appreciating that the payment was in the nature of staff welfare expense allowable as a deduction u/s 37(1) of the Income Tax Act, 1961. 12. That the Ld. AO be directed to allow deduction of Rs. 4,20,000/- u/s 37 of the IT Act. Disallowance of Rs. 78,260/- on account of short deduction of TDS 13. The Ld. DRP/AO have erred in law, on facts and in the circumstances of the case in notionally disallowing a sum of Rs. 78,260/- on alleged short deduction of TDS on wholly illegal, erroneous and untenable grounds. The Hon'ble ITAT may be pleased to direct the learned AO to delete the addition of Rs. 78,260/-. Computation of book profits under MAT and allowance of TDS credit 14. The Ld AO has erred in computing the book profits under MAT provisions at Rs. 6,78,65,08,494/-. 15. The Ld AO while computing the book profits u/s 115JB of the Act, has not considered the items to be deducted, viz Dividend in....
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....aw and legal claims are required to be entertained at any stage of the proceedings. 19. That the order of the Ld. Assessing Officer dated 30th November 2015 is bad in 5 law. 20. The above grounds are without prejudice to each other. 21. The appellate craves the leave to add, amend or alter all or any of the grounds of appeal. ADDITIONAL GROUNDS RAISED BEFORE THE ITAT [Ground Nos. 22 to 25] 22. That the Ld. AO have grossly erred in law and on the facts & circumstances of the assessee's case in making the addition of Rs. 1,17,18,925/- on account of disallowance u/s 14A of the Act while computing the book profits u/s 115JB of the Act, even when provisions of section 115JB do not provide for such disallowance and by not following the judicial precedent of the Hon'ble Delhi Tribunal in the case of Vireet Investment (P.) Ltd. [2017] 82 taxmann.com 415 (Delhi- Trib.) (Special Bench) including the other judicial precedent of the Hon'ble Tribunals, which have held that the computation u/s 115JB is to be made without restoring the computation as computed u/s 14A r.w.r. 8D. 23. That on the facts & circumstances of the case and in law, the ....
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.... regard to ground nos.3 to 6, relating to Corporate Guarantee, the relevant facts are, the TPO proposed adjustment of Rs. 53,24,861/- u/s. 92CA(3) of the Act on account of Corporate Guarantee Fee from AE, in this regard, ld. Counsel for the assessee submitted that the assessee has charged corporate guarantee fee @ 0.25% from its Associated Enterprises (wholly owned subsidiaries) for providing such guarantees. The basis for providing such guarantees were on the basis of quotation obtained from ICICI Bank for FY 2009-10. However, the TPO determined the corporate guarantee rate at 2.02% by taking the arithmetic mean of the bank guarantee rates obtained from HDFC, ICICI, Bank of Baroda, and SBI, as gathered under section 133(6) of the Act. The DRP following its earlier directions determined the arm's length corporate guarantee rate @ 0.50%. 5. Further it was submitted that in assessee's own case, ITAT has reversed the order of the DRP for various years. He further submitted that this issue is fully covered by the order of the coordinate Bench of ITAT in the assessee's own case for AY 2010-11, AY 2012-13, A.Y. 2014-15 & A.Y. 2016-17, wherein ITAT upheld that the corporate guarant....
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....shed a counter guarantee to the assessee, therefore, assessee is completely indemnified against any risk of default on the part of the AEs. It was further concluded that corporate guarantees does not involve any cost and therefore are out of the ambit of international transactions u/s. 92B of the Act thus not subject to assessment under Chapter-X. It was further submitted that TPO/DRP has rejected the valid comparable data obtained by the assessee in the form of quotation received from HDFC bank without assigning any cogent reason for such action. In view of the above, he requested that no adjustment is required as @0.25% charged by the assessee as corporate guarantee fee from its AE's is at arms' length and thus upward adjustment of Rs. 2,40,32,125/- be directed to be deleted. 11. Ld. DR of the Revenue relied upon the orders of the authorities below, but she did not controvert the contention of the ld. AR for the assessee that the issue is covered in favour of the assessee by the decision of the Tribunal in assessee's own case in the assessment year 2014-15 and neither produced any contrary decision. 12. Considered the rival submissions and material placed on rec....
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.... and the rate at which the AEs obtained funds with corporate guarantee of the assessee at 3.01% and thus computed the interest saved to be at 1.44%. He thereafter worked out the total guarantee fee that should have been charged 11 by using the interest saved rate of 1.44% at Rs. 172,00,08,122/-. He noted that since the assessee has already received Rs 22,854,407/-recommended the enhancement of income by AO to the extent of Rs 14,91,53,715/-. AO thereafter in the draft assessment order enhanced the income as suggested by the TPO. Aggrieved by the order of TPO, assessee carried the matter before the DRP. DRP noted that various jurisdictional decisions have held the guarantee fee rate to be near about 0.5% and TPO had not given any reason for applying a higher rate of 1.3% based on SBI general Bank guarantee fee. DRP also noted that in assessee's own case for A.Y. 2011-12, 2012-13 & 2013-14, DRP has held that the guarantee fee of 0.5% to be fair and just. It further noted that since the facts of the case in the year under consideration being similar to that of A.Y. 2013-14, it accordingly held the guarantee fee to be at 0.5% and accordingly directed AO/TPO to re-compute the adjustment....
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....o note that even TPO has used general bank rates obtained from various Indian banks. These bank guarantee rates are also in the nature of offers which are general rates and not specific to the assessee. Therefore, the approach of assessee's specific quotation saying the same as offers while on the other hand he himself uses the general bank guarantee rates which are again the offers and that too far from being comparable to the case. 14. Further the issue of using bank guarantee rates for benchmarking corporate guarantee transaction has been put to rest by the Hon'ble Supreme Court in case of Glenmark Pharmaceuticals Ltd. [2019] 107 taxmann.com 445 (SC), where in the judgment of Hon'ble Bombay High Court was upheld. Further, DRP in assessee's own case in subsequent years rejected the TPO's approach of using India band guarantee rates for benchmarking corporate guarantee. Therefore, bank guarantee rates as applied by the TPO is not an appropriate comparable while benchmarking the said transaction and hence approach of TPO is rejected. 15. In the instant case, the AEs to whom corporate guarantees have been extended are wholly owned subsidiaries of the assessee. The ....
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....ases. It is also noted that like previous years the TPO/DRP have rejected the valid comparable data obtained by the assessee in the form of quotation received from ICICI bank without assigning any cogent reason. In view of the aforesaid discussions and respectfully following the aforesaid precedent, we deem it fit and proper to direct the TPO to delete such adjustment of Rs. 53,24,861/- in respect of corporate guarantee fee from its AEs. Accordingly, Grounds No. 03 to 06 are allowed. 10. Apropos Grounds no. 07 to 10 and Additional Ground No.22 are interconnected therefore considered together. 11. The ground nos.07 to 10 relating to disallowance u/s. 14A of the Act amounting to Rs. 1,17,18,925/- are concerned, ld. AR submitted that assessee received exempt dividend income of Rs. 4,73,22,931/- and suo-moto disallowed an amount of Rs. 27,31,368/- u/s 14A r.w.r. 8D(2)(iii) being 0.50% of average value of investments of Rs. 54,62,73,678/- (which is not in dispute). He submitted that the assessee made investment made out of own surplus funds. He brought to our notice page 6 of the paper book that the average value of investments related to tax free income is Rs. 5,462.74/- lakhs an....
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....d considerable cogency in the contention of the Ld. AR that the instant issue is fully covered by the order of the Coordinate Bench of the Tribunal in assessee's own case for 2006-07, 2007-08, 2008-09, 2010-11 & 2012-13 wherein the Bench deleted the similar additions. In view of the aforesaid discussions and respectfully the aforesaid precedents, we deem it fit and proper to direct the AO to delete such disallowance of Rs. 15,32,818/- in the light of the aforesaid precedents in assessee's own case. Accordingly, Grounds No.48 to 54 are allowed in the aforesaid manner." 15. In view of the aforesaid discussions and respectfully the aforesaid precedents, we deem it fit and proper to direct the AO to delete such disallowance of Rs. 1,17,18,925/- in the light of the aforesaid precedents in assessee's own case. Accordingly, Grounds No.07 to 10 are allowed in the aforesaid manner. 16. Coming to additional ground no. 22 raised by the assessee pertains to the incorrect computation of book profits under section 115JB (MAT) of the Act, 1961, by making an addition of Rs. 1,17,18,925/- on account of enhanced disallowance under section 14A rwr 8D2(ii). 17. The AO, while completing th....
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....essee's own case. Accordingly, Grounds No.22 is allowed in the aforesaid manner. 21. With regard to Grounds no.11 & 12 relating to disallowance made by AO of an amount of Rs. 4,20,000/- paid by the assessee to SRF Vidyalaya School Chennai which has been claimed as business expenditure u/s 37(1) of the Income Tax Act, 1961 on the ground that school, which runs within the compound of textile business of the assessee, gives preference to children of employees of the company. The ld. AR submitted that assessee has taken the initiative to tap good talent across the industry and has taken a step towards the general welfare of the employees of the company. 22. The assessee placed reliance on the decision of the Coordinate Bench of the Tribunal in assessee's own case for A.Y. 2009-2010 and A.Y. 2010-11 wherein the coordinate Bench deleted such addition. 23. On the other hand, ld. DR of the Revenue did not submit any objections. 24. Considered the rival submissions and material placed on record. The relevant extracts of the order for the A.Y. 2010-11 is reproduced below : "26. Next issue is the disallowance made by AO of an amount of Rs. 4,28,000/- paid by the asses....
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....o.11 and 12 are allowed. 26. Apropos Grounds no. 13 relating to Disallowance of Rs. 78,260/- on account of short deduction of TDS. 27. Ld. DR of the Revenue relied upon the orders of the authorities below, noted from the CPC data that there was a notional default on account of short deduction of TDS amounting to Rs. 7,826/-. but he did not controvert the submissions of the ld. AR, vide its detailed submission dated 17.03.2015, furnished all necessary explanations and documentary evidence, including a screenshot of the TRACES portal [P. No. 774-776 of CLC], demonstrating that the default has subsequently been rectified. Further, an updated screenshot from the TRACES portal dated 22.07.2024 [P. No. 774-778 of CLC] clearly shows that there is no short deduction or non-deduction of TDS outstanding against the assessee. 28. Considered the rival submissions and material placed on record. We find that ld. AR has produced conclusive evidence from the TRACES portal to establish that no default subsists. The DRP has also failed to appreciate the factual correction available on record and has simply upheld the action of the Ld. AO without assigning cogent reasons. 29. In view of t....
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.... of book profits u/s 115JB of the Act. The claim for exclusion/inclusion of such items in computation of book profits was made by the assessee before lower authorities. However the lower authorities did not entertain the additional claim of the assessee. The items sought to be excluded / included through above grounds are as under: Capital receipts a) Exclusion of Rs. 4,39,72,72,157/- received by the assessee on account of transfer of Carbon emission reductions (CERs) from the book profit of the assessee. b) Exclusion of Rs. 3,08,96,338/- on account of interest subsidy received under the TUF Scheme. c) Exclusion of excise duty component amounting to Rs. 11,81,58,510/- on sale affected by eligible unit u/s 80IC (Kashipur unit) of worked out on reverse calculation mechanism being capital receipt in nature. Other exclusions/inclusions d) Exclusion of Rs. 35,02,570/- on account of provisions for doubtful debts written back. e) Exclusion of Rs. 4,00,00,000/- on account of provisions for doubtful advances written back. f) Exclusion of Rs. 1,54,10,239/- on account of provisions for investments written back. g....
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....items which were not considered by the lower authorities. We therefore set aside the issues relating to computation of books profits back to the file of AO to decide the same in accordance with law after granting a reasonable opportunity of being heard to the assessee. The assessee shall be free to file such documents, explanations, submissions as it deems fit in respect of this claim. Accordingly, these grounds are allowed for statistical purposes. 35. Apropos Grounds no. 16 relating to Short Credit of TDS & TCS of Rs. 4,62,613/- it is stated that assessee claimed TDS and TCS credit of Rs. 7,81,339/- and Rs. 29,269/- respectively in the revised return filed on 29.03.2013. However, the AO allowed credit of only Rs. 3,47,995/-, resulting in short credit of Rs. 4,62,613/-. The assessee filed rectification applications u/s 154 dated 23.02.2016 and 01.03.2017 seeking correction. 36. The assessee has placed on record copies of rectification applications filed under section 154 of the Income Tax Act, 1961, dated 23.02.2016 and 01.03.2017, requesting the AO to grant the balance credit of TDS and TCS as per Form 26AS and supporting documentation. However, no action was taken on these....
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.... the nature of capital receipts and therefore not chargeable to tax. In support of his contentions the ld. AR placed reliance on the decision Hon'ble High Courts as listed below: * Alembic Limited [ITA Nos. 553/2017 & 554/2017] (Gujarat High Court 28.08.2017) * L.H. Sugar Factory Pvt. Ltd. [2016-TIOL-1942-HC-ALL-IT] * Ambika Cotton Mills Ltd. [TS-144-HC-2021(MAD)] * LancoTanjore Power Co. Ltd. [[2021] 434 ITR 671 (Madras)] * Tamil Nadu Newsprint & Papers Ltd. [[2021] 130 taxmann.com 213 (Madras)] * Arun Textiles Pvt. Ltd. [2016-TIOL-2212-HC-MAD-IT] * Rajasthan State Mines and Minerals Ltd. [2017-TIOL-2297- HC-RAJ- IT] * Shree Cement Ltd. [ ITA No. 86/204 dated 22.08.2017] * Subhash Kabini Power Corporation Ltd. {[2016] 69 taxmann.com 394 (Karnataka)} * Dodson Lindblom Hydro Power Pvt. Ltd. [2019-TIOL-531- HC-MUM- IT] * My Home Power Ltd. {[2014] 46 taxmann.com 314 (Andhra Pradesh)} 43. It was also stated that cancellation of CER contracts should retain their capital nature as the primary contracts are capital in nature and reliance in this was placed on Hon'ble Delhi High Court in ....
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....ecision it has been held that carbon credit is in the nature of entitlement received to improve world atmosphere and environment reducing carbon, heat and gas emissions and therefore capital receipt. AO did not entertain the claim of the assessee for the reason that no revised return was filed by the assessee claiming the aforesaid amount as capital receipts. AO was of the view that the claim of the assessee cannot be allowed in the absence of revised return of income filed by the assessee and for the aforesaid conclusion, he relied on the decision of Hon'ble Supreme Court in the case of Goetze India Ltd. (200) 157 taxman-1 (SC). 27. Aggrieved by the order of AO, Assessee carried the matter before CIT(A). Before CIT(A), assessee sought the exclusion of receipts on account of CER certificates by treating it to be capital receipt. To support its contentions, before CIT(A), it was inter alia submitted by the assessee that the assessee had its refrigerant manufacturing facility at Jhiwana, Rajasthan for the production of HCFC-22. Manufacture of HCFC-22 generates HFC-23, a green house gas. Assessee had an option to emit such green house gas (HFC-23) in the air without impacting....
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....earned AR reiterated the submissions made before lower authorities and further submitted that the assessee had claimed the sale proceeds from the transfer of CER proceeds to be capital receipts and therefore not chargeable to tax. In support of his contentions that the receipts are capital receipts, he also placed reliance on the decision of Hyderabad Tribunal of the case of My home Power Ltd. (ITA No. 1114/Hyd/2009 order dated 02.11.2012. He pointed to the copy of the Tribunal order in that case which is placed at pages 146 to 152 of Case law Paper book. He thereafter submitted that the aforesaid order of tribunal has been upheld by Hon'ble Andhra Pradesh High Court and reported in (2014) 46 Taxmann.com 314 (AP) wherein it has been held that carbon credit is in the nature of entitlement received to improve world atmosphere and environment reducing carbon, heat and gas emissions and therefore capital receipt in nature and thus not chargeable to tax in terms of Section 2(24), 28, 45 and 56 of the Act. He further submitted that the issue raised in the present ground is a fully covered issue in favour of the assessee by the various decisions of Tribunal in assessee's own case for A.Ys....
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....] 46 taxmann.com 30 (Gujarat), after considering various decisions cited in the decision, has held the decision of the Supreme Court in the case of Goetze (India) Ltd. (supra) is confined to the powers of the assessing officer and accepting a claim without revised return. It has further held that any ground, legal contention or even a claim would be permissible to be raised for the first time before the appellate authority or the Tribunal when facts necessary to examine such ground, contention or claim are already on record. The relevant observations of the Hon'ble High Court are as under: "38. It thus becomes clear that the decision of the Supreme Court in the case of Goetze (India) Ltd. (supra) is confined to the powers of the assessing officer and accepting a claim without revised return. This is what Supreme Court observed in the said judgment while distinguishing the judgment in the case of National Thermal Power Co. Ltd.(supra) and that is how various High Courts have viewed the dictum of the decision in the case of Goetze (India) Ltd.(supra). When it comes to the power of Appellate Commissioner or the Tribunal, the Courts have recognized their jurisdiction to entert....
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.... judgments relied upon by the revenue and the Ld. AR on the issue under consideration. As observed in various judgments, the 'Carbon credits' or CERs represent the 'privilege /entitlement' given to the businesses for its efforts resulting in reduction of emission of greenhouse gases. Such CERs are tradable commodity and one party to Kyoto protocol is benefited by selling such entitlement to other parties to Kyoto protocol which are in deficit. During the year under consideration, the assessee has also received certain sum on account of sale of certain CERs entitlement to other parties. All such parties are foreign parties and the amount has been received in foreign currency. The question that we are really required to adjudicate upon is whether such money received by the assessee on sale of CERs/ carbon credits is taxable under Income-tax Act or not. The Hyderabad bench of the Tribunal in case of My Home Power Ltd (Supra) while dealing with the similar issue held as under: "24. We have heard both the parties and perused the material on record. Carbon credit is in the nature of "an entitlement" received to improve world atmosphere and environment reducing carbon, heat and g....
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....ount of exploitation of capital asset and it is capital receipt and not an income. Similarly, in the present case the assessee transferred the carbon credits like loom hours to some other concerns for certain consideration. Therefore, the receipt of such consideration cannot be considered as business income and it is a capital receipt. Accordingly, we are of the opinion that the consideration received on account of carbon credits cannot be considered as income as taxable in the assessment year under consideration. Carbon credit is not an offshoot of business but an offshoot of environmental concerns. No asset is generated in the course of business but it is generated due to environmental concerns. Credit for reducing carbon emission or greenhouse effect can be transferred to another party in need of reduction of carbon emission. It does not increase profit in any manner and does not need any expenses. It is a nature of entitlement to reduce carbon emission, however, there is no cost of acquisition or cost of production to get this entitlement. Carbon credit is not in the nature of profit or in the nature of income." "25. Further, as per guidance note on accounting for Self....
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....s capital in nature. We also find that ITAT Bangalore Bench in the case of Subhash Kabini Power Corpn. Ltd. vs. CIT reported in (2015) 37 ITR (T)106 (Bang.Trib.) had held that once the Assessing Officer had allowed the assessee's claim of deduction u/s 80IA in respect of income derived from sale of carbon credits, such order was not amendable u/s 263 of the Act. This order of ITAT, Bangalore Bench was also upheld by the Hon'ble Karnataka High Court." "6.1 Further, ITAT Hyderabad Bench in the case of CIT Vs. My Home Power Ltd. Hyderabad in ITA No. 1114/Hyd/2009 held that carbon credit receipts are capital in nature. This order of ITAT Hyderabad Bench was subsequently upheld by the Hon'ble Andhra Pradesh High Court in 365 ITR 82." "6.2 Accordingly, respectfully following the ratio of the settled judicial precedent as aforementioned, we allow the additional grounds raised by the assessee and hold that the income from sale of carbon credits is capital in nature." 5.3 Coming to the judgments relied upon by the AO and the Ld. CIT(A) and which have been further relied by the Ld. DR, we are of opinion that such cases do not support the case of revenue. As poi....
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....Madras)] v. Tamil Nadu Newsprint & Papers Ltd. [[2021]130 taxmann.com 213 (Madras)] vi. Arun Textiles Pvt. Ltd. [2016-TIOL-2212-HCMAD- IT] vii. Rajasthan State Mines and Minerals Ltd. [2017- TIOL- 2297-HC-RAJ-IT] viii. Shree Cement Ltd. [ ITA No. 86/204 dated 22.08.2017] ix. Subhash Kabini Power Corporation Ltd. {[2016] 69 taxmann.com 394 (Karnataka)} x. Dodson Lind blom Hydro Power Pvt. Ltd. [2019- TIOL-531-HC-MUM-IT] xi. My Home Power Ltd. {[2014] 46 taxmann.com 314 (Andhra Pradesh)} 5.6 Further, we are not aware of any contrary judgment of any High Court on the issue nor the Ld. DR could point out any contrary judgment on the issue. Therefore, respectfully following the ratio of the Hon'ble High Courts as discussed above as well the orders of the ITAT including the jurisdictional bench of the Tribunal, we are of the view that carbon credits/CERs are in nature entitlement accrued to the assessee on account of its efforts to reduce the emission of harmful greenhouse gases. They have arisen due to environmental concerns and therefore cannot be said to be 'connected with' or 'incidental to' the business activiti....
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....ch it was to be included as a part of the book profit. But where a receipt is not in the nature of income at all it cannot be included in book profit for the purpose of computation under Section 115JB of the Income Tax Act, 1961. For the aforesaid reason, we hold that the interest and power subsidy under the schemes in question would have to be excluded while computing book profit under Section 115 JB of the Income Tax Act, 1961." 6.5 Further ITAT, Lucknow Bench, in case of L.H. Sugar Factory Ltd. (ITA No. 717 & 418/LKW/2013 and others), held as under: - "4. We have considered the rival submissions. We find that the issue in dispute as per Ground No. 1 of appeal is regarding nature of receipt on account of sale of carbon credit and in the case of CIT Vs. My Home Power Ltd. (Supra) also, the dispute before Hon'ble Andhra Pradesh High Court was this as to whether the amount received by the assessee on transfer of carbon credit is capital receipt or Revenue receipt. It was held by Hon'ble Andhra Pradesh High Court in that case that carbon credit is not an offshoot of business but an offshoot of environmental concerns and no assets is generated in the course of busine....
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....ipts to be capital receipts and for which AO had placed reliance on the decision of Hon'ble Apex Court in the case of Goetze India Ltd. (supra). The order of AO was upheld by DRP. We also find that Hon'ble Gujarat High Court in the case of CIT vs. Mitesh Impex [2014] 46 taxmann.com 30 (Gujarat), after considering various decisions cited in the decision, has held the decision of the Supreme Court in the case of Goetze (India) Ltd. (supra) is confined to the powers of the assessing officer and accepting a claim without revised return. But it does not bar the appellate authorities to entertain the legitimate claim. 49. That apart on the merits of the issue, we find that identical issue arose before the Co- ordinate Bench of Tribunal in assessee's own case in A.Y. 2006-07 & 2009-10. The Co-ordinate Bench of Tribunal in ITA No 6693/Del/2018 and ITA No. 774/Del/2017 order dated 07.02.2022 and 23.02.2023 respectively has decided the issue in favour of the assessee. 50. Before us, ld. DR has not controverted the factual matrix from earlier decision nor has pointed to any distinguishing feature in the facts of the case in the year under consideration and that of the earlier years. Rev....
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....aim of Rs. 8.36 crores. This error occurred due to a calculation mistake committed by the assessee's Chartered Accountant while issuing Form 56. Upon detection of the error, the assessee obtained a revised Form 56 from the Chartered Accountant certifying the correct figure and, vide its submission dated 09.03.2015, claimed the additional deduction before the Assessing Officer. 54. The Assessing Officer, however, did not entertain the revised claim on the ground that it was not made in the original return of income. The Dispute Resolution Panel, while upholding the Assessing Officer's view, placed reliance on the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. v. CIT [(2006) 284 ITR 323 (SC)] to hold that a fresh claim not made in the return cannot be entertained during the course of assessment. 55. Before us, the ld. AR submitted that the claim for additional deduction is not a new claim but a mere rectification of a computational error. It was contended that the assessee had already claimed deduction under section 10A(1A) and that the quantum was incorrectly computed due to a clerical mistake, which was subsequently rectified through a revised Form 56 duly certi....
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....national Tractors Ltd. (supra) has categorically held that a bona fide mistake or misreporting in computation cannot deprive the assessee of a lawful deduction. Similarly, in E-Funds International India Pvt. Ltd. (supra), it was held that the Assessing Officer must determine the correct deduction under section 10A as per law irrespective of the amount claimed in the return. 59. In the present case, the assessee has substantiated its claim with a revised certificate and complete supporting documents. The mistake being clerical and arithmetical in nature, denial of the additional deduction merely on the ground of procedural technicality would defeat the substantive justice envisaged under the Act. We, therefore, hold that the authorities below erred in rejecting the claim solely on procedural grounds without examining the correctness of the computation. The Assessing Officer is directed to verify the revised working and supporting evidence furnished by the assessee and, upon due verification, allow the additional deduction of Rs. 8,36,29,209/- under section 10A(1A) of the Act. 60. In the result, the ground raised by the assessee is allowed for statistical purposes with the dire....
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....d by the Hon'ble Supreme Court in PCIT v. Nitin Spinners Ltd. [2021] 130 taxmann.com 402 (SC), thereby affirming the High Court's view 67. Further reliance has been placed on the judgment of the Hon'ble Delhi High Court in PCIT v. Ansal Properties & Infrastructure Ltd. [2024] 460 ITR 341 (Delhi), where it was held that merely because an assessee inadvertently offers a receipt for taxation, the Revenue cannot levy tax if the receipt does not constitute income under the law. The Hon'ble Court emphasized that tax cannot be levied merely on admission or mistake and that the charge must flow from the statute. 68. Considered the rival submissions and material available on record. The limited issue before us is whether the interest subsidy received under the Technology Upgradation Fund Scheme constitutes a capital receipt or a revenue receipt. It is a settled in various judgments of Hon'ble High Court discussed above and in assessee's own cases by coordinate benches that interest subsidy under TUF is a capital receipt and hence cannot be included in the total income for levying tax thereon. 69. The coordinate Bench in the assessee's own case for the AY 2009-10 has held as under :....
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.... India Ltd. (supra). 59. On the merits of the claim with respect to the interest subsidy under Technology up-gradation fund (TUF), Learned AR submitted that the identical issue arose before the Tribunal in the case of the assessee in A.Y. 2012-13. He submitted that the issue was decided in Assessee's favour by the Tribunal. He pointed to the decision in assessee's own case for A.Y. 2012-13 order dated 24.02.2020 placed in the paper book. He thereafter submitted that interest subsidy received under TUF scheme was claimed as capital receipt i.e. A.Ys. 2013-14, 2014-15 & 2015-16 and the same has been accepted by Revenue. He placed on record the copy of the computation of income in assessment order for those years. He, therefore, submitted that the issue may be remitted back to the lower authorities for deciding the issue afresh. 60. Learned DR on the other hand did not controvert the factual submissions made by Learned AR but however supported the order of lower authorities. 61. We have heard the rival submissions and perused the material available on record. The issue raised in the present grounds is about CIT(A) not entertaining and adjudicating the claims....
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....tries (2004) 88 ITD 273 (Mum.)(SB) * CIT vs. Birla VXL Lt. (2013) 90 DTR 376 (Guj.)(HC); * Hydro Carbons & Chemicals vs.- ACIT (ITA No. 1982- 86/Kol/09) * Indo Rama Synthetics (I) Ltd. vs. ACIT (2012) 33 CCH 526 (Del.)(ITAT). * CIT v Gloster Jute mills Ltd ITA no. 766/Kol/2010 * Shree Balaji Alloys v. CIT [2011] 333 ITR 335/198 Taxman 122/9 taxmann.com 255 (J&K) 25. The ld. AR has further submitted the department has in subsequent years accepted the assessee's claim of interest subsidy on TUF scheme as capital in nature as no addition has been made in subsequent years. 26. Ld DR relied upon the orders of authorities below. 27. We have heard the rival contentions, perused the relevant findings and as well as material referred to before us at the time of hearing. It is a settled position that purpose of subsidy or incentive and not the nomenclature of such incentive have to be seen for the purpose of deciding its nature as capital or revenue. In the judgment of Ponni Sugars & Chemicals Ltd. (Supra), the Hon'ble Apex Court have held that character of the receipt of a subsidy in the hands of recipient assessee has ....
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....djudicate the claim of the assessee. Assessee shall also be free to file such documents, explanations, submissions as it deems fit in respect of this claim. Needless to state that the AO shall grant adequate opportunity of hearing to the assessee. 67. In the result, this ground of the assessee is allowed for statistical purposes". 70. Accordingly, we hold that the interest subsidy of Rs. 3,21,55,428/- received under the Technology Upgradation Fund Scheme is capital in nature and not chargeable to tax. The Assessing Officer is directed to exclude the said amount from the taxable. In the result, Ground No. 17(d) raised by the assessee is allowed. 71. The assessee submitted that the receipt on account of TUF subsidy being capital in nature and therefore ought to be excluded from the computation of book profits under section 115JB of the Act. In support of its contention, the assessee relied upon various judicial precedents including: * CIT v. Ankit Metal & Power Ltd. [TS-410-HC-2019 (Cal.)], wherein it was held by the Hon'ble Calcutta High Court that capital receipts which are not in the nature of income cannot form part of book profits under section 115JB. ....
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....sions for doubtful advances written back. f) Exclusion of Rs. 1,54,10,239/- on account of provisions for investments written back. g) Inclusion of Rs. 22,66,432/- on account of provision for doubtful debt created. h) Inclusion of Rs. 7,64,706/- on account of provision for doubtful advances created i) Inclusion of Rs. 9,07,600/- on account of provision for doubtful advances created 39. The assessee placed reliance upon the following judgments to exclude capital receipts from book profits u/s 115JB. * Binani Industries Ltd. [TS-111-ITAT-2016(Kol) * L.H. Sugar Factory Ltd. (ITA Nos 417, 418 & 339/LKW/2013) also approved by Hon'ble Allahabad High Court [2016-TIOL-1942-HC-ALL High Court-IT]. * PCIT v. Ankit Metal & Power Ltd. [416 ITR 591 2019] Cal High Court * Alok Industries Ltd. [TS-313-ITAT-2018] "40. In respect of exclusion of other items from book profits the assessee has submitted that as per Explanation 1 to section 115JB of The Income Tax Act, 1961, the amount withdrawn from any reserves should be reduced from the net profit to determine book profits. It was argued that when such provi....
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....uld have granted the correct deduction after due verification. a) CIT v. Ramco International 221 CTR 491 (P&H); b) CIT v. Natraj Stationery Products (P) Ltd., (2009) 312 ITR 222; c) Chicago Pneumatic India Ltd. v. Deputy Commissioner of Income Tax (2007) 15 SOT 252 (Mumbai); d) MIT Mohan Singh Kahlon [2013] 39 taxmann.com 145 (Chandigarh-Trib.) (P. no. 896-901 of Case Law Compilation); e) Mrs. Meena S. Banerji vs. ITO [2007] 14 SOT 569 (Mumbai-Trib(P. no. 902- 910 of Case Law Compilation) and f) Anchor Pressings (P.) Ltd. vs. CIT [1986] 27 taxman 295 (SC) (P. no. 911-914 of Case Laws Compilation). 79. The Ld. DR of the Revenue relied upon the orders of the authorities below, and he did not controvert the contention of the ld. AR for the assessee that the issue is covered in favour of the assessee by the decision of the Tribunal in assessee's own case in the assessment years 2009-10, 2010-11, 2012-13, 2014-15, 2015-16 and 2016-17 and neither produced any contrary decision. 80. Considered the rival submissions and material placed on record. We find considerable cogency in the contention of the Ld. AR that the instant issue i....
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....record. The issue in the present ground is with respect to the claim of additional depreciation u/s 32(1)(iia) of the Act. It is the case of the assessee that it did not claim the additional depreciation in the return of income but was claimed before the AO but however AO did not discuss the issue and when the matter was carried before the DRP, DRP also did not allow the claim of additional depreciation. We find that identical issue arose in assessee's own case in A.Y. 2010-11. The Co-ordinate Bench of Tribunal restored the issue back to the file of AO for considering the claim of assessee by observing as under. "44. The facts as submitted are that assessee claimed additional depreciation @10% (half of 20%) amounting to Rs. 18,67,13,454/- on assets being the plant and machinery put to use for less than 180 days during the relevant assessment year 2010-11. The assessee claimed that in respect of additional 180 days or more is not applicable. Therefore in view of assessee, it is eligible to claim to full additional depreciation @20% on value of assets put to use during the year irrespective of timing of such put to use during the balance 10% left unclaimed - Rs. 18,67,13,454....
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.....Y. 2012-13. Before us, no distinguishing features in the facts of the case in the year under consideration and that of the earlier years has been pointed out by Revenue. Revenue has also not placed any material on record to demonstrate that the ITAT orders in assessee's own case for earlier years has been stayed/ set aside/ overruled by higher judicial forum. We therefore, following the reasoning of the Coordinate Bench for A.Y. 2010-11 and for similar reasons set aside the issue back to the file of AO to consider the same on merits after considering the submissions made by assessee and in accordance with law. The AO shall be free to call for such information and explanations as he deems fit to adjudicate the claim of the assessee. Needless to state that AO shall grant adequate opportunity of hearing to the assessee and the assessee shall also be at liberty of file such documents, explanations and submissions as deemed fit in respect of its claim. Thus the ground of assessee is allowed for statistical purposes". "63. Since the facts of the case in the year under consideration are identical to that of A.Y. 2014-15, we for the reasons given while deciding the issue A.Y. 201....
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....with the similar directions. Accordingly, the Ground No.17(e) is allowed for statistical purposes. 82. Apropos Grounds no.17(f) relating to disallowance of depreciation of goodwill amounting to Rs. 60,52,923/-, which was inadvertently left to be claimed while filing the tax return. 83. During the assessment proceedings, the assessee, vide submission dated 17.03.2015, made an additional claim before the Assessing Officer seeking allowance of depreciation on goodwill as per the provisions of Section 32(1)(ii) of the Act, contending that goodwill constitutes an intangible asset eligible for depreciation. 84. The AO, while finalizing the assessment order, declined to entertain the assessee's additional claim on the ground that such a claim was not made in the original or revised return of income. The AO, therefore, did not grant depreciation on goodwill, relying on the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. v. CIT (284 ITR 323) and the same has been upheld by the DRP. 85. The ld. AR submitted that the issue is fully covered by the order of the ITAT in assessee's own case in different years wherein, the ITAT upheld that goodwill is an intangible assets ....
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....aid manner. 88. Apropos Grounds no.17(f) relating to allowance of deduction under section 35DDA of the Act, 1961, amounting to Rs. 23,88,577/-, being the amortized portion of expenditure incurred under a Voluntary Retirement Scheme (VRS) in earlier years, which was inadvertently left to be claimed in the return of income. Assessee vide submission dated 09.03.2015 [P. no. 241-242 of P.B.] had made such additional claim w.r.t. allowance of deduction of Rs. 23,88,577/- u/s 35DDA of the Act on account of voluntary retirement scheme. 89. The assessee incurred expenditure under the Voluntary Retirement Scheme (VRS) during Assessment Years 2007-08 and 2008-09. For AY 2008-09, an expenditure of Rs. 85,44,197/- was incurred, of which Rs. 17,08,839/- (1/5th) is eligible for deduction in the current year (being the fourth year). For AY 2007-08 Rs. 33,98,690/- was incurred, of which Rs. 6,79,738/- (1/5th) is eligible for deduction in the current year (being the fifth year). 90. These expenditures were reported in the tax audit report filed earlier. The assessee inadvertently missed claiming the total eligible deduction of Rs. 23,88,577/- in the return and requests that this be allowed....
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....d by the order of the ITAT in the assessee's own case wherein the ITAT remitted the matter back to the file of Ld. AO. 98. Ld. DR of the revenue did not controvert the contention of the ld. AR. 99. Considered the rival submissions and material placed on record. The relevant findings of decision of the coordinate bench of the Tribunal for the A.Y 2012-13 is reproduced below: "36. Facts as submitted to us are that during the financial year, one of the unit at Technical textiles business at Kashipur has made sale amounting to Rs. 1,26,53,28,518/- inclusive of excise duty. Excise duty component on such sales come to Rs. 11,81,58,510/- by reverse working mechanism. Such excise duty component, as claimed by the assessee being in the nature of capital receipt, be excluded from the taxable income of the assessee. The AO did not entertain the additional claim of the assessee. The DRP did not admit the additional claim of the assessee relying on the judgment in Goetze (India) Limited vs CIT (supra)". "37. Having heard the assessee, we hereby remand back the issue to the file of the AO for fresh adjudication. The assessee shall be free to file such documents, expla....
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.... per Explanation 1 to section 115JB of The Income Tax Act, 1961, the amount withdrawn from any reserves should be reduced from the net profit to determine book profits. It was argued that when such provision was originally made, the same was added to the book profits u/s 115JB and thus it is logical to reduce the amount of provisions written back from such book profits". "41. We have heard the rival contentions, perused the relevant findings and as well as material referred to before us at the time of hearing. The issue involves additional claim which were not adjudicated by the lower authorities. We therefore set aside the issues relating to computation of books profits back to the file of AO to decide the same in accordance with law after granting a reasonable opportunity of being heard to the assessee. The assessee shall be free to file such documents, explanations, submissions as it deems fit in respect of this claim". 100. Respectfully following the earlier order in assessee's own case for AY 2012-13 we hereby remit back the issues to the file of the AO for fresh adjudication. The assessee shall be free to file such documents, explanations, submissions as it deems ....
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....the appellant, being the parent company on behalf of its wholly owned subsidiary, as a matter of business prudence and to protect its own commercial interest. The appellant does not incur any cost by extending such corporate guarantee to its AEs nor assumes any risk as entire capital/assets of its AEs are held directly or indirectly by the appellant. 7. The Hon'ble ITAT may be pleased to hold:- 7.1 That extension of corporate guarantee by the appellant on behalf of its AEs [wholly owned subsidiaries] is not an international transaction and, therefore, not amenable to any adjustment under Chapter X of the Income Tax Act. 7.2 In the alternative and without prejudice to the above, the Hon'ble ITAT may be pleased to hold that no adjustment is required as 0.25% charged by the appellant as corporate guarantee fee from its AEs [wholly owned subsidiaries] is at arm's length and thus upward adjustment of Rs. 1,07,03,134/- be directed to be deleted. 7.3 That the corporate guarantee fee benchmarked by the appellant under CUP method based on specific quotations obtained from HDFC Bank & ICICI Bank be held at arm's length. Interest on....
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....amount of interest expense of Rs. 55,83,87,549/- is indirectly attributable for earning a dividend income of Rs. 6,47,53,729/-. 14. That the Ld. DRP/ AO has grossly erred in law and on the facts & circumstances of the appellant in attributing interest u/r 8D(2)(ii) although all loans were explained to be for specific business purpose. 15. That the Ld. DRP/AO has failed to appreciate the fact that the appellant's owned funds/reserves far exceeded the investments, therefore no interest should be attributed u/r 8D(2) of the IT Rules. 16. Without prejudice to above, the Id. DRP/AO has erred in law and in facts of the case by wrongly computing the disallowance u/s 14A at Rs. 1,13,23,2871- instead of Rs. 81,88,5791- by considering incorrect values of the opening balance of investments and closing balance of total assets as per Rule 8D(2)(ii). 17. That the Ld. AO be directed to delete the enhancement of disallowance of Rs. 72,78,115/- made u/s 14A of the IT Act. Addition of CERs as revenue receipts - Rs. 2,62,69,14,276/- 18. The Id. DRP/AO has grossly erred in law and in facts and circumstances of the case in treating the amount re....
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....off 19,16,171/- on account of provision of doubtful debts/advance written back. 27. The Ld DRP/AO has grossly erred in law and on the facts of the case in not excluding the amount received from transfer of CERs amounting to Rs. 2,62,69,14,276/-, being a capital receipt in nature, from the book profits under section 115JB of the Act. Other Claims made during the assessment proceedings 28. The Ld DRP/AO has grossly erred in law and on the facts of the case, in not allowing the following allowances/claims made by the appellant during the course of the assessment proceedings: (a) claim of profit based deduction under section 80IA amounting to Rs. 17,66,44,282/- in respect of its Wind Power Plant (WPP) which was inadvertently left to be claimed while filing the return of income. (b) allowance of remaining additional depreciation @ 10% U/S 32(1)(iia) amounting to Rs. 19,10,10,907/- Non-Grant of Brought Forward Losses and Deduction under Chapter VI- A of the Act 29. The Ld. AO has grossly erred in law and facts of the case by not allowing the set off of brought forward assessed Long Term Capital Losses against current year'....
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....ature, hence, not adjudicated and dismissed as such. 106. With regard to Ground Nos.4 to 7 regarding corporate guarantee, these grounds are covered by our above decision in ITA No.80/Del/2016 for AY 2011-12 vide paras 8 & 9 and respectfully following the same, these grounds are allowed. 107. Apropos grounds no. 8 to 11 relating to upward adjustment of Rs. 9,41,098/- (using LIBOR+250 basis points i.e. 3.513% as ALP) on the ground that interest charged by the appellant on foreign currency loans granted to its AE @ LIBOR+225 basis points does not meet the arm's length rate which according to TPO / DRP should be LIBOR+250 bps. 108. Ld. AR of the assessee brought to our notice relevant facts, the assessee had extended foreign currency loans of USD 9,000,000 to its wholly owned subsidiary, SRF Global B.V. (Netherlands), and charged interest at the rate of 6M LIBOR + 225 basis points (3.513% p.a.). The said rate was benchmarked using the Comparable Uncontrolled Price (CUP) Method, supported by a sanction letter from Citibank, which had advanced a loan to the same AE at 6M LIBOR + 225 bps. The TPO, however, disregarded the assessee's benchmarking and adopted 6-month LIBOR + 450 bp....
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....er authorities. 114. Considered the rival submissions and material placed on record. The issue under consideration relates to determining the arm's length price of interest charged by the assessee on a foreign currency loan and on delayed receivables from its AE. It is an undisputed fact that the loan advanced by the assessee to its AE was denominated in foreign currency (USD). The Hon'ble Delhi High Court in Cotton Naturals (I) Pvt. Ltd [ITA no.233/2014, Delhi High Court] has held that the appropriate benchmark for such transactions is the rate prevailing in the currency in which the loan is denominated, i.e., LIBOR. 115. The coordinate benches of this Tribunal in the assessee's own cases for A.Ys. 2009- 10, 2010-11, and 2014-15 have consistently accepted the LIBOR benchmark for such foreign currency loans and have deleted similar adjustments. The Revenue has not brought on record any contrary material or judgment to deviate from the established position. Further, the internal CUP evidence in the form of the Citibank loan to the same AE at LIBOR + 225 bps substantiates that the assessee's rate is consistent with arm's length standards. The relevant extract of the judicial pr....
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....5. He submitted that while deciding the issue for A.Y. 2014-15, the Hon'ble Tribunal vide order dated 13.12.2021 and by relying on the order of the Tribunal for A.Y. 2010-11 has decided the issue in assessee's favour. He pointed to the relevant finding of the Tribunal at pages 465 to 467 of the order. He submitted that the facts of the case in the year under consideration are identical to that of A.Y. 2010-11 and 2014-15 and therefore following the order for A.Y. 2014-15, the addition proposed by TPO and upheld by CIT(A) needs to be deleted. 21. Learned DR on the other hand did not factually controvert the submissions of Ld AR but however strongly supported the order of lower authorities. 22. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the adjustment of interest made on account of the amount lent by the assessee to its AEs. We find that identical issue arose before the Tribunal in assessee's own case in A.Y. 2014-15 and Co-ordinate Bench of Tribunal by following the order of Tribunal in assessee's own case for A.Y. 2010-11 has decided the issue in favour of the assessee by obs....
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....re in the facts of the case in the year under consideration and that of the earlier years revenue has also not placed any material on record to demonstrate that the order of tribunal in assessee's own case for AY 2010-11 & 2014-15 has been stayed /set aside/ overruled by the higher judicial forum. We, therefore, following the order of the tribunal in assessee'e own case for A.Y.2014-15 and for similar reasons hold that no adjustment on account of interest is called for in the present case. We, therefore, direct its deletion. Thus the ground of assessee is allowed." 116. We, therefore, following the judicial precedent of the Hon'ble Jurisdictional High Court in Cotton Naturals (I) Pvt. Ltd. (Supra) and the coordinate benches in assessee's own cases, we hold that the interest charged at LIBOR + 225 bps / LIBOR + 250 bps on foreign currency loan and on delayed receivables respectively are at arm's length. 117. Accordingly, the entire transfer pricing adjustment of Rs.9,41,098/- made under section 92CA(3) is directed to be deleted and grounds no. 8 to 11 are allowed. 118. With regard to ground nos.12 to 17 and 25 regarding disallowance u/s 14A and computation of book profits u....
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....e has been certified by the statutory auditors of the assessee, hence such expenditure should be accepted as such. 123. The Ld. AR further submitted that, on a plain reading of the provisions of Section 35(2AB) of the Income-tax Act, 1961, and Rule 6(7 A) of the Income-tax Rules, 1962, it is evident that the requirement of obtaining quantification of eligible expenditure from the Department of Scientific and Industrial Research (DSIR) was introduced only with effect from 1st July 2016 by virtue of the Income-tax (Tenth Amendment) Rules, 2016. 124. Prior to this amendment, the Rules merely required the assessee to obtain approval for the in-house R&D facility from the prescribed authority, i.e., DSIR. There was no requirement for year-on-year approval or quantification of expenditure by the DSIR. The amendment to Rule 6(7 A)(b) and the introduction of Part B of Form 3eL (relating to quantification of eligible expenditure) were prospective in nature and became applicable only from Assessment Year 2017-18 onwards. 125. Accordingly, for the relevant assessment year 2013-14, the assessee's claim for deduction under section 35(2AB) cannot be denied on the ground that quantif....
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.... DSIR to furnish its report quantifying the expenditure eligible for deduction under section 35(2AB). This amendment being prospective in nature, cannot be applied to earlier years. 130. The Hon'ble Gujarat High Court in CIT v. Sun Pharmaceutical Industries Ltd. (supra) held that once the R&D facility has been approved by DSIR, deduction under section 35(2AB) cannot be denied merely because Form 3CL was not issued or part of the expenditure was not approved. The Hon'ble Supreme Court dismissed Revenue's SLP against this decision (SLP (C) Diary No. 18273/2018 dated 28.07.2018). 131. The coordinate benches in Crompton Greaves Ltd. (Mumbai-ITA T), Cummins India Ltd. (Pune-ITAT), Natural Remedies Pvt. Ltd. (Bangalore-ITA T), and Carborundum Universal Ltd. (Chennai- ITA T) have uniformly held that the DSIR's role, prior to 01.07.2016, was confined to the approval of facilities, and not the expenditure. The ratio decided of these cases fully covers the facts of the present case. The relevant. extracts of ITAT findings in ACIT v. Crompton Greaves Ltd. [(2019) 111 taxmann.com 338 (Mum-Trib.)] are reproduced hereunder; "Para 7:- It was the action of the DSIR i....
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....search and development facility in Part A of Form No. 3CL; (U) quantifying the expenditure incurred on in house research and development facility by the company during the previous year and eligible for weighted deduction under sub section (2AB) of section 35 in Part B of Form No. 3CL." "Para 13:-Hitherto, the provision was as follows: 'The prescribed authority shall submit its report in relation to the approval of in-house facility and development facility in Form No. 3CL to the Director General (Income Tax Exemptions) within sixty days of its granting approval. ' The above also makes it amply clear that prior to the amendment, i.e., .up to 30-6-2016, it was not required to quantify the expenditure and it was only with effect from 1-7-2016, that this mandate has been put in place. " "Para 14:- The year under consideration is assessment year 2009-10 and, for this year, the amendment was not applicable. Therefore, the assessee is right in contending that the non-approval of the expenditure claimed by DSIR did not entitle the Assessing Officer to make the disallowance and the Commissioner (Appeals) to confirm the same. This does also take care of a without p....
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.... 134. With regard to Ground No.26 relating to disallowance of Rs. 17,59,950/- on account of provisions for doubtful debts/advances and claimed as reduction of Rs. 47,33,356/- & Rs. 19,16,171/- on account of withdrawal from revelation reserves & provision of doubtful debts/advances written back respectively while calculating the book profit u/s 115JBof the Act. 135. Considered the rival contentions and material available on record. This issue has already been decided by us in favour of assessee in assessee's appeal for AY 2011-12 in ITA No.80/Del.2016. Thus, by following the observations made therein, we hold the issues relating to computation of books profits back to the file of AO to decide the same in accordance with law after granting a reasonable opportunity of being heard to the assessee. The assessee shall be free to file such documents, explanations, submissions as it deems fit in respect of this claim. 136. Apropos Ground No.28(a) relates with additional claim w.r.t. profit based deduction u/s 80IA of the Act amounting to Rs. 17,66,44,282/- in respect to its Wind Power Plant (WPP) before the AO which was inadvertently left to be claimed while tiling the ITR. ....
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....a S. Banerji v. ITO [2007] 14 SOT 569 (Mum.-Trib.) * Anchor Pressings (P.) Ltd. v. CIT [1986] 27 Taxman 295 (SC) * International Tractors Ltd. v. DCIT [2021] 127 taxmann.com 822 (Del.) * Oracle (OFSS) BPO Services Ltd. [TS-27-HC-2019 (Del.)] * E-Funds International India Pvt. Ltd. [TS-587-HC-2015 (Del.)] * CIT v. Sam Global Securities Ltd. (2014) 360 ITR 682 (Del.) * Shree Bhavani Power Projects (P.) Ltd. v. ITO [2024] 165 taxmann.com 733 (Del.) It was contended that since the assessee furnished all requisite documents, the claim was bona fide and the AO ought to have examined the same in accordance with law. 142. On the other hand, ld. DR of the Revenue relied on the findings of the lower authorities. 143. Considered the rival submissions and material placed on record. The issue in the present ground is with respect to the additional claim of deduction made u/s 80IA of the Act. It is an undisputed fact that assessee did not claim the deduction in the return of income but was claimed during the course of assessment proceedings before the AO but the same was denied by the AO as it was not claimed in the return of income.....
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....course of assessment proceedings but was not allowed came from consideration before the Coordinate Bench of Tribunal in assessee's own case for A.Y 2010-11 in ITA No.3561Del12015 and the Co-ordinate Bench of Tribunal vide order dated 24.02.2020 vide para 40 of the order has inter alia observed that the Revenue authorities cannot simply turn down the genuine and bonafide claims of the assessee on some technicalities and that instead of rejecting the additional claims of the assessee outrightly, authorities should endeavor to examine the bonafide claims of the assessee on its merit which would also avoid further litigation at higher forums. He therefore submitted that the issue may be set aside for examination by the AO and allow it on merits. He submitted that identical issue arose in assessee's own case in A.Y. 2006-07, 2007-08, 2008- 09, 2010-11 & 2012-13 and in all those years Hon'ble ITAT admitted the additional claim made by the assessee and remitted back the issues to the file of AO. To support his aforesaid contention, he pointed to the copy of the aforesaid orders which are placed in the paper book. Before us, Learned AR also placed reliance on the decision rende....
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....s he deems fit to adjudicate the claim of the assessee. Needless to state that AO shall grant adequate opportunity of hearing to the assessee and the assessee shall also be at liberty of file such documents, explanations and submissions as deemed fit in respect of its claim. Thus the ground of assessee is allowed for statistical purposes". The Ld. AR submitted that while assessing the total income of the assessee, the AO is statutory bound under the law to verify the claim of the assessee with documentary evidence and after due verification of the same. Also, even if some deduction or allowance has been inadvertently reported incorrectly, the AO should have granted the correct deduction after due verification. For this purpose, the reliance is placed on the judgment of IT AT Chandigarh in case of MIT Mohan Singh Kahlon [2013] 39 taxmann.com 145 (Chandigarh- Trib.). The relevant extract of the above case law is below:- "Para 9:- In facts, under section 143(3) of the Act, the AO while making the assessment of total income or of total loss, in case of any assessee, on the basis of such assessment is bound to consider the following points: (iii) Any evidence produced ....
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.... on the reason that it claimed under wrong section, in our considered view action of the Assessing Officer was not justified. The Assessing Officer should have asked to rectify the mistake by filing correct Form 10CCAF. Similar issue came before the Tribunal in the case of Dy. CIT v. Lab India (P.) Ltd. [2005] 94 TTJ 1131 (Pune). The Tribunal has held that the assessee is eligible for deduction. In its order, the Tribunal has taken into consideration the judgment of the Supreme Court in the case of Anchor Pressing (P.) Ltd. v. CIT [1986J 161ITR 1592 wherein it has been held that "if on the basis of material placed on record, the assessee is entitled to claim any deduction but forgets to make his claim in the return or in the course of assessment proceedings, then the assessee is entitled to make such claim by moving application under section 154 for rectification since non-granting of deduction/exemption would amount to mistake apart from record. The ratio of this judgment is based on the principle that the Assessing Officer is duty bound to grant the "exemption/deduction even where assessee failed to claim the same. " 146. Further we rely on the decision of Anchor Pressings (P.....
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....claimed in the original return, provided the necessary evidence is on record. 151. In the present case, the assessee has furnished Form 10CCB, audited financials, and all supporting documentation before the AO. Therefore, in the interest of justice and fair play, the issue requires verification of the factual details and adjudication on merits. 152. In view of the aforesaid facts, we are of the view that the claim of the assessee of the deduction u/s 80IA of the Act merits consideration and adjudication by the AO. We therefore set aside the issue back to the file of AO to consider the same on merits after considering the submissions made by assessee and in accordance with law. The AO shall be free to call for such information and explanations as he deems fit to adjudicate the claim of the assessee. Needless to state that AO shall grant adequate opportunity of hearing to the assessee and the assessee shall also be at liberty of file such documents, explanations and submissions as deemed fit in respect of its claim. Thus, the ground no.28(a) of assessee is allowed for statistical purposes. 153. With regard to ground no.28(b) relates to remaining 10% additional depreciation a....