TaxTMI 
TaxTMI 
2026 (1) TMI 546
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....2016-17/CIT(A)-29 dated 29.06.2017 M/s Dalmia Cement Bharat Ltd. 2 CO.63/Chny/2018 2013-14 M/s Dalmia Cement Bharat Ltd. Appeal No.496/2016-17/CIT(A)-29 dated 29.06.2017 The Assistant Commissioner of Income Tax, Circle-1, Tamilnadu 3 ITA No.3158/Chny/2017 2014-15 The Assistant Commissioner of Income Tax, Circle-1, Tamilnadu Appeal No.497/2016-17/CIT(A)-29 dated 29.06.2017 M/s Dalmia Cement Bharat Ltd. 4 CO.64/Chny/2018 2014-15 M/s Dalmia Cement Bharat Ltd. Appeal No.497/2016-17/CIT(A)-29 dated 29.06.2017 The Assistant Commissioner of Income Tax, Circle-1, Tamilnadu 5 ITA No.5416/Chny/2017 2013-14 M/s Dalmia Cement Bharat Ltd. Appeal No.496/2016-17/CIT(A)-29 dated 29.06.2017 The Assistant Commissioner of Income Tax, Circle-1, Tamilnadu 6. ITA No.5417/Chny/2017 2014-15 M/s Dalmia Cement Bharat Ltd. Appeal No.497/2016-17/CIT(A)-29 dated 29.06.2017 The Assistant Commissioner of Income Tax, Circle-1, Tamilnadu 2. At the outset, it has been noted that the Registry has identified a delay of 49 days in the appeals of the Revenue filed vide ITA No.3157/Chny/2017 and ITA No.3158/Chny/2017. The rea....
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....ate disallowance of interest u/s 14A read with Rule 8D(2)(ii) amounting to Rs. 5,99,00,000/- without appreciating the fact that the appellant had sufficient own funds out of which investments had been made and therefore, disallowance u/s 14A read with Rule 8D(2)(ii) is unwarranted. 3.0 That on the facts and in the circumstances of the case, and without prejudice to Ground No. 1.0 & 2.0 taken here-in-above, Ld. CIT (Appeals) was not justified and erred in law in not directing to exclude investment in subsidiary/ group companies and investments which did not yield exempt income in computing disallowance as per Rule 8D(2)(ii) when similar direction was given to exclude above investments in computing disallowance as per Rule 8D(2)(ii) 4.0. That on the facts and in the circumstances of the case, Ld. CIT(Appeals) was not justified and erred in law in upholding the disallowance of leave encashment claimed on provision basis amounting to Rs. 3,1249,072/ 5.0. That on the facts and in the circumstances of the case, Ld. CIT(Appeals) was not justified and erred in law in upholding the disallowance of Education Cess debited to Profit & loss account amounting to Rs. 2,....
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....sion of Mumbai ITAT in the case of ACIT Vs.Uma Polymers Ltd. in ITA No.5366/Mum/2012 and CO No.234/Mum/2013,dt.30/9/2015. In view of the difference rulings and question of law involved, the appeal is filed. 2) In respect of addition of Addl.Depreciation u/s. 32(1)(ii) of the I.T.Act on assets installed and put to use in earlier years: DELETED -By CIT (A). The learned CIT(A) erred by relying on the decision of Hon'ble High Court of Calcutta referred by the assessee in the case of DCIT Vs.Gloster Jute Mills Ltd.(ITA No.95/Kol/2011) where in it is held that the condition of allowing additional depreciation only in the initial assessment year ceased to exist as and from 01/4/2006. The Department relies on the decision of the Hon'ble High Court of Karnataka In the case of CIT(LTU) Vs. M/s.Rittal India Pvt.Ltd(ITA No.268/2014) viewed that the TRIBUNAL HAS RIGHTLY HELD that additional depreciation allowed under Section 32(1)(aii) of the Act is ONE TIME BENEIFT. The decision supports the contention/stand of the department that additional depreciation cannot be claimed till the exhaustion of the new property. In view of the difference rulings and ....
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....jective is general in nature to attain the goal of industrial growth of the State. The terms and conditions offered by the Govt. in the Scheme will decide it whether a subsidy is capital or revenue. 4.2) Further the incentives are production incentives in the sense that the company would be entitled to these incentives only AFTER IT STARTED PRODUCTION. THESE SUBSIDIES WERE NOT TO MAKE ANY PAYMENT DIRECTLY FOR SETTING UP OF THE INDUSTRIES. 4.3) The subsidies received by the assessee are within the purview of the principles laid down to treat the subsidy as revenue receipts by the HON'BLE APEX COURT IN THE CASE OF SAHNEY STEEL AND PRESS WORKS LTD. AND OTHERS VS.CIT(228 ITR 253). As observed by the Apex Court the assessee was free to use the money in its business entirely as it liked and WAS NOT OBLIGED TO SPEND THE MONEY FOR A PARTICULAR PURPOSE like expansion of the unit/purchase of machinery/purchase of capital goods/purchase of raw materials /repayment of loans like in the case of Ponni Sugars & Chemicals Ltd. In view of the different rulings and question of law involved appeal is filed. 5) Carry forward and adjustment of Long Term Capital Loss of am....
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....s 2013-14 & 2014-15 respectively. Thus, the appellant assessee is contesting relief not granted to it and revenue is contesting part relief granted to the assessee. For the purpose of this order, we will consider the figures for AY 2013-14. As the facts for AY 2014-15 have been reported to be identical, the decision taken for AY 2013-14 shall apply mutatis mutandis in AY 2014-15 as well. 8. We will first consider the grounds of appeal 01 to 03 raised by assessee vide ITA No.5416/Del/2017. As per brief factual matrix of the case concerning AY 2013-14, during the year, the assessee had shown to have earned exempt dividend income u/s 10(34)/10(35) amounting to Rs. 19.11 Crs. In the Return of Income, the assessee had suo-moto offered a sum of Rs. 0.50 Crs. towards disallowance u/s 14A. Before the AO,, the assessee had also contended that since it had sufficient own funds out of which investments have been made, therefore the question of further disallowance u/s 14A do not arise. The Ld. AO invoking provisions of Rule 8D made an additional disallowance of Rs. 12.86 Crs. [Rule 8D(2)(ii) for interest - Rs. 5.99 Crs. & Rule 8D(2)(iii) for expenses - Rs. 7.37 Crs.). The Ld. CIT(A) gave p....
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.... the appellant, we have noted that the argument of availability of surplus own funds is made out in favour of the assessee. We have also noted that judicial precedents relied upon also support the view that no disallowance under section 14A read with Rule-8D(ii) is permissible in cases where the assessee had surplus own funds. Accordingly, we are of the considered view that no disallowance under section14A read with Rule-8D(ii) was required to be made. We therefore set-aside the order of the ld. CIT(A) and direct the ld. AO to delete the addition of Rs. 5.99 Crores. The grounds of appeal nos. 01 to 03 raised by the appellant assessee in ITA No.5416/Del/2017 are therefore allowed. 12. Since, the facts of the case in AY 2013-14 are identical to those in AY 2014-15, decision therein shall apply mutatis mutandis. Accordingly, the grounds of appeal number 01 to 03 contested by the assessee through in ITA No.5417/Del/2017 are also allowed. 13. We now will consider the ground of appeal no.1 raised by the appellant revenue in its appeal at 3157/Chny/2017. The ld. AO had noted that during the year under consideration, the assessee had earned exempt dividend income of Rs. 19.11 Crs. In....
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..... Accordingly, the grounds of appeal number 01 contested by the Revenue through in ITA No.3157/Del/2017 is also dismissed. Disallowance of leave encashment on provision basis 18. The appellant assessee has through grounds of appeal no.04 in ITA No.5416 and 5417/Del/2017 for AYs 2013-14 and 2014-15 contested the confirmation of disallowance made by the ld. AO. As stated hereinabove, the said ground was not pressed and hence stands dismissed. It has however been noted that the appellant Revenue through its ground of appeal no.5 in ITA No.3158/Chny/2017 for AY 2014-15, contesting that the decision of ld. CIT(A) shows that impugned liability is an unascertained liability and therefore it attracts provisions of Explanation-1(f) of Section 115JB. Unascertained liabilities fall within the preview of Explanation-1(f) of Section 115JB and therefore liable for inclusion qua calculation of book profits. Accordingly, in view of withdrawal of its contest by the assessee on the core issue of leave encashment, as well as statutory prescription of section 115JB, the ground of appeal no.5 raised by the Revenue is allowed. Exclusion of Subsidy being Capital receipt 19. The appellant asse....
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....propos to Para 12.0 to 12.8 of the order the subsidy was not allowed by the ld. AO, as exclusion under MAT provisions on the contention that Explanation 1 to Sec. 115JB of the Act does not permit such specific deduction while computing Book Profit. In appeal, the Ld. CIT(A) granted partial relief by holding subsidy as capital receipts under normal provisions. However, regarding the claim of exclusion of Subsidy under MAT provisions, Ld. CIT(A) upheld the order of the A.O. while relying upon decision of Supreme Court in Apollo Tyres Ltd. -vs.- CIT (2002) 122 Taxman 562 (SC). 21. It is the case of the appellant assessee that the decision of ld. CIT(A) in confirming the action of the ld. AO qua inclusion of capital subsidy while computing books profit under section 115JB of the Act is incorrect. It has been contended that the capital receipt do not bear character of income and hence the same is not includible in book profit under section 115JB. The ld. Counsel placed reliance upon the decision of Hon'ble Kolkata High Court in the case of Ankit Metal and Power Ltd. 109 taxmann.com 93 which after considering the decision of Apollo Tyers Ltd. (supra) concluded that as interest and pow....
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....inancials, etc., in support of its arguments. 28. We have heard the rival submission in the light of material placed on record. We have noted that the ld. CIT(A) has concurred with the submissions of the assessee that the impugned amounts of subsidy were given not for encouragement of business but for the overall development and growth of State of Andhra Pradesh. We have noted that Hon'ble Apex Court in the case of Ponny Sugars & Chemical Ltd. held that nature of any subsidy is to be determined with respect to the purpose for which is granted. Time of disbursal and source/mode of subsidy is immaterial. We have noted that ld. CIT(A) has rightly distinguished the decision of Meghalaya Steels Ltd. (383 ITR 217) of Hon'ble Apex Court concluding that in the impugned case, the issue was as to whether subsidy is admissible for deduction under section 80IB/80IC or not. The issue of capital receipt vs revenue receipts was not agitated there. The ld. CIT(A) after examining various documents placed by the assessee held that the prime object of the impugned subsidies was to create employment, accelerate industrial growth, boost industrial investment in Andhra Pradesh for its wide spread eco....
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....ant assessee duly satisfied all the conditions as mentioned in Sec 32(1)(iia). It was further argued that vide first proviso to Sec 32(1)(iia), the Act itself defines the limitations and specifies the conditions in which such claim of additional depreciation shall not be available. If the asset does not fall under the restrictive provisions of Sec. 32(1)(iia), the assets are eligible for claim of additional depreciation in subsequent years. It was argued that if the intention of the legislature was to allow the benefit only in the initial year then the provision of the Act would have expressly prescribed and that in absence of such specific provision, it can be said that the legislature has intended to provide the relief in subsequent years also. The ld. Counsel placed reliance upon a catena of decisions of Mumbai and Kolkata Tribunal holding that the provisions of Sec. 32(1)(iia) as amended by Finance Act, 2005 w.e.f. 01.04.2006 do not explicitly postulates allowance of depreciation in the first year only. It was accordingly requested that the order of the Ld. CIT(A) may be confirmed. 33. We have heard rival submissions in the light of materials placed on record. We have noted ....
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....Hon'ble Apex Court in Vijaya Bank -vs.- CIT (2010) 323 ITR 166 (SC) wherein it has been held that the amount of provision for bad & doubtful debts is reduced from loans and advances or debtors from the asset side of the balance sheet. Such treatment amounts to actual write-off A provision for doubtful debt such presented in accounts would be regarded as an allowable expenditure u/s 36(1)(vii). Further reliance was placed upon the decision of a Co-ordinate Bench of this Tribunal in the case of Religare Finvest Ltd. -vs.- DCIT [I.T.A. No. 4796/Del/2017 dated 13.07.2023] and of the Ahmedabad Tribunal in the case of Vidres India Ceramics Pvt. Ltd. -vs.- DCIT [I.T.A No. 2521/Ahd/2017 dated 17.05.2019. On the issue of treatment under section 115JB reliance was placed upon the decision of Hon'ble Karnataka High Court in CIT -vs.- Yokogawa India Ltd. (2012) 204 Taxman 305 (Kar.). which was stated to have been upheld in ACIT -vs.- Delhi State Industrial and Infrastructure Development Corporation Ltd. [ITA No.7265/Del/2019 dated 26.09.2023 of this Tribunal. It was accordingly requested that the decision of the ld. CIT(A) may be confirmed. 38. We have heard rival submissions in the light o....
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....n for doubtful debt' to the P&L Account and makes a corresponding credit to the 'current liabilities and provisions' on the Liabilities side of the balance sheet, then it would constitute a provision for doubtful debt. In the latter case, assessee would not be entitled to deduction after April 1, 1989." Hon'ble Apex Court observed that if the assessee had not only debited the P&L account but also correspondingly reduced the amount from Debtors A/c on the assets side of the Balance Sheet and, consequently, at the end of the year, the figure shown on the assets side was net of the alleged provision, amounted to actual write off for the purpose of availing benefit of deduction under the section. 13. Having considered the material placed on record, Ld. CIT(A) reached a conclusion on facts that the assessee had already disallowed in the computation of income the provision for NPA of Rs. 26,06,230/- and general provision of loans to the tune of Rs. 9,07,19,756/-created by it for the financial year 2009-10 which was reported separately in schedule R of the profit and loss account for the said year. Ld. CIT(A) further found that the learned Assessing Officer did not make ....
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....ion of ld. CIT(A) in para -20.4 of his order, following decision of Hon'ble Apex Court in the case of Vijaya Bank as well of this Tribunal in the case of Flex Foods, holding that the provisions for doubtful debts is an allowable deduction under section 115JB is also correct. Accordingly, on the issue of treatment of the provisions for doubtful debts under section 115JB also the arguments of the Revenue are non-maintainable. We therefore confirm the order of the ld. CIT(A) and dismiss the ground of appeal no.3 raised by the Revenue. 41. Since, the facts of the case in AY 2013-14 are identical to those in AY 2014-15, decision therein shall apply mutatis mutandis. Accordingly, the grounds of appeal number 03 contested by the Revenue through in ITA No.3158/Chny/2017 is also dismissed. 42. The next issue raised by the Revenue vide ground of appeal no.5 in ITA No.3157/Chny/2017 is regarding the carry forward and adjustment of Long Term Capital Loss of amalgamating company amounting to Rs. 2,05,96,629/-. Brief facts of the case are that during the year, Dalmia Cement Ventures Limited (DCVL), 100% subsidiary company of the assessee company, got amalgamated with the assessee company w....