TaxTMI 
TaxTMI 
2026 (3) TMI 1391
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.... the income of the assessee company made by the Transfer Pricing Officer on account of export of pharmaceutical products to Glenmark Nigeria and to Glenmark Czech? 2. Whether on the facts and in the circumstances of the case, the CIT(A) was justified in deleting the adjustment of deleting the addition of Rs. 3,29,72,122/- to the income of the assessee company made by the Transfer Pricing Officer by disregarding the benchmarking analysis carried out by the TPO as per stipulated provisions of the Income-tax Act and Rules? (Tax Effect (1 & 2): Rs. 1,10,22,255/-) 3. "Whether, on the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition made under Section 41(1) of the Act without appreciating that the liabilities were time-barred, unconfirmed, and without any evidence of enforceability or Continued existence 4. "Whether. on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is right in allowing the appeal of the assessee and thereby deleting the addition made on account of sundry credit balances written back, ignoring the decision of the Hon'ble Supreme Court in the case of CIT vs TVS....
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.... case of Zandu Pharmaceuticals Works Ltd. (350 ITR 366) where each unit of assessee had a separate R&D unit" (Tax Effect (8 & 9): Rs. 5,21,17,153/-) 10. "Whether, on the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred in rejecting the allocation of interest expenses to units eligible u/s. 80IC/80IE/ 10AA of the Act in the ration of turnover of such units, and thereby deleting the addition of Rs. 5,63,06,678/- ignoring the fact that assessee could not establish direct nexus of interest expense and in absence of direct nexus, all indirect expenses should be allocated to all units and in the absence of any other specific criteria, turnover is most rational and logical method of allocation. (Tax Effect (10): Rs. 1,91,38,639) 11 "Whether, on the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance of Rs. 31,90,72,944/- made under Section 37(1) of the Income-tax Act, 1961, on account of gifts and promotional expenses, without appreciating that such expenses were hit by the Explanation to Section 37(1), being in violation of ne Medical Council of India (Professional Conduct E....
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.... of the assessee not having made the claim in the return of income and in absence of a revised return, the CIT(A) was justified in allowing such claim by way of additional ground without verifying its correctness?" 19. "Whether, on the facts and in the Circumstances of the case, the CIT(A) erred in treating the excise duty exemption received by the assessee as capital receipts and hence not includable fin book profit of assessee ignoring their direct nexus with the bus operations, profitability and recurring nature?" 20. "Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that export incentives received under the FPS, FMS, and SHIS schemes are capital receipts not liable to tax under the normal provisions of the Act and also liable for exclusion while computing book profit under section 115JB of the Income Tax Act, 1961 contrary to the binding precedent of the Hon'ble Supreme Court in Liberty India v. CIT (317 ITR 218)" (Tax Effect (20): Rs. 59,72,866) ITA No. 3991/Mum/2025 1. Whether on the facts and in the circumstances of the case. the CIT(A) was justified in deleting the adjustment of....
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.... is competent to take decision with regards to the correctness Of expenses u/s 35(2AB) of the Act r.w.r. 6(7A) of the Rules." 5 & 6: Tax Effect: Rs. 35,70,31,430/- 7. Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred in holding that no apportionment of Research and Development expenses is warranted to units eligible u/s.80IC/80IE/ 10AA of the Act?" 8. "Whether in the facts & circumstances of the case and in law, the ld. CIT(A) has erred in ignoring the fact that in the assessee's case the exempt units of the assessee company don't have its own independent R&D unit and the entire R&D related work is instead undertaken centrally from their R&D units situated independently and hence the facts are different than the decision of the Hon'ble jurisdictional High Court in the case of Zandu Pharmaceuticals Works Ltd (350 ITR 366) where each unit of assessee had a separate R&D unit" 7 & 8: Tax Effect: Rs. 11,93,24,554/- 9 "Whether, on the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred in rejecting the allocation of interest expenses to units eligible u/s. 80IC/80IE/ 10AA of ....
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....additional ground without verifying its correctness?" 16. "Whether, on the facts and in the circumstances of the case, the CIT(A) erred in treating the excise duty exemption received by the assessee as capital receipts and hence not includable in book profit of assessee ignoring their direct nexus with the business operations, profitability and recurring nature?" 13 to 16: Tax Effect: Rs. 1,79,287/- 17. "Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that export incentives received under the FPS and MEIS schemes are capital receipts not liable to tax under the normal provisions of the Act and also liable for exclusion while computing book profit under section 115JB of the Income Tax Act, 1961, contrary to the binding precedent of the Hon'ble Supreme Court in Liberty India v. CIT (317 ITR 218)" 17: Tax Effect: Rs. 1,79,287/. 2.1. Both the appeals were heard on two different dates but before the same constituting bench. Since identical grounds are raised in both the appeals and the difference is only on account of variation in the quantum, we find it proper to take up both the appeals togethe....
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....eutical Products to Glenmark Czech 2,02,07,209 C Adjustment on account of corporate guarantee to GHSA 28,54,64,332 D Adjustment on account of corporate guarantee to CGFSA 9,02,97,175 E Adjustment on account of comfort guarantee 5,08,02,117 45,95,35,764 2. Outstanding Creditors u/s. 41(1) 5,46,029 3. Disallowance of weighted deduction u/s. 35(2AB) 48,69,29,980 4. Allocation of R & D expenses to units eligible u/s.10AA/80IC/80IE of the Act 15,33,30,842 5. Allocation of interest expenses to units eligible u/s. 10AA/80IC/80IE of the Act 5,63,06,678 6. Disallowance u/s. 37(1) on account of IMC Regulations. 31,90,72,944 7. Disallowance u/s. 14A (Normal provisions as well as MAT u/s. 115JB) 4,83,46,713 8. Disallowance of investment allowance u/s. 32AC of the Act. 11,66,05,610 3.2. Assessee went in appeal before the ld. CIT(A) wherein it reiterated its detailed submissions and explanations along with corroborative documentary evidences. After considering the same, ld. CIT(A) gave relief to the assessee by allowing its appeal, against which Revenue is in appeal be....
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....the export transaction, AEs possess the least complex functional analysis and hence, chosen AE as the tested party. For its above stand, assessee relied on the decision of Ranbaxy Laboratories Ltd. vs. Addl. CIT [2016] 68 taxmann.com 322 (Del Trib). Further, assessee submitted this issue is already held in its favour by the order of the Coordinate Bench of ITAT, Mumbai in its own case for A.Y. 2014-15 (Combined Order in ITA No.1455/Mum/2020 & C.O. No.31/Mum/2020, ITA No. 575/Mum/2020 dated 01.02.2024), wherein the Coordinate Bench on the issue held as under:- "8.9 We have noticed that the above said methodology adopted by the assessee has been accepted by the TPO in the earlier years. Further, the table above would show that the profitability of the assessee in exporting products to these two AEs is increasing year after year. Under these set of facts and in the facts and circumstances of the case, we are of the view that there is no reason to ignore transfer pricing study conducted by the assessee should be accepted. Accordingly, we set aside the order passed by Ld CIT(A) and direct the AO to delete the transfer pricing adjustment made in respect of exports made to M/s Gl....
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....the creditors account in the books of the assessee. According to him, no prudent businessman would keep recovery pending for three years, unless the same is not recoverable. With this view, he held that the liabilities have ceased to exist and made the addition u/s.41(1). The details of outstanding creditors as reported in the balance sheet for the year is tabulated below: Current Status of creditors outstanding as per the balance sheet as on 31.03.2015 Sr. No. Action taken AY Amount (Rs. ) 1. Paid off to the creditor 2015-16 17,924 2. Written Back to the P/L account and offered to tax 2015-16 8,824 2016-17 1,26,582 2020-21 3,87,837 2023-24 4,863 Total 5,46,029 5.1. Assessee submitted that these have been paid off or written back to the profit and loss account and offered to tax as tabulated above and therefore no addition is warranted. This issue had come up before the Coordinate Bench in assessee's own case for several past Assessment Years. Ld. CIT(A) has taken note of the judicial pronouncements of the preceding years in assessee's own case and h....
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....sessee in the assessee's own case in AY 2013-14. We also notice that the Rule 6(7A), which requires approval of expenses also by DSIR has been brought into the statute w.e.f. 1.7.2016 and hence the same will not apply to AY 2014-15 ..... " 6.2. Ld. CIT(A) has considered the submissions made by the assessee as well as amendment made to Rule 6(7A) which has come on the statute w.e.f. 01.07.2016, hence applicable from A.Y. 2017-18. He has also taken note of the decision of Coordinate Bench in assessee's own case (supra) and thus, allowed the claim of weighted deduction of the assessee. Having gone through the factual position and judicial pronouncement as noted above, we do not find any reason to interfere with the findings arrived at by ld. CIT(A). 6.3. We also take note of the decision of the Coordinate Bench in another case of Marksans Pharma Ltd. vs. DCIT [2023] 155 taxmann.com 59 (Mum) which also dealt with similar issue holding that prior to amendment in Rule 6(7A)(b) w.e.f. 01.07.2016, once facility is approved by DSIR, assessee is entitled to weighted deduction u/s. 35(2AB) and there is no requirement that expenses also need to be approved by DSIR in Form No.3CL.....
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....tion u/s 10AA of the Act are i) Pithampur and ii) Dahej. In the return of income, assessee claimed deduction of Rs. 441,33,31,448/- u/s 80IC/80IE in respect of the abovementioned eligible units. No deduction was claimed in respect of units eligible for deduction u/s 10AA since both the 10AA units had suffered loss during the year. Details of unit-wise deduction claimed are as under - S. No. Particulars Deduction u/s. Deduction claimed (in INR) 1. Baddi (Unit I) 80IC 85,59,64,468/- 2. Nalagarh (Unit II) 80IC 71,64,25,864/- 3. Sikkim Unit 80IE 284,09,41,116/- Total deduction claimed 441,33,31,448/- 8.1. In respect of the Baddi (unit III), assessee had not claimed any deduction as it had incurred loss during the year. During the course of assessment proceedings, ld. Assessing Officer observed that assessee had not allocated any R & D expenses to Baddi I, Solan, Baddi III and Sikkim units which are eligible for profit linked deduction u/s 80IC/80IE. He further noted that assessee has 12 manufacturing units, i.e., Baddi I, Solan, Baddi III, Sikkim Unit, Pithampur and Dahej (6 units are exempted) and 6 units, i.....
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....failure. Moreover, it is not certain that the final product will be manufactured at the Baddi unit-I, Baddi unit-II (Solan), Baddi Unit III, Sikkim Unit or Dahej only. Hence, these expenses do not require to be allocated to any of the manufacturing unit. 8.3. Ld. CIT(A) took note of the decision of the Coordinate Bench in assessee's own case for the Assessment Year 2014-15 (supra) wherein on similar issue, it held to remit the matter back to the file of ld. Assessing Officer for factual verification. Observations in this regard are as under: "14.2 We noticed that the Ld CIT(A) has followed the decision taken by the Tribunal in the assessee's own case in AY 2010-11 and accordingly remitted this issue to the file of AO. In our view, no prejudice is caused to the revenue by the decision of Ld CIT(A), since the matter required factual verification. Accordingly, we uphold the order passed by Ld CIT(A) on this issue." 8.4. We note that this legacy issue has been dealt by the Coordinate Bench in Assessment Year 2009-10 and 2010-11 also, wherein similar directions were given setting aside the matter to the file of ld. Assessing Officer for factual verification. On this p....
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....titioners and their professional associates in violation of the regulation issued by Medical Council of India (the Council) which is the regulatory body constituted under the Medical Council Act, 1956. Based on the above, ld. Assessing Officer called for the details of expenses incurred on account of freebies to doctors and medical professionals and why the same should not be disallowed. Assessee made a detailed submission along with a list of corporate gifts distributed by the assessee to its distributors, stockists, business associates and employees which contributed to its growth. 10.1. This issue had also come up before the Coordinate Bench in assessee's own case for Assessment Year 2014-15 (supra). It was noted by the Coordinate Bench that ld. Assessing Officer has computed the disallowance on the total turnover, whereas the issue is related to sales promotion expenses and disallowance to be made as per explanation to section 37(1). It was also noted that ld. CIT(A) had adopted a completely different approach which was not at all the case of the ld. Assessing Officer. There was no doubt on the actual expenses having been incurred by the assessee. The Coordinate Bench to....
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....D to compute disallowance at Rs 4,92,91,746/- and made net disallowance of Rs. 4,83,46,713/- i.e. after reducing the suo moto disallowance made in the original return of income. 11.2. Before ld. CIT(A), assessee took an additional ground contending that the disallowance u/s 14A should not exceed exempt income. In this regard, assessee placed its reliance on the decision rendered by Hon'ble Delhi High Court in the cases of Joint Investment Pvt Ltd 372 ITR 694 (Del) and the decision rendered by the Tribunal in the case of Future Corporate Resources Ltd in ITA No.4658/Mum/2015 dated 26.07.2017. 11.3. With regard to the addition made u/s 115JB of the Act, assessee placed reliance on the decision rendered by Hon'ble Special Bench in the case of ACIT vs. Vireet Investment Pvt Ltd in ITA 502/Del/2012. By placing reliance on the above said decision, ld. CIT(A) held that the disallowance computed u/s 14A should not be considered for computing book profit u/s 115JB of the Act. 11.4. Ld. CIT(A) after considering the decision of Coordinate Bench in assessee's own case for Assessment Year 2014-15 (supra) held in favour of the assessee, restricting the disallowance to the ex....
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....acquired before 01.04.2013, but installed during Financial Year 2013-14. In respect of eligible investments of Rs. 49,01,73,342, it was stated that deduction would be allowed for the same in subsequent year subject of fulfilment of conditions of section 32AC. 12.2. Details of eligible investment for the purpose of deduction u/s 32AC are as follows: Particulars Amount (in INR) Assets acquired and installed in FY 2013-14 by assessee (AY 2014-15) 28,71,97,191 Assets acquired and installed in FY 2013-14 by GGL (AY 2014-15) 49,01,73,342 Assets acquired and installed in FY 2014-15 (AY 2015-16) 98,40,31,465 Total eligible investment 176,14,02,198 12.3. In the light of above facts, assessee would be eligible for additional claim of deduction u/s 32AC of Rs. 11,66,05,610/- which is worked out as follows: Particulars Amount (in INR) Total eligible investment 176,14,02,198 Deduction @ 15% 26,42,10,330 Less: Deduction claimed in the return 14,76,04,720 Additional deduction u/s 32AC 11,66,05,610 12.4. On these set of facts, ld. CIT(A) observed that GGL got merged with the assessee w.e.f. 01.04.2014, claim of deduction u/s. 32A....
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....dia) Ltd. 284 ITR 323 (SC) wherein it was held that nothing impinges on the appellate authority to admit an additional claim. He also placed reliance on the Hon'ble Jurisdictional High Court of Bombay in the case of Pruthvi Brokers & Shareholders [2012] 349 ITR 336 (Bom). Thus, the additional claims made by the assessee were admitted for adjudication. 13.1. Ld. CIT DR objected on the admission of additional claims at the first appellate stage by placing reliance on the decision of Hon'ble Supreme Court in the case of Shriram Investments vs. CIT in Civil Appeal No. 6274 of 2013, dated 04.10.2024. On the strength of this decision, he contended that since assessee did not file its revised return for claiming these benefits, the relief granted by the ld. CIT(A) is not justified. He also referred to another decision in the case of Wipro Finance Ltd. [2022] 137 taxmann.com 230 (SC) which has been referred to by the Hon'ble Supreme Court in the case of Shriram Investments. 13.2. On this aspect, ld. Counsel for the assessee referred to the decision of the Coordinate Bench of ITAT Mumbai in the case of DCIT vs. Shelter Developers in ITA No. 3753/Mum/2023, dated 18.01.2025 ....
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....er the claim. 20. Coming to the another judgment relied upon by the Id. DR in the case of PCIT vs. Wipro Ltd., this judgment pertain to the issue whether revised return filed by the assessee can only substitute its original return u/s. 139(1) and cannot transform it into return u/s. 139(3). Here in this case assessee has claimed benefit u/s. 10B(8) by furnishing declaration in the revised return and after the due date prescribed u/s. 139(1) and the same was denied as a requirement of furnishing the declaration before the ld. AO within the due date of filing of return u/s. 139(1) was a mandatory condition and not directory. The Hon'ble Supreme Court held that the revised return filed by the assessee u/s. 139(5) can only substitute its original return filed u/s. 139(1) and cannot transform it into return u/s. 139(3) in order to give benefit of carry forward of set off of any loss u/s.80. Thus, this judgment is clearly not applicable in the facts of the case. 21. However, there is another judgment of the Hon'ble Supreme Court in the case of Wipro Ltd., vs. CIT reported in (2022) 140 txmann.com 223(SC), wherein, the Hon'ble Supreme Court held that the Trib....
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....upon the plenary powers of the ITAT bestowed under section 254 of the Act. In other words, this decision is of no avail to the department." 22. The aforesaid judgment of the Hon'ble Supreme Court clearly clinches the issue that the ITAT can entertain such a claim for the first time in terms of its claim u/s.254, accordingly, we admit the legal issue raised by the assessee in the cross objection and the objections raised by the ld. AR is rejected." 13.3. Accordingly, in the given set of facts and legal position as discussed above, admission of additional grounds along with additional documentary evidences for which a remand report was called for by the ld. CIT(A) is justified. Thus, on this aspect, the contentions of the Revenue are not tenable to dislodge the claim of the assessee at the very threshold, by an appellate authority. 14. There are two components to issue which we need to address, viz. first relating to excise duty exemption for setting up two units in Baddi, Himachal Pradesh and one unit in Sikkim and the second component is regarding promotional benefits under the foreign trade policy in the form of rewards as FPS, FMS and SHIS. We first take up the....
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.... excise duty exemption had been given with an objective to achieve industrialization in the specified areas of Baddi, Himachal Pradesh and North-Eastern States i.e., Sikkim and to generate employment opportunities. Assessee referred to the decision of Coordinate Bench of ITAT, Amritsar in the case of ACIT vs. Gravita Metal Inc. in ITA No. 594 and 587/Asr/2019, dated 15.06.2023, wherein similar issue had come up. The factual position recorded in this order are in para-2 and 2.1, which are extracted below for ready reference: "2. Briefly, the facts as per record are that the assessee firm is engaged in the business of manufacturing and recycling of used lead acid battery for supply of pure/refined/unrefined lead ingots, lead alloys to cable and battery manufacturers of India. For the year under consideration, it has filed the return on 12.10.2016 at Nil income. The assessee firm set up its manufacturing unit in Kathua, Jammu & Kashmir on 28.06.2005 to avail the benefit of New Industrial Policy launched for the state of Jammu & Kashmir launch. The Ministry of Commerce & Industry vide Office Memorandum dt. 14.06.2002 (PB 30-32) has provided New Industrial Policy for the state ....
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.... clause, it held that scope of this section cannot be enlarged to include exemption by interpreting it as 'subsidy'. In this case, assessee is granted payment of excise duty to the extent of 36% of the total excise duty collected. It thus, allowed the claim of assessee treating it as capital receipt. 14.4. Revenue took up the matter before the Hon'ble High Court of Jammu & Kashmir & Ladakh in case of PCIT vs. Gravita Metal Inc. [2024] 168 taxmann.com 379 (J&K and Lad). Hon'ble Court after deliberating on the amendment brought to clause (xviii) to section 2(24) affirmed the view taken by the Coordinate Bench, treating it as a capital receipt, not taxable under the provisions of the Act. Relevant para-12 is extracted below for ready reference: "12. In the present case, the assessee is exempted from making payment of excise duty to the extent of 36% of the total excise duty collected, meaning thereby the same is not subsidy given to meet the cost of the project. Therefore, we are also in full agreement with the learned Tribunal that exemption from excise duty does not fall in the definition of income as envisaged under Section 2(24)(xvi) of the Act and that....
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....sideration, assessee has received Focus Product Scheme (FPS), Focus Market Scheme (FMS) and Status Holder Incentive Scrip (SHIS) in the form of export incentives under the Foreign Trade Policy, 2009-2014 amounting to Rs. 43,15,763/- Rs. 1,22,51,003/- and Rs. 10,05,658/-, respectively. Copy of working sheet are collectively placed in the paper book. The incentive was granted as the assessee made export to various potential new markets and not for all the markets. The incentive was given for exploring the new market for a long term prospective. Assessee now contends to claim the said incentives as capital in nature. 16.2. Before embarking to adjudicate on this aspect further, it is relevant to note the objective of the scheme which is produced as follows for ready reference: "with a view to continuously increasing our percentage share of global trade and expanding employment opportunities, certain special focus initiatives have been identified/continued for Market Diversification, Technological Upgradation, Support to status holders, Agriculture, Handlooms, Handicraft, Gems & Jewellery, Leather, Marine. Electronics and IT Hardware manufacturing Industries, Green products,....
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....record. Insofar as the power of ld. first appellate authority to admit assessee's claim, which was not accepted by the A. O. at the first stage, we must observe that there is no restriction on the appellate authorities to entertain a fresh claim if facts relating to such claim are available on record. In the facts of the present appeal, undoubtedly, in course of assessment proceedings itself the assessee has made the claim that SHIS and fertilizer subsidies are taxable as they are capital in nature. All facts relevant to the aforesaid claim were available before the A.O. That being the case, in our considered opinion, Id. first appellate authority was wholly within his power to entertain the claim. Insofar as the merits of the issue is concerned, in our view, it squarely stands settled in favour of the assessee by virtue of the decisions of the co-ordinate bench in assessee's own case in A. Ys. 2011-12 to 2014-15 (in ITA No. 4533 to 4537 Mam/2024 vide order dated 04.04.2025, wherein while dealing with identical issue, the co-ordinate bench has held as under: 8. We shall now take up the appeal filed for 41 2012-13 in 2014-15. In these three sears. the Revenue in cha....
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....high export intensity employment potential and is incentivized at 2% of FOB value of exports This incentive way as linked to employment generation by the company connected to the export of goods and mercantile. It is linked with capital in nature. The CITT(A) has placed reliance upon the decision of the Hon'ble Supreme Court in the care of CIT IS Ponni Sugars & Chemicals Lad (2008) 306 ITR 392 (SC). Eastman Exports Global Clothing Pet Lad in ITA No 47 MDS 2016 dated 17.03.2016 and Sutlej Textiles & Industries Lad (ITA. No. 5142 Del 2013) and Mix. Gloster Jute Mills Laud. Vs. All CIT in ITA. No 687/ Kol 2010 These issues have duly been examined and discussed by CITA) his order. The copy of scheme has also been filed by t. Representative of the assessee for examination. It is necessary to advert the contents on record- 3.14 .... 3.15 .... 3.16 Status Holders Incentive Scrip (SHIS) 3.16.1 With an objective to promote investment in upgradation of technology of some specified sectors as dated in Para 3.16.4 below, Status Holders shall be entitled to incentive scrip a 1% of FOB value of exports made during 2009-10, 2010-11 and during 2011-12, of th....
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....s capital in nature 11.2. Following the above said decisions, we uphold the order passed by the Ld. CIT(A) on this issue. 33. Factual position relating to the issue being identical in the impugned assessment year, respectfully following the decision of the co-ordinate bench, we uphold the order of Id. first appellate authority on the issue. Hence, grounds are dismissed." 17. Ld. CIT(A) after taking into consideration the decision of Coordinate Bench on similar issue as well as taking into account the objectives of the schemes which are for promoting industrial growth, technological advancement and development, found the claim of the assessee valid to treat it as capital receipts both, under the normal provisions of the Act as well as while computing the book profit u/s. 115JB. 17.1. It is also important to note the contents of remand report called by ld. CIT(A) from the ld. Assessing Officer which is dated 18.11.2024. In this report at para-4.1, ld. Assessing Officer mentions about the salient objectives of the schemes is to achieve industrialisation in the specified areas of Himachal Pradesh and Sikkim and to generate employment opportunities. The said para....
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....tanjali food Ltd [2024] 161 taxmann.com 815 (Mumbai-Tribunal) Focus Product Scheme 3. Vinati organics vs DCIT 2022 (4) TMI 1584-ITAT Mumbai Status Holder Incentive Scheme 4. DCIT vs Aarti Industries [2025] 178 taxmann.com 676 (Mumbai-Trib.) Status Holder Incentive Scheme 5. Principal Commissioner of Income-tax, Central-2, Kolkata vs. Ankit Metal & Power Ltd. [2019] 109 taxmann.com 93 (Calcutta) Interest and Power Subsidy (115JB) 18. Having considered the facts of the case and long line of judicial precedents, as well as the recent decision in the case of Aarti Industries Ltd. (supra), we are in agreement with the findings arrived at by ld. CIT(A) on this aspect also. Accordingly, in the given set of facts and position of law, ground nos. 16 to 20 are dismissed. 19. Now we take up appeal for Assessment Year 2016-17 in ITA No. 3991/Mum/2025, wherein also the grounds raised are identical except for variation in the quantum of disallowance/additions. The coverage and our observations and findings from our adjudication from Assessment Year 2015-16 apply mutatis mutandis. We find that ground nos. 1 to 10 raised in appeal for Assessment Year 2016-17 are....
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....ation vide order of the Tribunal in assessee's own case for A.Y. 2014-15. (Similar to Gr. no. 11 of A.Y. 2015-16) 20. In respect of ground nos. 11 and 12, relating to disallowance u/s. 14A r.w.r. 8D, there is a change in the factual position. Assessee had earned dividend income of Rs. 88,13,907/- claimed as exempt u/s.10(34). Assessee made a suo moto disallowance of Rs. 6,39,838/- being 0.5% of the annual average value of investment yielding exempt income in the year under consideration. Ld. Assessing Officer applied Rule 8D to arrive at a disallowance of Rs. 11,57,858/- and thus, made an incremental disallowance of Rs. 5,18,020/-. This disallowance computed by ld. Assessing Officer included disallowance under Rule 8D(2)(ii) of Rs. 5,17,834/- towards interest component. In this respect, assessee has factually demonstrated availability of sufficient owned funds for the purpose of making investments which yielded exempt income. Details in this respect is tabulated below: Sr. No. Particulars Amount as on March 31, 2016 Amount as on March 31, 2015 1 Share Capital 28,21,58,156 27,12,94,553 2 Reserve and surplus 7257,53,78,799 4924,92,13,805 ....
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....e is in appeal before the Tribunal. On the uncontroverted facts tabulated above, the issue contested before us is no longer res integra, as already held by Hon'ble Supreme Court in the decisions referred above. Respectfully, following the same, disallowance made by ld. Assessing Officer is deleted, as held by ld. CIT(A). Accordingly, ground no.11 raised by the Revenue is dismissed. 20.4. Ground no. 12 relates to computation of book profit by including disallowance made u/s. 14A which has already been dealt by us in the appeal for Assessment Year 2015-16 (supra). Our observations and findings cover this issue vide ground nos. 13 of the appeal for Assessment Year 2015-16. The same is accordingly, dismissed. 21. Ground nos. 13 to 17 relates to issue of taxability of subsidies, which has already been dealt by us in ground nos. 16 to 20, in appeal for Assessment Year 2015-16 (supra). In the year under consideration, i.e., A.Y. 2016-17, amendment brought in section 2(24)(xviii) by Finance Act, 2015 w.e.f. 01.04.2016 becomes relevant. The issues dealt in these grounds have two components namely, one relating to excise duty exemption and the second relating to taxability of FMS a....
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.... 50,85,60,24,755 Trading Sales 1,73,95,39,685 Net Sales 49,11,64,85,070 Sales of Unit 4,85.02.26,027 4,07,47,56,085 55,52,86,723 4,51,46,45,051 1,21,65,41,861 2,40,35.065 Sales Ratio 9.87% 8.30% 1.13% 9.19% 2.48% 0.49% Allocation of Interest Expenses Total Interest Expense as per P&L Account (note 25 of Standalone Profit & Loss A/c of GPL) 30,18,91,525 Interest Expenses Allocated (in Sales Ratio) 2,98,11,623 2,50,45,244 34,13,036 2,77,48,995 74,77,401 14,75,361 9,49,71,660 Interest Expenses already allocated in 10,42,32,000 72,21,636 14.24,896 11,28,78,532 Interest Expense to be allocated 2,98,11,623 2.50,45.244 (10,08,18,964) 2,77,48,995 2.55,765 50,465 (1,79,06,872) Rate of 30 30 100 100 100 100 Interest Expense Disallowed 89.43.487 75,13,573 (10,08,18,964) 2.77,48,995 2.55,765 50.465 (5,63,06,678) 1 1 1 x Note 1: officer Solan unit x For Baddi I, Solan (Baddi II) and Sikkim unit, head office has not invested any money in these unit. On the contrary these three units have lent money to head office. The issue is fully covered in the favour of assessee vide Hon'ble Mumbai Tribunal's order for ass....