TaxTMI 
TaxTMI 
2026 (7) TMI 958
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....rder for the sake of convenience and brevity. 3. The assessee has raised following grounds of appeal:- "1. On the facts and in the circumstances of the case and in law, the order passed by the Learned Commissioner of Income-tax (Appeals) [the 'Ld. CIT(A)') erroneously affirming the findings of the learned Assessing Officer [the 'Ld. AO'] is unsustainable and ought to be quashed. 1. Ground No. 1: Disallowance under section 14A read with Rule 8D Rs. 62,45,631/- 1.1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) grossly erred in sustaining the disallowance of Rs. 62,45,631/- made by the Ld. AO under section 14A of the Income-tax Act, 1961 ('Act') read with rule 8D of the Income-tax Rules, 1962 ('Rules') in relation to earning of income exempt under section 10 of the Act 1.2. The Ld. CIT(A) grossly erred in mechanically relying on the judgements of the Hon'ble ITAT, Ahmedabad in the case of Sun Pharmaceuticals Industries Limited for AY 2008-09 and AY 2009-10 without appreciating that in the said cases, the expenditure involved was selling and distribution expenditure incurred on be....
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....es carried out in the assessment order and further affirmed in the CIT(A) order. 3. Re: Initiation of penalty proceedings under section 270A(9) of the Act 3.1. The Ld. CIT(A) failed to appreciate that the initiation of penalty proceedings under section 270A(9) by the Ld. AO was void-ab-initio and hence bad in law. The said penalty was initiated without appreciating the fact that Appellant has made adequate disclosures in its computation of income along with relevant notes and further issues were highly legal and debatable in nature." 4. The Revenue has raised the following grounds of appeal:- "1.1) On the facts and circumstances of the case and in law, the learned CIT(A) erred in allowing the claim of the assessee for deduction u/s 801E of the Act of Rs. 887,84,51,154/- in respect of Sikkim Unit without appreciating the fact that mere submission of journal entries generated in computer cannot be treated as authentic document for establishing purchase of plant and machinery and that the assessee firm viz. Sun Pharma Sikkim, as held by the Assessing Officer, was constituted by reconstruction of existing business of M/s. Sun Pharma Industries. 1.....
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....n appeal before the Ld. CIT(A). The Ld. CIT(A), after considering the submissions of the assessee, granted partial relief by deleting certain additions/disallowances, while sustaining the remaining additions. 7. Being aggrieved by the additions/disallowances sustained by the Ld. CIT(A), the assessee is in appeal before the Tribunal. The Revenue, on the other hand, has also preferred an appeal challenging the relief granted by the Ld. CIT(A) in respect of the additions/disallowances deleted by him. Assessee's Appeal (ITA No.1734/Ahd/2024) 8. The only grievance raised by the assessee is against the disallowance made by the Assessing Officer and sustained by the Ld. CIT(A) u/s 14A r.w. Rule 8D amounting to Rs. 62,45,631/-. 8.1 We have heard the rival submissions and perused the material available on record. The facts reveal that the assessee held investments in tax-free bonds for a period of three months and claimed exemption u/s 10(15) of the Act, which did not involve any major activity of buying and selling. The assessee had sufficient own funds to meet the investments, hence no disallowance on interest is called for. The Ld. CIT(A) disallowed 15% of the salary paid to ....
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....e material available on record. We find that the issue involved in the present ground stands covered by the ITAT Order for AY 2013-14 to AY 2015-16 and by the CIT(A) Order for AY 2018-19 to AY 2022-23. The Ld.CIT(A) has followed the consistent view taken in the preceding years and no material has been brought before us to justify a different view. For the sake of completeness, the order of the Co-ordinate Bench of the Tribunal for AY 2015-16 (ITA No.741/Ahd/2019) in this regard is reproduced hereunder:- "........... The relevant finding of the Coordinate Bench for AY 2012-13 reads as under: "... 8. We have heard the rival contention of both the parties and perused the materials available on record. At the outset, we find that issue on hand is covered by the order of the coordinate bench of this tribunal in the own case of the assessee for AY 2010-11 in ITA Nos. 3541/Mum/2017, where the bench vide order dated 16th May 2019 held as under: ....... ... ... 26. We have duly considered rival contentions and gone through the details. According to the AO, bills having value of Rs. 6.88 crores with regard to certain additions to plant & ....
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.... in the own case of assessee, we uphold the finding of the learned CIT(A). Thus, the ground of appeal raised by the Revenue is hereby dismissed.' 22.1. Since the eligibility of deduction was upheld in the first year of claim being AY 2010-11, the same cannot be disputed in the subsequent year of claim on the same ground of ineligibility. More particularly when the AO himself has observed that there is no change in facts and circumstances of the case during the year under consideration. Before us, no material has been brought on record by the Revenue to demonstrate the above decision of the Co-ordinate bench in earlier year has been reversed or set aside by the higher Judicial Forums. Thus, respectfully following the Coordinate Bench decision, we find no infirmity in the findings of Ld. CIT(A).." 10.2 Respectfully following the earlier orders in the assessee's own case, we uphold the order of the Ld. CIT(A). Accordingly, the Ground of Appeal raised by the Revenue is dismissed. Ground No.2 of the Revenue's appeal is dismissed. 11. Ground No.3 of appeal raised by the Revenue relates to deletion of the addition of Rs. 104,16,66,667/- made by the Assessing Officer ....
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....ligible for deduction while computing book profit under section 115JB. He accordingly directed the Assessing Officer to delete the addition. 12. Aggrieved by the aforesaid findings, the Revenue is in appeal before us. 13. The Ld. CIT-DR relied upon the assessment order and submitted that since the assessee had admittedly not claimed the deduction in the original return of income and had merely raised the claim by way of notes during the assessment proceedings, the Assessing Officer was justified in not entertaining the claim. 14. The Ld. Sr. Advocate, appearing for the assessee, on the other hand strongly supported the order of the Ld. CIT(A). He submitted that although the claim could not be entertained by the Assessing Officer in view of the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. (supra), there was no embargo on the powers of the appellate authorities to admit and allow a legally sustainable claim, as held by the Hon'ble Bombay High Court in Pruthvi Brokers & Shareholders Pvt. Ltd. (supra). 14.1 He further submitted that the Debenture Redemption Reserve was created pursuant to the statutory mandate contained in section 71(4) of the Compan....
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....l statements, has recorded a categorical finding that the provision was created by debit to the Profit & Loss Account while appropriating the profits of the year. The Revenue has not brought any material before us to controvert this factual finding. 15.2 We further find that the controversy is no longer res integra. The Hon'ble Supreme Court in National Rayon Corporation Ltd. v. CIT (supra) has authoritatively held that the liability towards redemption of debentures is a known and existing liability and that any amount set apart for meeting such liability cannot be regarded as a reserve. Following the aforesaid decision, the Hon'ble Bombay High Court in CIT v. Raymond Ltd. (supra), while dealing with the provisions of section 115JA, held that a Debenture Redemption Reserve is not a reserve within the meaning of the Explanation to the MAT provisions since it merely represents an amount retained for meeting a known liability. The same principle has thereafter been followed by the Coordinate Bench of the Ahmedabad Tribunal in ACIT v. Genus Electrotech Ltd. (supra) while interpreting section 115JB of the Act. Respectfully following the aforesaid binding precedents, we are of....