Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2053 - AT - Income TaxDisallowance made u/s 14A - Held that:- The decision rendered by Hon‟ble Bombay High Court in the case of HDFC Bank (2014 (8) TMI 119 - BOMBAY HIGH COURT) shall apply to the facts of the instant case. Accordingly, consistent with the view taken by the co-ordinate bench in the assessee‟s own case in the earlier years, we hold that the interest disallowance made by the tax authorities is not called for. Accordingly, we set aside the order of ld.CIT(A) in respect of interest disallowance and direct the AO to delete the same. - Decided in favour of assessee. Disallowance of administrative expenses relating to exempted income - Held that:- We notice that the Ld CIT(A) has worked out the same as per Rule 8D(iii) of IT Rules, even though he accepted the fact that Rule 8D shall not apply to the year under consideration. However, we notice that the assessing officer has worked out the disallowance at ₹ 10.00 lakhs by considering the explanations of the assessee. Since the disallowance of administrative expenses is to be worked out on a reasonable basis as per the decision of Godrej & Boyce Mfg. Co. Ltd (2010 (8) TMI 77 - BOMBAY HIGH COURT) and since major part of investments has been brought forward from the earlier years, in our view, the disallowance made by AO does not call for interference. Accordingly, we set aside the order of Ld CIT(A) on this issue and sustain the disallowance of ₹ 10.00 lakhs made by the AO. - Decided against assessee. Disallowance of foreign travel expenses - Held that:- This issue has been decided against the issue by the Tribunal in the assessee's own case, vide its order for AY-2004-05 - Decided against assessee. Assessment of rental income of house property and service charges as income from house property - Held that:- This issue has been decided in the assessee's own case CIT(A) confirmed the assessment of proper rental income as income from house property and recovery of service charges as income from other sources. The CIT(A) accordingly, directed the AO to allow the deduction of the expenses incurred for earning the income from service charges as directed earlier by the Tribunal in the assessment year 1990-91. So following the same, the CIT(A) has sustained the assessment of rental income as income from property and the income from service charges under the head income from other sources” and directed the AO to grant deduction of expenses incurred for earning from service charges. This view is consistent to the view taken by the Tribunal for the earlier years. This ground is rejected- Decided in favour of assessee. Disallowance of deduction pertaining to IFFCO arbitration Claim - Held that:- There is no dispute that the arbitration award was given in the month of July, 2004 and hence the said award relate to the assessment year under consideration. It is a fact that the assessee has challenged the arbitration award by filing appeal before the Hon'ble High Court. However, the Hon‟ble Gujarat High Court has held in Navijan Roller Flour and Pulse Mills Ltd Vs. Dy. CIT [2009 (3) TMI 132 - GUJARAT HIGH COURT] that the liability accrues at the earliest point of time and the fact that the award was challenged in appeal cannot be a ground for holding that the liability had not been incurred. Accordingly by following the Hon‟ble Gujarat High Court (referred supra), we direct the AO to allow deduction of the arbitration award. The assessee has also raised an additional ground praying that the interest accrued thereon up to 31.3.2005 should also be allowed. However, we prefer to restore this matter to the file of the AO with the direction to examine the arbitration order and take appropriate decision in accordance with the law, after affording necessary opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. Addition u/s 92CA made in respect of purchase from its Associated Enterprises - Held that:- There is no difference in the methodology adopted by AE and non-AE for determining the price. The difference has occurred due to following „financial year basis‟ for AE, where as the non-AEs have followed calendar year basis. Since the assessee is following a particular pattern for its AEs year after year, we find merits in the contentions of the Ld A.R that the temporary price difference occurring due to fluctuations in TC/RC charges should be ignored. These submissions brings out the exact reason for the price difference and in our view, the said reasons are reasonable and need to be factored in, i.e., adjustments should be permitted, in which case it would result that the payments made to AE was at ALP. Further, it is not the case that the assessee was paying higher purchase price to its AE year after year in the months of Jan to March. In subsequent years, the assessee has gained by paying lower purchase prices. In view of the foregoing, we are of the view that the assessee should be considered as having paid the purchase price to its AE at ALP only and hence there is no necessity to make adjustments. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the addition. - Decided in favour of assessee. Addition u/s 92CA in respect of Corporate Guarantee fee - Held that:- Rate of 0.50% is consistently followed in many of the cases by the Tribunal. In fact, in the case of Everest Kanto Cylinder Ltd, [2015 (5) TMI 395 - BOMBAY HIGH COURT ] has determined the rate at 0.50% and the same has not been disturbed by the Hon'ble Bombay High Court. Accordingly, we modify the order of Ld CIT(A) on this issue and direct the AO to compute the addition by adopting the rate of 0.50%. Eligibility of the assessee to claim deduction u/s 80IA allowed to assessee. Since the assessee is eligible to claim deduction u/s 80IA of the Act in respect of Co-generation Plat 2, he was justified in holding that the assessee could exercise option u/s 80IA(2) of the Act. State electricity board rates has to be taken as market value for computing deduction u/s 80IA of the Act. Hence, we do not find any infirmity in the decision of Ld CIT(A) on this issue to compute deduction u/s 80IA by applying supplier/UPSEB market rate.
|