Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (5) TMI 576 - ITAT MUMBAIDisallowance of deduction u/s. 80IA and disallowance of deduction u/s. 80IA on ‘Other incomes’ - HELD THAT:- Following the order of Tribunal in assessee’s own case for assessment year 2005-06 [2022 (12) TMI 28 - ITAT MUMBAI] the assessee’s claim of deduction u/s. 80-IA of the Act was allowed in assessment year 2006-07 and 2007-08 [2023 (5) TMI 508 - ITAT MUMBAI] In the impugned assessment year the assessee’s claim of deduction u/s. 80IA of the Act was rejected for the reason similar to assessment year 2006-07. Following the decision rendered in assesee’s own case for assessment year 2006-07 wherein held that the assessee started telecommunication services after 01/04/1995 and hence, the assessee is eligible to claim deduction u/s. 80-IA(4) - ground of the appeal is allowed. Claim of deduction u/s. 80-IA of the Act on other incomes, viz. interest income and miscellaneous income as relying on assessment year 2005-06 [2022 (12) TMI 28 - ITAT MUMBAI]. Disallowance of depreciation on Asset Restoration Cost (ARC) - HELD THAT:- In assessment year 2006-07 [2023 (5) TMI 508 - ITAT MUMBAI] this issue was restored back to the file of Assessing Officer for re-examination - In the impugned assessment year we find that the Assessing Officer has failed to examine the issue in right perspective. We deem it fit to restore the issue to the file of Assessing Officer for fresh adjudication Disallowance u/s. 14A r.w.r 8D - case of assessee is that no exempt income was earned by the assessee during the period relevant to assessment year under appeal - HELD THAT:- This fact has not been rebutted by the Department. The settled legal position is, no disallowance u/s. 14A is to be made where the assessee has not earned any exempt income during the relevant period. Thus, the disallowance u/s. 14A of the Act made by Assessing Officer is deleted and ground of the appeal is allowed. Disallowance of interest expenditure - loans given to subsidiaries - HELD THAT:- As decided in own case [2023 (5) TMI 508 - ITAT MUMBAI] 2006-07 where the assessee is having mixed bag of interest free funds and interest bearing funds and the assessee has made investment out of such common pool of funds, the presumption would be that the investments are made out of interest free funds available with the company provided the said funds are sufficient to meet the investments. Thus, disallowance of interest expenditure on loans given to subsidiaries is directed to be deleted. Disallowance of interest on account of capital work-in-progress expenditure - loans have been utilized for substantial extension of the existing business - HELD THAT:- While deciding similar issue in assessment year 2006-07 [2023 (5) TMI 508 - ITAT MUMBAI] the Co-ordinate Bench had explained meaning of extension of business in respect of Telecommunication services. Following the order of Co-ordinate Bench, the disallowance made by the Assessing Officer is directed to be deleted. Disallowance of expenses incurred for raising loans - assessee has incurred expenditure for raising of loans - HELD THAT:- Tribunal in assessment year 2006-07 and 2007-08 [2023 (5) TMI 508 - ITAT MUMBAI] deleted the disallowance qua raising of loans held that expenditure on raising of loan is revenue in nature, hence, allowable. The nature of expenditure on raising of loan does not depend upon nature and purpose of loan. Hence, we have no hesitation in holding that the expenditure incurred for raising of the loan is allowable u/s.37(1) Disallowance of roaming charges u/s.40(a)(ia) - HELD THAT:- In assessment year 2006-07 in assessee’s own case [2023 (5) TMI 508 - ITAT MUMBAI] disallowance u/s. 40(a)(ia) of the Act was directed to be deleted as payment of roaming charges does not fall under the ambit of TDS provision either u/s. 194C or 194J of the Act, hence, addition made u/s. 40(a)(ia) of the Act was deleted - Decided in favour of assessee. Non-reduction of foreign exchange gain of capital nature from profits of business - Since, the claim was not made in the return of income, the AO did not entertain the claim of assessee - contention of the assessee is that in assessment year 2006-07, the assessee had suffered loss on foreign exchange fluctuations. The said loss was held to be on capital account by the AO - HELD THAT:- Purportedly, the assessee had made claim before the AO during assessment proceedings hence, the same was not considered by the Assessing Officer. Thereafter, the assessee raised ground before the DRP in objections. The DRP recorded the ground in Para-8 of the directions, however, the same was not adjudicated. In the back drop of above facts, without delving further on the issue, we deem it appropriate to restore this issue back to the file of Assessing Officer for adjudication on merits after affording reasonable opportunity of hearing/making submissions to the assessee, in accordance with law. Thus, ground of the appeal is allowed for statistical purpose. MAT computation u/s. 115JB - deduction of provision for doubtful debts amounting to Rs.246.00 million for the purpose of computing book profits u/s. 115JB - HELD THAT:- We find that in assessment year 2006-07 [2023 (5) TMI 508 - ITAT MUMBAI] held that when the assessee chose to write back the provision for doubtful debts by creating it in its P&L Account, which in the present case is Rs.326.79 million, the same would obviously be outside the ambit of provision of section 115JB of the Act. In fact, this is specifically provided in clause (i) of Explantion-1 to section 115JB(2) of the Act under expression “as reduced by” while computing book profit u/s. 115JB of the Act. TP Adjustment - reimbursement of salary and related costs of seconded employees - contention of the assessee is that the amount disallowed by the DRP was paid towards travel cost/relocation cost of five seconded employees and reimbursement of salary and other allowances were allowed on debit notes, similar treatment can be given to the reimbursement of relocation costs - HELD THAT:- Once it has been accepted that the five employees were seconded to India by overseas AEs, the relocation of those employees to India is a consequent step. There would be cost attached to relocation of such employees. The said cost has either to be borne by the AE or the assessee. This fact can be determined from the terms and conditions of secondment of employees. In case relocation costs/travel costs are borne by the assessee, the same deserves to be allowed if they are reimbursed on cost to cost or are paid directly to the seconded employees - restore this issue back to the file of Assessing Officer for re-examination. Ground allowed for statistical purpose. Non-grant of full credit in respect of TDS - AO is directed to re-examine and grant credit of the TDS on the basis of documents available on record and decision of the Tribunal, in accordance with law.
|