TMI Blog2018 (6) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, we restore the issue in dispute to the file of the Assessing Officer for deciding in accordance with law after providing adequate opportunity of being heard to the assessee. Not granting TDS credit - Held that:- In the instant case, the assessee has not presented before us details of each TDS amount, credit of which has not been allowed by the Assessing Officer. In view of circumstances, we restore this issue to the file of the Assessing Officer and direct him/her to verify and allow the claim of the TDS in view of our direction above. We also direct the assessee to produce original copies of TDS certificates for verification along with one photocopy of said certificates before the Assessing Officer within 3 months of receipt of this order. The Assessing Officer may verify genuineness of the TDS certificates and allow the credit of the TDS amount accordingly Error in tax computation form - arithmetical error - Held that:- We are agreed with the Ld. counsel that Assessing Officer has committed mistake in transporting amount of profit under section 115 JB of the Act from assessment order to tax computation form. We, accordingly, direct the Assessing Officer to recti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case, the learned AO has erred in considering the Assessed Book Profit in Income Tax Computation Form of ₹ 1128,29,54,248/- instead of ₹ 1018,69,66,304/-, as computed in the assessment order. The Id CIT(Appeal) has also erred in not adjudicating specifically this ground no.7 of Form No.35 taken before her. 6. That consequential to our aforesaid grounds of appeal, the learned AO has erred in charging interest u/s 234B amounting to ₹ 32,40,33,468/-. 7. That the appellants request be allowed to add, modify and delete any other ground (s) of appeal. 3. Briefly stated facts of the case are that the assessee filed return of income on 28/09/2011, declaring total income of ₹ 529,46,06,162/- under normal provisions of the Income-tax Act, 1961 ( in short the Act ) and book profit under section 115JB of the Act at ₹ 876,95,00,309/-. The income declared under normal provisions of the Act was subsequently revised on 19/09/2012 at ₹ 527,92,60,912/-. The case was selected for scrutiny and notice under section 143(2) of the Act was issued and complied with. In the assessment scrutiny proceedings completed under section 143(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) for assessment year 2009-10, restricted the disallowance to ₹ 58.55 lakhs under Rule 8D(2)(iii), and deleted the disallowance of ₹ 630.79 lakhs made under Rule 8D(2)(ii) of the Rules. 4.3 Before us, the Ld. counsel submitted that the Assessing Officer in assessment years 1996-97 and 1997-98 has decided the securities held by the assessee bank as a stock-in-trade for the purpose of Income-tax. Accordingly, he submitted that it stands settled that securities are held by the assessee as a stock in trade and dominant and immediate object behind acquisition of securities was to earn profit on sale of securities at the earliest point of time, which is chargeable to tax under the Act and dividend and tax-free income was received incidentally. The Ld. Counsel submitted that during the year under consideration, the assessee earned profit on sale of securities of ₹ 75.16 crore, which is taxable as business income and earned dividend income of ₹ 4.75 crore, which is incidental to trading of securities and therefore, provisions of section 14A of the Act are not applicable on dividend/tax-free income earned by the assessee. The Ld. counsel submitted that when sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant material on record. The Ld CIT(A) has only restricted the disallowance under Rule 8D(2)(iii) of the Rules which is computed at the rate of 0.5 % of the value of the assets capable of yielding exempted income, and before us the assessee is aggrieved with said addition only, thus the arguments of own funds utilized in investment are not relevant as addition under Rule 8D(2)(ii) are not in challenge before us in present appeal. The main argument which has been raised before us by the Ld. counsel is that shares/units etc. have been held by the assessee during the year under consideration as stock-in-trade and main purpose of which was to trade those shares and earn profit thereon. The contention of the Ld. counsel is that while hearing the case of State Bank of Patiala alongwith Maxxop of investment limited, Hon ble Supreme Court has held that when the shares are held as stock in trade with the object of earning taxable profit, no disallowance under section 14A of the Act is required. We do not agree with the above argument of the Ld. counsel. In our opinion the Hon ble Supreme Court in para 38 and 39 of the decision in the case of Maxxop Investment Limited (supra) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the formula contained in Rule 8D of the Rules and holding that section 14A of the Act would be applicable. In spite of this exercise of apportionment of expenditure carried out by the AO, CIT(A) disallowed the entire deduction of expenditure. That view of the CIT(A) was clearly untenable and rightly set aside by the ITAT. Therefore, on facts, the Punjab and Haryana High Court has arrived at a correct conclusion by affirming the view of the ITAT, though we are not subscribing to the theory of dominant intention applied by the High Court. It is to be kept in mind that in those cases where shares are held as 'stock-in-trade', it becomes a business activity of the assessee to deal in those shares as a business proposition. Whether dividend is earned or not becomes immaterial. In fact, it would be a quirk of fate that when the investee company declared dividend, those shares are held by the assessee, though the assessee has to ultimately trade those shares by selling them to earn profits. The situation here is, therefore, different from the case like Maxopp Investment Ltd. where the assessee would continue to hold those shares as it wants to retain control over the investee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggrieved with above amount added to the book profit. 5.2 The Ld. counsel of the assessee submitted that this ground is consequential to ground No.1 and hence, no separate submission was required on this issue. On the contrary, the Ld. DR submitted that issue may be decided in accordance with law. 5.3 We have heard the rival submissions and perused the relevant material on record. The controversy raised in this ground is whether the disallowance, which has been computed for the purpose of section 14A of the Act can be imported to the provisions of section 115JB of the Act, without any clear mention in the said provisions. We find that this controversy has been resolved by the Tribunal Special Bench in the case of Vireet Investment Private Limited, reported in 165 ITD 0027 (Delhi), wherein it is held that that the computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A read with Rule 8D of the Income tax Rules 1962. 5.4 In view of the above decision of the Tribunal, we are of the opinion that addition under clause (f) of Explanation 1 to section 115JB of the Act need to be determined without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he database of the Income Tax Department, provides details of tax paid by any taxpayer or tax deducted by the dedcutor in case of that taxpayer. At the time of deduction of tax at source, the deductor issues TDS certificate to the deductee also. Against the tax determined by the Income Tax Department, credit of tax paid is given on the basis of the form No.26AS. As far as the amount of tax deducted at source is concerned, it reflects in form No.26AS, when the deductor deposit the TDS amount in the government account and file its quarterly TDS returns. So, if TDS return has not been filed by the deductor, said amount will not reflect in the form No. 26AS of the deductee taxpayer. In our opinion, in such cases, not allowing the TDS credit by the Income Tax Department is not justified. If the assessee produce TDS certificate issued to it by the deductors, then the Assessing Officer can verify the fact of genuineness of those TDS certificates and then allow the credit to the assessee. We do not find any reason, as why the Assessing Officer will wait till said amount reflects in form No.26AS and then only allow the credit. For any inaction on the part of the deductor in late deposit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount due Amt paid Shortfall 5.1 June 15 @ 12% of S.No.4 203630676 379300000 0 5.2 Sept 15 @ 36% of S.No.4 610892028 1137900000 0 5.3 Dec 15 @ 75% of S.No.4 1272691724 1459200000 0 5.4 Mar 15 @ 100% of S.No.4 1696922299 1644200000 52722299 6. Interest u/s 234C @1% for one month 527223 Further after considering claim of TDS of ₹ 7,85,21,447/- made in the revised return as against claim of TDS allowed by Id. AO of ₹ 5,67,16,195/-, the interest u/s 234C works out to ₹ 3,09,170/-. It is therefore prayed that necessary relief may be granted against aforesaid wrong charging of interest u/s 234C. 7.2 The DR submitted that issue may be restored to the file of the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes. ITA No.1249/Del/2015 for AY: 2012-13 11. The grounds raised in IT No. 1249/Del/2015 for assessment year 2012-13 are reproduced as under: 1. That on the facts and circumstances of the case and provisions of the law, the learned CIT(Appeal) has erred in restricting the disallowance u/s 14A r.w.r. 8D of ₹ 62,62,000/-. (i.e. V2 % of average investments against exempted income) in respect of exempted income of ₹ 4,62,11,137/-. 2. That in light of the ground no.1 above, the learned CIT(Appeal) has erred in restricting the addition of ₹ 62,62,000/- to book profit under MAT (section 115JB) in respect of exempted income. 3. That on the facts circumstances of the case and provisions of the law, the learned Assessing Officer has erred in not granting the TDS credit of ₹ 41,11,715/-/-. The Id CIT(Appeal) has also erred in not fully appreciating and adjudicating this issue in light of our submissions made before her resulting into passing of non-speaking order which is against principle of natural justice. 4. That on the facts circumstances of the case and provisions of the law, the learned Assessing Officer has erred in charging i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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