TMI Blog2018 (11) TMI 1949X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year. While doing so, he must keep in view the ratio laid down in the decisions to be cited by the assessee. Needless to mention, before deciding the issue, the Assessing Officer must afford reasonable opportunity of being heard to the assessee. Accordingly, we restore the issue to the Assessing Officer for de novo adjudication. Ground is allowed for statistical purposes. Nature of expenses - Amortization of lease premium - AO after verifying the details available on record found that the aforesaid amount was paid on account of lease premium on various lease hold lands held by the assessee and concluded that it is in the nature of a capital expenditure - HELD THAT:- As could be seen, the claim of amortization of lease premium on lease hold land is a recurring dispute between the assessee and the Department from the preceding assessment year. While deciding the disputed issue in assessee s own case for assessment year 2004 05 [ 2017 (7) TMI 1289 - ITAT MUMBAI] in ITA no.5977/Mum./2011, dated 26th July 2007, the Tribunal upheld the disallowance made by the Assessing Officer. The same view was reiterated by the Tribunal while deciding assessee s appeal in ITA no.[ 2018 (5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing an accounting method as per which the broken period interest is offered as income when it is received, the broken interest paid while purchasing the securities cannot be disallowed merely on the reasoning that the assessee is not showing the broken period interest income on accrual basis. As could be seen, the Hon'ble Jurisdictional High Court in case of State Bank of India, [ 2016 (8) TMI 963 - BOMBAY HIGH COURT] after following the decision of the said Court in case of American Express International Corporation [ 2002 (9) TMI 96 - BOMBAY HIGH COURT] has rejected Revenue s appeal against allowance of assessee s claim of deduction in respect of broken period interest paid. While doing so, the Hon'ble High Court has also upheld the decision of the Tribunal in holding that the broken period interest income has to be taxed on due basis instead of accrual basis. It is evident, the aforesaid decision of the Hon'ble Jurisdictional High Court was neither referred to nor examined by the Departmental Authorities while deciding the issue. We restore the issue to the Assessing Officer for deciding afresh. MAT applicability u/s 115JB - As per the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act r/w rule 8D which worked out to Rs.80,33,90,425. Since the assessee itself had disallowed an amount of Rs.9,58,601, the Assessing Officer made a further disallowance of Rs 80,24,31,824, under section 14A of the Act. The assessee challenged the disallowance before learned Commissioner (Appeals). 6. The learned Commissioner (Appeals) after considering the submissions of the assessee in the context of facts and material on record having found that in assessee s own case for assessment year 2009 10, similar disallowance made under section 14A of the Act was upheld by him, confirmed the disallowance made by the Assessing Officer. 7. The learned Authorised Representative reiterating the stand taken before the Departmental authorities submitted, the assessee having not incurred any expenditure to earn exempt income no disallowance is warranted. Further, he submitted, since the assessee had huge interest free surplus fund of Rs.38,153 crore as against investment made in exempt income yielding asset amounting to Rs. 1,360 crore, neither any disallowance on account of interest expenditure nor administrative expenditure can be made. In this context, he relied upon the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the decision of the Hon'ble Punjab Haryana High Court in case of State Bank of Patiala (supra) on identical issue. Undisputedly, the aforesaid decision of the Hon'ble Supreme Court having been delivered recently, the Departmental Authorities while deciding the issue did not have the benefit of it. In view of the aforesaid, we restore the issue to the file of the Assessing Officer for deciding afresh after considering the submissions made by the assessee and applying the ratio laid down by the Hon'ble Supreme Court in case of Maxopp Investment Ltd. (supra) and specifically keeping in view the observations made in Para 39 and 40 of the said judgment. This ground is allowed for statistical purposes. 11. Further, in the impugned assessment year, in addition to the plea that investments are held as stock in trade, the learned Authorised Representative has also submitted that it has huge surplus fund available to make investment, hence, no disallowance either of interest expenditure or administrative expenditure can be made under rule 8D. Further, he has submitted that disallowance under rule 8D should be restricted to the investments which have yielded exempt inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und no.3, the assessee has challenged the decision of the Departmental Authorities in bringing to tax the income of foreign branches. 19. Brief facts are, in course of the assessment proceedings, the Assessing Officer noticing that in the revised return of income the assessee has sought exclusion of income relating to foreign branches amounting to Rs 790,43,71,033, by referring to the provisions of section 90 of the Act called upon the assessee to justify its claim. After considering the submissions of the assessee, with reference to double taxation avoidance agreement between India and respective countries where branches of the assessee are situated, the Assessing Officer held that as per sub section (3) of section 90 of the Act, any term used but not defined in the Act or in the double taxation avoidance agreement with a country shall have the same meaning as provided in Central Government notification no.S.O. 2123(E) dated 28th August 2008. Referring to the aforesaid notification, the Assessing Officer held that any income of a resident of India though may be taxed in other country, however, such income shall be included in his total income chargeable to tax in India and reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India. He submitted, while deciding identical issue in assessee s own case in the preceding assessment years the Tribunal has neither taken note of section 90(3) of the Act read with notification no.91/2008, dated 28th August 2008 nor the decisions of the Tribunal in Essar Oil Ltd. (supra) and Bank of Baroda (supra). Therefore, he submitted, the inclusion of income of foreign branches in assessee s income is valid and as per the provisions of the Act. 23. In rejoinder, the learned Authorised Representative submitted, in course of hearing of appeal for assessment year 2009 10, the assessee had filed written submissions before the Tribunal stating the reasons why the decision in Essar Oil Ltd. (supra) will not be applicable. He submitted, the issue having been decided in favour of the assessee, not only by the Tribunal but by the Hon'ble High Court in the preceding assessment years, assessee s claim has to be allowed. 24. We have considered rival submissions and perused materials on record. No doubt, in assessee s own case for assessment year 2004 05, the Tribunal following its own decision for assessment year 2003 04, has held that income of foreign branches cannot be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee s own case for assessment years 2000 01 and 2003 04, the issue was decided in favour of the assessee in subsequent assessment years. It is further relevant to observed, the decisions of the Hon'ble High Court in assessee s own case since pertained to assessment years 2000 01 and 2003 04, the Hon'ble High Court never had any occasion to examine the taxability of income in foreign branches in India keeping in view the provisions of section 90(3) r/w Government notification no.S.O. 2123(E) dated 28th August 2008. In the aforesaid circumstances, we are unable to accept the submission of the learned Authorised Representative that the issue is covered by earlier decisions of the Tribunal. In our view, the issue has to be decided keeping in view the provision of section 90(3) read with Central Govt. notification no S.O. 2123(E) dated 28th August 2008 as well as the decisions cited by learned Departmental Representative. However, it needs to be observed, the submissions made by the assessee before us against the applicability of the decisions of Essar Oil Ltd. (supra) and Bank of Baroda Ltd. (supra) appears to have not been made before the Departmental Authorities, may be for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ress International Banking Corporation v/s CIT, [2002] 125 taxman 488. 28. The learned Departmental Representative relied upon the observations of the learned Commissioner (Appeals). 29. We have considered rival submissions and perused materials on record. As could be seen, identical issue came up for consideration before the Tribunal in assessee s own case for assessment year 2011 12, in ITA no.4357 and 4491/Mum./2016, dated 25th May 2018. The Tribunal after considering the submissions of the parties restored the issue to the Assessing Officer for fresh adjudication observing as under: 38. We have considered rival submissions and perused materials on record. Before we proceed to decide the issue, it is necessary to understand the exact nature of broken period interest. As mandated by the Reserve Bank of India, every bank has to maintain Statutory Liquidity Ratio. For that purpose banks invest in Government securities. Therefore, depending on the requirement a bank purchases and sells Government securities. Generally, interest in Government securities is payable on half yearly basis. When Government securities are traded the purchaser has to pay to the seller not only t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. ITA no.5170/MuM./2016 Revenue s Appeal A.Y. 2012 13 33. The only issue raised in the present appeal by the Revenue is whether the provisions of section 115JB of the Act is applicable to the assessee. 34. At the outset, the learned Counsel for the assessee submitted that the issue is covered in favour of the assessee by the decision of the Tribunal in assessee s own case for assessment year 2011 12. 35. The learned Departmental Representative, though, agreed with the aforesaid submissions of the assessee, however, he relied upon the observation of the Assessing Officer. 36. We have considered rival submissions and perused materials on record. As could be seen, while deciding identical issue in assessee s own case for assessment year 2011 12, in ITA no.4357 and 4491/ Mum./2016, dated 25th May 2018, the Tribunal decided the issue in favour of the assessee holding as under: 51. We have considered rival submissions and perused materials on record. As could be seen, learned Commissioner (Appeals) relying upon certain judicial precedents held that as per the provisions of section 115JB of the Act applicable to the relevant assessment year, it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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