Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (3) TMI 1176 - AT - Income TaxDisallowance under section 14 A read with rule 8D - Held that:- Respectfully following the order of the tribunal for the earlier years held that as assessee’s claim of the expenditure on earning of exempt income is not remitted by the revenue. They applied the provisions of section 14 A read with rule 8D mechanically without regulating expressly the claim of Neil expenditure on the exempt income. AO needs to record his satisfAction on incorrectness of the assessee’s claim in the return. Assessing officer has not recorded the same in this case. Therefore, considering the above as well as following the rule of consistency, we are of the opinion that this issue should also be remanded to the file of the assessing officer for fresh adjudication. Addition made on account of AIR information - Held that:- Respectfully following the order of the tribunal for the earlier years the orders of the revenue on the issue of reconciliation of AIR data qua the books of accounts of the assessee stop refining his recorded by the assessing officer that no exhaustive exercise of reconsideration is undertaken by him before making the said addition. Assessee is certain. The consideration, if one more opportunity is granted considering the same, we read remand this ground to the file of the assessing officer for fresh adjudication of the issue after granting a reasonable opportunity of being heard to the assessee. Depreciation on uninterrupted power supply(UPS) - Held that:- Tribunal had decided the issue in favour of the assessee, while adjudicating the appeals for the earlier years as following the principle of consistency, the depreciation at the rate of 80% should be allowed on UPS instead of 15% granted by the assessing officer. Accordingly ground raised by the revenue are dismissed. Marked to market losses (MTM) allowance - Held that:- Identical issue had arisen in the earlier years and the tribunal had decided the issue in favour of the assessee held that the MTM loss is liable to be allowed. Disallowance made with regard to employee stock option scheme(ESOP) - Held that:- Offer was made by the parent company to the employees of the assessee for ESOP and the assessee had made payment for the discount allowed by the parent company. As far as the assessee in the present case which is an affiliate of the foreign parent company is concerned, the shares were in fact acquired by the assessee from the parent company and there was an actual outflow of cash from the assessee to the foreign parent company. The price at which shares were issued to the employees was paid by the employee to the Assessee who in turn paid it to the parent company. The difference between the fair market value of the shares of the price at which shares were issued to the employees was met by the Assessee. This factual position is not disputed at any stage by the revenue. In such circumstances, we do not see any basis on which it could be said that the expenditure in question was a capital expenditure of the foreign parent company. As far as the assessee is concerned, the difference between the fair market value of the shares of the parent company and the price at which those shares were issued to its employees in India was paid to the employee and was an employee cost which is a revenue expenditure incurred for the purpose of the business of the company and had to be allowed as deduction. There is no reason why this expenditure should not be considered as expenditure wholly and exclusively incurred for the purpose of business of the assessee. - Decided against revenue
|