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2016 (1) TMI 125 - AT - Income TaxDisallowance being amortization of lease rent - treating the same as of capital nature by CIT(A) - Held that:- Similar issue in assessee's own case has been decided in respect of Asst. Years 2005-06 to 2007-08 wherein decided the issue in favour of assessee considering the decision of this Court in the case of Sun Pharmaceutical Industries Limited (2009 (3) TMI 587 - Gujarat High Court ) as well as decision of the Hon'ble Supreme Court in the case of Madras Auto Services Pvt. Ltd. (1998 (8) TMI 1 - SUPREME Court), we are of the opinion that the learned Tribunal has committed an error in distinguishing the aforesaid decisions and not applying the same to the facts of the case on hand. Considering the aforesaid two decisions, it is to be held that the aforesaid lease rent was deductible as revenue expenditure and the learned Tribunal has erred in holding that amortization of lease rent paid for the land is capital expenditure. - Decided in favour of assessee Disallowance u/s 14A - Held that:- As the assessee seems to be having sufficient interest free funds out of which investments in funds giving tax free income would have been made and also there is no specific observations by the Assessing Officer that during the previous year any such funds bearing interest have been diverted/applied to investments, income of which is not forming part of total income and, therefore, there seems to be no possibility of application of Rule 8D in relation to interest expenditure. As regards apportionment of administrative and establishment expenses debited to the profit and loss account towards exempt income earned during the year on one hand, assessee which is a limited company has provided audited financial statement along with audit report u/s 44AB wherein no specific disallowance u/s 14A is appearing and on the other hand, the Assessing Officer has not gone specifically through the books of account so as to bring any fact that any such expenditure has been incurred for earning exempt income. Therefore, Assessing Officer was not correct in applying section 14A read with Rule 8D in the case of the assessee. However, looking to past history, previous assessments made and the decision of co-ordinate Bench, as well as accepting the fact that one cannot ignore the possibility of incurring some expenditure for earning exempt income which have been debited to the profit and loss account and to cover up such possibility we are of the view that a lump sum disallowance of ₹ 1,00,000/- will meet the ends of justice.- Decided in favour of assessee in part Reduction in the deduction claimed by assessee under section 80IA - AO has estimated the rate of ₹ 2.23 per unit for units of electricity sold and arrived at a conclusion that assessee earned has not earned any profit rather incurred losses - Held that:- We find that the co-ordinate Bench in assessee's own case for Asst. Years 2005-06 to 2007-08 has decided similar issue by observing deduction allowable to the assessee u/s 80IA in respect of captive consumption of power, the rates fixed by Electricity Board i.e. GEB in the present case, has to be applied and not the price fixed by the legislative mandate. He has also noted that in the present case, the assessee is prevented by legislative mandate from selling power to any person other than GEB and the rates fixed by GEB was ₹ 1.86 per unit only but the GEB is asking the assessee to pay at ₹ 4.55 per unit and hence, he has directed the AO to allow deduction u/s 80IA as claimed, being the market rate of ₹ 4.55 per unit of power. No contrary decision was brought to our notice by the ld. DR and hence, we do not find any reason to interfere in the order of ld. CIT(A) on this issue which is in line with various Tribunal decisions. This issue is decided in favour of the assessee MAT - Computation of book profit under section 115JB - claim for provision for doubtful debt and claim of provision of diminution in value of investment and provision for loss in the derivative were added back to the book profit - Held that:- The issue has been decided by the co-ordinate Bench in assessee's own case for Asst. Year 2004-05 wherein it was fairly conceded by the ld. AR that this issue has to be decided against the assessee as per clause (i) of Explanation 1 to section 115JB and hence, this issue is decided against the assessee
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