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2018 (7) TMI 2266 - AT - Income TaxDisallowance of interest and expenses u/s. 14A r.w.r 8D - HELD THAT:- We find that the CIT-A held that the assessee has shown capital reserve fund more than the investments made. Therefore, it is to be presumed that such investment made out of its own fund and, the disallowance made under Rule 8D(2)(ii) of the IT Rules, 1962 is not maintainable and we confirm the impugned order of the CIT-A. Disallowance under Rule 8D(2)(iii) - make disallowance in respect of investments that had yielded exempt income by placing reliance on the order of the Hon’ble High Court of Calcutta in the case of REI Agro Ltd [2013 (12) TMI 1517 - CALCUTTA HIGH COURT] - Decided against revenue. Disallowance of 25% of air craft flying right charges - HELD THAT:- As decided in own case [2016 (10) TMI 323 - ITAT KOLKATA] all costs and expenses associated with the operation of the aircraft. The assessee was not required to pay anything over and above the sum of Rs.340 lacs agreed between the parties irrespective of the use of the aircraft. The aircraft flying rights were taken considering the business needs of the assessee and the aircraft was used by very senior officials of the company for the purposes of business and furtherance thereof - Decided against revenue. Allowability of retainer ship fees paid - HELD THAT:- As relying on own case [2016 (10) TMI 323 - ITAT KOLKATA] allowed the claim of assessee regarding retainership fees paid to M/s. Sree Bala P.Ltd Disallowance of 25% towards guest house expenses - HELD THAT:- We find that the issue in hand is covered by the order [2016 (10) TMI 323 - ITAT KOLKATA] in assessee’s own case for the A.Ys 2006-07 & 2008-09 allowed claim of assessee. Allowability of licence fees paid to M/s. RPG Enterprises Ltd. - HELD THAT:- We find that the issue in hand is covered by the order [2016 (10) TMI 323 - ITAT KOLKATA] in assessee’s own case for the A.Ys 2006-07 & 2008-09 allowed claim of assessee. Allowability of unrealized loss on foreign exchange fluctuation - HELD THAT:- It is noticed that the assessee claimed loss of Rs.46.58 crores on account of foreign exchange fluctuation. We noticed that the assessee has shown gain in its profit & loss account on account of foreign exchange fluctuation for the A.Y 2010-11 and the AO assessed the same as income on account of forward contract gain, in the same way, in our opinion, the AO should have taken the loss due to unrealized forward contract for the A.Y under consideration as real loss - CIT-A held the same as real loss and the assessee is entitled to claim as deduction. We find that similar issue on identical facts and circumstances, this Tribunal has decided the issue by placing reliance on the decision of Woodward Governor India Pvt. Ltd [2007 (4) TMI 118 - DELHI HIGH COURT] wherein held that loss recorded due to foreign exchange fluctuation is an allowable deduction - Decided against revenue. Disallowance on account of book profit u/s.115JB on disallowance u/s 14A - HELD THAT:- Co-ordinate Bench, ITAT, Kolkata in the case of TMT Viniyogan Pvt. Ltd [2017 (12) TMI 1841 - ITAT KOLKATA] wherein the Tribunal held that no disallowance could be made u/s. 14A while computing the book profit u/s. 115JB of the Act and remanded the matter to the file of AO for computing the disallowance under clause (f) to section 115JB of the Act by placing reliance on the decision of the Hon’ble High Court of Calcutta in the case of CIT Vs. Jayshree Tea Industries Ltd [2014 (11) TMI 1169 - CALCUTTA HIGH COURT] we remand the matter to the AO and to work the disallowance in terms of clause (f) to Explanation-1 of Section 115JB of the Act for the purpose of book profit. Disallowance made on account of misc. expenses - HELD THAT:- We find that the assessee claimed the misc. expenses and without there being any evidence to that effect the AO made the disallowance. CIT-A considering the submissions of assessee in respect no inference or adverse remark whatsoever was made by the statutory auditor in the tax audit deleted the same. But, however, taking into consideration the facts and circumstances of the case, we find that the AO was justified in disallowing the same at 25% of claimed expenses. Therefore, we reverse the impugned order of the CIT-A and restore the order of AO on this issue. Disallowance on account of Puja & Temple expenses - CIT-A deleted the addition - HELD THAT:- We find that the CIT-A placed his reliance on various case laws of Hon’ble High Courts and CBDT Instruction. The Hon’ble High Courts allowed such expenses treating the same as welfare measure for employees. Thus, the CIT-A was right in directing the AO to delete the same. We find no infirmity in the impugned order of the CIT-A and it is justified.
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