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2015 (1) TMI 1489 - AT - Income TaxAdmission of additional ground raised - disallowing credit for corporate taxes paid by MTPL Singapore, to the extent of dividends received by appellant from MTPL in India - As pointed out that in the present case factual foundation has not been laid down before the AO and relevant facts are not on record, thus this ground should not be admitted - HELD THAT:- It is well settled law that a legal claim can be advanced at any stage of proceeding - we are not inclined to accept the submission of the CIT(DR) to reject the ground taken by assessee on the ground of laches. There is no quarrel with the submissions of Ld. CIT(DR) that if the relevant facts are not there on record then the additional ground should not be admitted - if the basic facts are there on record and those facts have only to be supplemented by obtaining some further information in that respect then in order to determine the correct tax liability of assessee and to advance the cause of substantial justice, the additional ground raised by assessee should be admitted. In the present case the basic facts necessary for adjudication of additional ground are already on record and at best the AO is to verify those facts and apply the correct provisions of DTAA to the facts. We, therefore, admit the ground raised by the assessee and restore the matter to the file of the AO for allowing the credit of taxes paid in Singapore on the dividend income as per the provisions of DTAA in accordance with law. Additional ground raised by the assessee is admitted and allowed for statistical purposes. Disallowance u/s 14A r.w.r. 8D - Necessity of recording AO's satisfaction regarding expenditure being incurred for the earning of exempt income on reasonable basis - HELD THAT:- AO as well as Ld. CIT(A), both have confirmed the disallowance applying Rule 8D. Therefore, the order of Ld. CIT(A) cannot be sustained. The issue, therefore, is restored back to the file of the AO for deciding the issue denovo in accordance with the decision in the case of Maxopp Investment Ltd. [2011 (11) TMI 267 - DELHI HIGH COURT] and also after taking into consideration the decision in its own case for asstt. Year 1993-94. Addition on account of non crediting of sum received as DEPB credit - HELD THAT:- AO in the body of order talks of addition of Rs. 2,73,56,574/- whereas in computation makes addition of Rs. 2,63,38,000/-. Both these additions have different import. Therefore, he needs to clarify the correct amount which he intends to add. We further notice that assessee has returned 3% profit in the year in which the DEPB is sold/auctioned and 97% of the profit is transferred to NINL as per agreement. This was rightly done in view of overriding title in favour of NINL over proceeds of sale/auction of DEPB. Nature of expenses - expenditure towards annual fees of license issued by Central Electricity Regulatory Commission (CERC) for the period 1.4.2005 to 31.3. 2006 - AO treated this expenditure as capital expenditure on the ground that the same related to activity which was ready to become operational and pertained to an independent activity - CIT(A) deleted this disallowance taking into consideration the fact that the payment was towards annual license fee for trading in electricity - HELD THAT:- The facts as noted by Ld. CIT(A) have not been controverted by the department. It is not disputed that the activity carried out by the assessee resulted into generation and sale of electricity therefore the licence fee paid for trading in electricity was in revenue’s field. We, therefore, confirm the order of the Ld. CIT(A) on this issue. Penalty u/s 273(2)(a) - CIT(A) noted that inadvertently the assessee company did not claim it as deduction in the computation of total income for the asstt. year under consideration - HELD THAT:- The department has not controverted the facts as recorded by the Ld. CIT(A) . There can be no quarrel with the observation of Ld. CIT(A) that while the payment of penalty, if debited to the profit and loss account is to be disallowed and added back to the computation of total income, the refund thereof, if credited to the profit and loss account, has to be allowed as a deduction in the computation. We, therefore, confirm the order of Ld. CIT(A).
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