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2022 (3) TMI 1558 - AT - Income TaxDisallowances u/s.14A r.w.r 8D - suo-motto disallowance of expenditure relatable to exempt income - HELD THAT:- An identical issue has been considered by Tribunal in assessee’s own case for the assessment year 2015-16 [2021 (9) TMI 1070 - ITAT CHENNAI] directed the AO to restrict disallowances u/s.14A of the Act, to the extent of exempt income earned for the impugned assessment year. Thus we direct the AO to restrict disallowance u/s.14A to the extent of exempt income earned for the impugned assessment year. Nature of subsidy Receipt - Depreciation on capital subsidy - HELD THAT:- As decided in assessee own case [2021 (9) TMI 1070 - ITAT CHENNAI] subsidiary received from SIPCOT is capital receipt not liable for tax. Thus after considering nature of subsidy has allowed claim of the assessee by observing that for earlier years, the CIT(A) has allowed claim of the assessee and the AO has accepted decision of the CIT(A) and deleted additions, while passing order giving effect to the order of the CIT(A). Therefore, consistent with the view taken by the coordinate Bench, we direct the AO to delete addition made towards disallowance of depreciation on capital subsidy received from SIPCOT. Disallowance u/s.43B(c) - performance incentive paid to employees - HELD THAT:- As in assessee’s own case for assessment year 2015-16 [2021 (9) TMI 1070 - ITAT CHENNAI] under identical circumstances, the Tribunal has held that payment made to an employee which is in the nature of bonus or commission for services rendered is covered u/s. 36(1)(ii) of the Act, and thus, if such payment is not made on or before due date of filing of return of income u/s.139(1) of the Act, then same cannot be allowed as deduction, as per section 43B(c) - we are inclined to uphold the order of the AO as well as the directions of ld.DRP and reject ground taken by the assessee. Fresh claim made by the assessee - Nature of receipts - VAT incentive received from Government of Tamil Nadu - Assessee has treated above incentive as revenue receipt both for its books of account and its tax returns. However, during the course of assessment proceedings, the assessee has raised a fresh claim to treat incentive as capital receipts not chargeable to tax - HELD THAT:- we find that the Tribunal had considered an identical issue for assessment year 2015-16 [2021 (9) TMI 1070 - ITAT CHENNAI] where the issue has been remanded back to the file of AO to consider the issue denovo on merits in accordance with law, has set aside issue to the file of AO. Disallowance of investment allowance u/s.32AC - amount invested before specified period - HELD THAT:- In order to eligible for benefit of investment allowance u/s.32AC(1) of the Act, the assessee must satisfy two conditions as per which new asset should be acquired and installed between 01.04.2013 and 31.03.2015. Unless the assessee satisfies two conditions, it cannot claim benefit of additional investment allowance. In this case, there is no dispute with regard to fact that the assessee has acquired plant and machinery worth of Rs.1041.32 crores prior to 01.04.2013 and kept in capital work in progress. Therefore, to the extent of amount invested before specified period, the assessee cannot claim investment allowance u/s.32AC(1) of the Income Tax Act, 1961. We are of the considered view that there is no error in the reasons given by the AO as well as learned DRP to sustain additions made towards disallowance of investment allowance @ 15% u/s.32AC on plant and machinery acquired and kept in capital work in progress before 01.04.2013, beyond the specified period as per the provisions of section 32AC - Hence, we are inclined to uphold findings of the learned DRP and reject ground taken by the assessee. TP adjustment made towards brand development services - HELD THAT:- As relying in assessee’s own case for the assessment year 2015-16 [2021 (9) TMI 1070 - ITAT CHENNAI] TPO as well as learned DRP were erred in making transfer pricing adjustments towards brand services by adopting Spearman’s Rank Correlation method and concluded that there is positive accretion between brand value and market capitalization of HMC Korea and hence, directed the AO/TPO to delete transfer pricing adjustment made towards brand development services. Therefore, consistent with the view taken by the coordinate Bench, we direct the AO to delete addition made towards brand fee adjustment. Nature of receipt - amount received from Focus Market Scheme - Whether to be treated as capital in nature and exclude from total income? - HELD THAT:- As in assessee’s own case for the assessment year 2015-16 [2021 (9) TMI 1070 - ITAT CHENNAI] held that duty credit scrips received from Govt. of India under Focus Market Scheme is revenue in nature. Deduction towards education and secondary education cess u/s.37(1) - HELD THAT:- We find that the Tribunal had considered an identical issue for assessment year 2015-16 [2021 (9) TMI 1070 - ITAT CHENNAI] where the issue has been remanded back to the file of AO to consider the issue denovo on merits in accordance with law, has set aside issue to the file of Assessing Officer. Appeal filed by the assessee is treated as partly allowed for statistical purposes.
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