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2017 (10) TMI 1014 - AT - Income TaxAddition u/s 14A r.w.r. 8D - Held that:- facts pertaining to the instant issue are identical as they were in preceding assessment year 2008-09 i.e. since application of Rule 8D of the Income Tax Rules. The assessee then takes us to paper book pages 77 to 98 containing a co-ordinate bench order dated 24.01.2017 for preceding assessment year deleting proportionate interest disallowance on the ground that assessee’s interest free funds exceed its tax free investments amounting to ₹ 651crores. It then confirms latter limb of administrative disallowance amounting to ₹ 63.84lacs. We take cue therefrom to notice that assessee’s tax free investments in the impugned assessment year read a figure of ₹ 684crores as against interest free funds in the nature of share capital and reserves amounting to ₹ 10,214crores. We therefore find no reason to concur with the above proportionate interest disallowance of ₹ 37,11,56,870/-. We now proceed to deal with administrative expenditure disallowance of ₹ 3,33,94,517/-. It is no more an issue that the above co-ordinate bench had upheld the same in preceding assessment year. We therefore adopt consistency to affirm this latter disallowance of administrative expenditure. This first substantive ground is taken as partly accepted. Adding speculative gains amortized as per RBI guidelines as well as in disallowing such related gain as taxed in preceding assessment years - Held that:- We draw support from above co-ordinate bench findings to delete addition of speculative gains of ₹ 2,64,27,796/- amortized as per RBI guidelines. The assessee at this stage submits that it no more wishes to press for its latter grievance qua addition of ₹ 3,21,05,491/- as an instance of double addition since assessed in earlier assessment years because of the fact that it has not been taxed till date. We appreciate this fair stand to confirm the above latter addition of ₹ 3.21crores. This second substantive ground is therefore partly accepted. Claiming employees’ stock option scheme “ESOP” as per SEBI guidelines, 1999 as revenue expenditure - Held that:- It is not in dispute that assessee’s relevant details pertaining to the impugned ESOP scheme already form part of the case records as indicated in preceding paragraph. It has further come on record that the whether or not such an ESOP expenditure is allowable u/s.37 of the Act or not was of course a debatable issue ultimately settled as per above special bench decision. We therefore find merit in assessee’s additional ground in principle. The same is therefore admitted. We accordingly direct the Assessing Officer to carry out necessary factual verification as per law after affording adequate opportunity of hearing to assessee. Prior period expenditure disallowance - Held that:- The Revenue fails to rebut the fact that the assessee has already succeeded on this prior period expenditure disallowance issue in preceding assessment years. We further find that hon’ble jurisdictional high court decision in PCIT vs. Adani Enterprises [2016 (7) TMI 1250 - GUJARAT HIGH COURT ] holds that such a disallowance is not to be invoked in case an assessee is assessed at the same rate in the two assessment years in question. We therefore affirm the CIT(A)’s findings under challenge. The Revenue’s sole substantive ground dismissed.
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