Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 95 - AT - Income TaxEntitled to deduction u/s 80I and 80IA - allocating any expenditure to the gas unit to steam unit - HELD THAT:- As relying on own case M/S NTPC LTD. [2018 (5) TMI 796 - ITAT DELHI] arguments addressed by the ld. DR for the Revenue are misconceived and as such the assessee is entitled to deduction u/s 80I and 80IA without allocating any expenditure to the gas unit to steam unit. CIT(A) has duly thrashed this issue in the light of the findings returned by Hon’ble Delhi High Court in assessee's own case for AY 2000- 01 [2013 (1) TMI 219 - DELHI HIGH COURT] wherein Hon’ble High Court has held that both the gas turbine or steam turbine generated electricity independently and inspection report dated 02.09.2004 does not indicate any new facts. So, we are of the considered view that the ld. CIT (A) has rightly decided the issue in favour of the assessee. Deduction of expenditure u/s 37 - expenses incurred on the assets not owned by it but belongs to various State Governments like irrigation, PWD, Electricity Board and in a few cases Central Government like Indian Railways - HELD THAT:- No illegality or infirmity in the findings returned by the ld. CIT (A) which are based upon the decision of L.H. Sugar Factory & Oil Mills (P) Ltd. vs. CIT [1980 (8) TMI 1 - SUPREME COURT] and Airport Authority of India vs. CIT [2011 (12) TMI 114 - DELHI HIGH COURT] and Bikaner Gypsusms Ltd. vs. CIT [1990 (10) TMI 2 - SUPREME COURT] as held that when the roads were constructed around the factory with an amount incurred by the assessee existing on the land owned by Government of UP, the assessee did not acquire any asset of an enduring nature. Assessee is having existing right to carry out the business, any expenditure made by it for smooth running of the business would not lead to acquisition of capital assets. Thus the expenditure incurred by the assessee on construction of road, water supply, rail connectivity and other infrastructure activities on the assets not owned by it but owned by various Government Departments are revenue expenditure. - Decided in favour of assessee. Disallowance of pre-commissioning expenses - HELD THAT:- As the addition is made by the AO following the assessment order of A Y 2004-05, therefore respectfully following the decision of Ld. CIT-A this ground of appeal is decided in favour of the appellant and the AO is directed to allow the netting off precommissioning sales against pre-commissioning expenses as claimed by the assessee and delete the addition made as income from other sources. The appeal is allowed in this ground - Decided against the Revenue. Disallowance u/s 14A - Exemption u/s 10 - Assessee earned an income form tax free interest bonds @ 8.5% and dividend income - HELD THAT:- Perusal of the order passed by the coordinate Bench of the Tribunal in AY 2004-05 [2018 (5) TMI 796 - ITAT DELHI] apparently goes to prove that identical issue as to disallowance of the expenditure made by the assessee to earn the exempt income from investment in tax free bonds has been decided in favour of the assessee wherein AO has disallowed 2.5% of the administrative expenses for earning income from tax free bonds and the disallowance was ordered to be deleted. As to making disallowance of ₹ 123.09 crores by the AO and reduced the same to ₹ 82.67 crores by the ld. CIT (A) in the light of the facts inter alia that AO has not recorded any dissatisfaction as to the working out made by the AO; that the AO has failed to establish any nexus between the tax free income and expenditure incurred; that the assessee was having huge sufficient own funds of ₹ 41776 crores as against the investment of ₹ 16469 crores and the fact that the entire investment was made long back under one time settlement, disallowance made by the AO as well as CIT (A) is not sustainable. There is not an iota of material on file to prove the fact that the assessee has incurred any expenditure by way of administrative expenses for earning the exempt income, which makes the estimated disallowance made by the AO as well as ld. CIT (A) not sustainable. Staff is appointed to manage the surplus funds as well as investment made by the assessee and at the same time, they have also brought on record by way of financials that no expenditure has been incurred in relation to earning such income. Accounts of the assessee are audited by auditor as well as Controller & Auditor General (CAG) and when the AO has failed to prove on record material to show that such and such expenditure has been incurred by the assessee to earn exempt income, in the face of the fact that all the investments are old investments that too in tax free bonds and loan to the Government out of its own huge surplus funds, no disallowance can be made - Decided in favour of assessee.
|