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2022 (6) TMI 396 - AT - Income TaxDisallowance u/s 14A read with Rule 8D - sufficiency of own funds - HELD THAT:- Respectfully following the above finding in own case of the assessee [2021 (10) TMI 1330 - ITAT AHMEDABAD] we hereby hold that there would be no disallowances of interest expenses u/s 14A read with rule 8D of Income Tax Rule as the assessee was having sufficient interest free own fund against the investment - However with respect to disallowances of administrative expenses under rule 8D(2)(iii) of Income Tax Rules, we inclined to provide one more opportunity to the assessee for to demonstrate the basis of suo moto disallowance. Therefore, the issue to the extent of disallowances of administrative expenses is set aside to the file of the AO for fresh adjudication as per the provision of law. Thus the ground of Revenue’s appeal is hereby dismissed whereas ground of appeal of the assessee is allowed for statistical purposes. Addition of commission income from the bank guarantee furnished to the customers - HELD THAT:- It is important to note that the assessee is paying the taxes at the maximum marginal rate and there is no allegation by the Revenue that the income of the assessee by changing the accounting policy has not been offered to tax - the income of 1 year has been postponed to the another year in the manner and for the reasons as discussed above. In view of the above and after considering the facts in totality, we set aside the finding of the ld. CIT-A and direct the AO to delete the addition made by the AO. Hence, the ground of appeal of the assessee is allowed. Addition being the amount of interest on the sticky advances under rule 6EA read with section 43D of the Act - HELD THAT:- We hold that there cannot be any addition to the total income of the assessee by way of interest with respect to the loans and advances which were overdue for 3 months. Thus we set aside the finding of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed. Disallowance on account of lease operating expenses - HELD THAT:- Admittedly, the accounting standard issued by the ICAI are mandatory to be followed by the assessee under the Companies Act. But the question arises, such accounting standards should also be followed while working out the income under the provisions of the income tax Act. So far, the Income Tax Act has not notified the accounting standard 19 issued by the ICAI, though mandatory for the assessee to follow while preparing its books of accounts, but this is not the same under the Income Tax Act. Hence the ground of appeal of the assessee is dismissed. Deduction on account of ESOP - HELD THAT:- The assessee against the order of the CIT(A) for the A.Y. 2014-15 was in appeal before this tribunal [2021 (10) TMI 1330 - ITAT AHMEDABAD] where the issue was set aside to the file of the AO for fresh adjudication. Accordingly the learned AR for the assessee before us contended that the issue for the year under consideration should also be set aside to the file of the AO fresh adjudication as per law - after hearing both the parties we hereby set aside the issue to the file of the AO for fresh adjudication as per the provision of the law. Hence the ground of the assessee is hereby allowed for statistical purposes. Deduction on account of education, secondary and higher education cess - HELD THAT:- Hon’ble Supreme Court in the case of National Thermal Power Co. Limited. [1996 (12) TMI 7 - SUPREME COURT] - Since the claim of the assessee is purely legal claim and entire facts are available on record. Thus it is not justified in not admitting the purely legal ground raised by the assessee for the first time. As the assessee has not claimed deduction of education cess and secondary higher education cess before the lower authorities, they have not got opportunity to examine the same as per the provisions of Act, thus In the interest of justice, these grounds are restored back to the file of the AO with a direction to examine assessee's eligibility to claim of deduction of the items raised in the additional grounds of appeal de novo/ afresh after providing an opportunity of being heard to the assessee. Thus the additional grounds of appeal raised by the assessee are allowed for statistical purposes. Interest expenses incurred in respect of capital work in progress - whether any interest-bearing fund has been utilized in such work in progress? - HELD THAT:- As decided in own case [2021 (10) TMI 1330 - ITAT AHMEDABAD] admittedly own fund of the assessee exceeds the amount of capital work-in-progress. Therefore, a presumption can be drawn that the own fund of the assessee was utilised in such capital work in progress. Accordingly, there cannot be any disallowance on account of interest expenses. Hence the ground of appeal of the Revenue is dismissed.
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