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2022 (7) TMI 389 - AT - Income TaxDisallowance of subscription paid to Tata Sons Ltd under the Brand Equity and Business Promotion Agreement - AO passed u/s 143(3) of the Act disallowed the aforesaid amount treating the same as non-business expenditure - HELD THAT:- DR could not show any reason to deviate from the aforesaid order and no change in facts and law was alleged in the relevant assessment year. The issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee by the decisions of the coordinate bench of the Tribunal in preceding assessment years. Thus, respectfully following the order passed by the coordinate bench of Tribunal in assessee’s own case [2021 (2) TMI 851 - ITAT MUMBAI] we direct the Assessing Officer to delete the disallowance made on account of subscription paid to Tata Sons Ltd. As a result, ground no. 2 raised in assessee’s appeal is allowed. Allocation of expenses towards earning dividend income and disallowance u/s 14A - HELD THAT:- From perusal of orders passed in preceding and subsequent assessment years, forming part of the additional case law paper book, we find that suo moto disallowance offered by the assessee, by taking into consideration 5% of salary of CFO, Deputy CFO and Head Treasury, 5% of salary of staff as well as 10% overheads thereon, has been accepted by the Revenue. However, only in the year under consideration, the AO, while giving effect to the directions of learned CIT(A), did not consider the suo moto disallowance offered by the assessee. As the assessee has also in-principle agreed to the disallowance by invocation of provisions of section 14A of the Act and is also agreeable to methodology adopted by the Assessing Officer for assessment year 2006–07 and methodology upheld by the DRP for assessment year 2007–08, with a view to avoid litigation. In its appeal for assessment year 2005–06, which was heard along with present appeal, assessee has accepted the disallowance made under section 14A of the Act, pursuant to learned CIT(A)’s directions. In view of the fact that that there is no change in facts insofar as disallowance under section 14A is concerned, in preceding and subsequent assessment years and as the present appeal pertains to around 17 years old assessment year, therefore, in the larger interest of justice, we deem it appropriate to direct the Assessing Officer to apply the similar methodology as adopted and accepted in other assessment years and compute the disallowance under section 14A. Disallowance of claim of deduction u/s 80 IB of the Act in respect of fertiliser unit at Haldia - HELD THAT:- As relying on own case [2021 (2) TMI 851 - ITAT MUMBAI] we direct the Assessing Officer to allow the deduction claimed by the assessee under section 80 IB of the Act. As a result, ground no. 6 raised in assessee’s appeal is allowed. Denial of deduction in respect of amortisation of lease rental deposits - HELD THAT:- As decided in own case [2019 (4) TMI 2064 - ITAT MUMBAI] the amount paid as consideration for obtaining the lease is for the acquisition of a capital asset which enables the lessee to carry on its business. It is a capital expenditure. It cannot be split up into the number of years of the duration of the lease in order to claim a proportionate fraction as revenue expenditure each year. The acquisition is of exclusive right or privilege over the lease, it a strong point that the consideration paid is on capital account. Receipts and payments in connection with acquiring or disposing of lease are usually on capital account. Nature of receipts - Sales Tax Incentive money being the amount retained by the company in accordance with section 41 of the West Bengal Sales Tax Act, 1944 (read with The West Bengal Incentive Scheme 1999) - HELD THAT:- Sales tax incentive money being the amount received by the company in accordance with section 41 of the West Bengal Sales Tax Act, 1944 is capital receipt, which is not chargeable to tax under the Act. As a result, additional ground raised by the assessee is allowed. Computation of MAT u/s 115JB for disallowance u/s 14A - HELD THAT:- As per the decision of Special Bench of Tribunal in ACIT vs Vireet Investment (P) Ltd [2017 (6) TMI 1124 - ITAT DELHI] while computing book profit under section 115JB of the Act, disallowance made u/s 14A of the Act cannot be added. Accordingly, ground no.3, raised in assessee’s appeal is allowed.
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