Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (3) TMI 1069 - ITAT MUMBAIDisallowance u/s 14A r.w.r 8D - Held that:- The facts are proved by the increase in reserve and surplus over the years which were at ₹ 414 crores as on 31.3.2008 against the investment in subsidiaries which stood ₹ 319.43 crores as on 31.3.2008. We also note that the assessee had taken loans from Financial Institutions amounting to ₹ 722.24 crores, out of which the working capital loan ₹ 258.79 crores and remaining pertains to term loans for the specific purposes. The AO took the entire interest debited to the profit and loss account amounting to ₹ 94.35 crores and worked out the disallowance accordingly. In our opinion, the ld CIT(A) had rightly deleted the disallowance on account of interest under rule 8D(2)(ii) of the Rules and rightly upheld the disallowance to the tune of ₹ 0.5% of the value of investment which comes to ₹ 1,35,14,428/- being 0.5 % of ₹ 270.28 crores by following the decisions of the earlier years in the case of the assessee wherein the similar issue came up for consideration before the Tribunal and decided in favour of the assessee. Addition u/s 36(1)(iii) - proportionate interest expenditure pertaining to interest free loans and advances given by the assessee to subsidiaries companies out of interest bearing funds raised by the assessee - CIT(A) deleted addition - Held that:- The assessee's business expediency is proved beyond doubt that the entire interest free advances were given to the subsidiary company out of commercial expediency. In the case of Reliance Utilities and Power Ltd (2009 (1) TMI 4 - BOMBAY HIGH COURT ), The Hon'ble Court has held that the assessee has its own funds and simultaneously has borrowed interest bearing funds the presumption is that the advance of money is out of own funds and not out of interest bearing funds. We, therefore, respectfully following the ratio laid down in the above decisions supra confirm the order of ld. CIT(A) on this issue. - Decided in favour of the assessee. Loss u/s 43(5)(d) on account of M to M losses - CIT(A) deleted the loss - Held that:- In view of the facts of the assessee and various judicial decisions of the coordinate benches following the decision of apex court in the case of Woolward Governor India Pvt. Ltd (2009 (4) TMI 4 - SUPREME COURT ) and special bench decision in the case of Bank of Bahrain and Kuwait (2010 (8) TMI 578 - ITAT, MUMBAI ), we are of the considered view that case of the assessee is fully covered by the decisions of the coordinate benches and we therefore respectfully following the same allow the appeal of the assessee on the issue of MTM losses by deleting the disallowance - Decided in favour of the assessee. Disallowance of repairs and maintenance - Held that:- Expenses could not be disallowed merely on the ground that they are related to the transactions pertaining to earlier years unless and until the AO is fully satisfied after proper investigation about the crystallization of the liability and also the disallowance cannot be made merely on the ground that account maintained in the system of accounting and relates to the transactions of the previous year. In our opinion the true profits and loss of the assessee could only be determined if the expenses are allowed. Moreover, if these expenses are not allowed in this year, they are liable to be set off from the profit of the year ended 31.3.2006 related to the assessment year 2006-07. We, therefore, uphold the order of the ld. CIT(A) by dismissing the appeal of the revenue on this ground.- Decided in favour of the assessee. Addition on account of repair and maintenance of furniture - Held that:- The bill dated 25.10.2005 is in respect of repairs and maintenance of the furniture, POP, painting etc were settled and finalised during the year. We further observed from the said records that the said bill could not be accounted for in the year to which it pertained as it was received late and at the year end it could not be possible to estimate the liability with reasonable degree of accurancy. The bill was received in the subsequent year and the CIT(A) has recorded the finding of facts that the crystallisation had taken placed during the year and pertained to the current year and AO had wrongly disallowed the same. - Decided in favour of the assessee.
|