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2020 (11) TMI 345 - HC - Income TaxAdvances to sister concerns without charging any interest for payment of Municipal Taxes - allowable business expenditure - HELD THAT:- It is pertinent to mention here that the aforesaid amount pertains to export transactions to avail export benefits and the assessee had an understanding with Hinduja Relators Pvt. Ltd. in this regard. For improvement of a new building which was being constructed for the assessee under the lease agreement. AO did not comment anything in this regard in the remand report. CIT (Appeals), therefore, held that the aforesaid amount was advanced by the assessee for business purpose as well as commercial expediency. The aforesaid finding of fact has been affirmed by the tribunal. The aforesaid concurrent findings of fact neither suffer from any infirmity nor can be termed as perverse. Therefore, the first substantial question of law is answered against the revenue and in favour of the assessee. Advances to sister concerns for acquiring the land for textile Special Economic Zone (SEZ) - Acquisition/identifying and liaison of a textile Aparel Park - HELD THAT:- Assessee has not let in any evidence to establish the fact that the amount was either advanced for business purpose or for commercial expediency and it was not the case of the assessee itself that the amount was advanced in previous year. The CIT (Appeals) has recorded a finding that the assessee has neither acquired the land nor has set up any SEZ. Therefore, in the fact situation of the case, we deem it appropriate to remit the matter for re consideration to the tribunal afresh. Accordingly, the second substantial question of law is answered. MAT Computation - Disallowance u/s 14A not be added to the Book Profits of the assessee under section 115JB - HELD THAT:- Tribunal by placing reliance on decision of the Supreme Court in APOLLO TYRES [2002 (5) TMI 5 - SUPREME COURT] has held that Assessing Officer while determining book profits under Section 115JB of the Act cannot tamper with the profits as per profit and loss account prepared in accordance with the Companies Act except in the manner provided in Explanation 1 to Section 115JB - As held that the additions made by the Assessing Officer while determining the book profits under Section 115JB of the Act cannot be sustained. Any disallowance computed under Section 14A of the Act pertain to computation of income under normal provisions of the Act and cannot be read into the provisions of Section 115JB of the Act pertaining to computation of book profits by levy of Minimum Alternate Tax (MAT) and there is no express provision in clause (f) of Explanation 1 to Section 115JB of the Act to that extent - Third substantial question of law is answered against the revenue and in favour of the assessee Addition of portion of common expenses allocated - as per AO expenses incurred are to be apportioned among all the units in the ratio of their respective turnovers - as per CIT-A amount related to the employees employed in non export oriented units and the assessee had separately debited salaries and wages in respect of export oriented units in the communication which was forwarded to the Assessing Officer - ITAT deleted addition - HELD THAT:- AO has not mentioned anything contrary in his remand report, therefore, the Commissioner of Income Tax (Appeals) has permitted the allocation of the expenses incurred by the assessee viz., legal and professional fees, rates and taxes, insurance, managerial remuneration and miscellaneous expenses. ITAT has held that the expenses related exclusively to non export oriented units and has affirmed the finding recorded by the Commissioner of Income Tax (Appeals). For the aforementioned reasons, the fourth substantial question of law is also answered against the revenue and in favour of the assessee. Set of EOU profits against non EOU losses and brought forward depreciation - Whether deduction has to be allowed from the total income of the assessee and as per section 2(45) the total income should be computed from various sources after set off of losses from one source against income from other sources - HELD THAT:- It is evident that the revenue has not disputed that the ratio laid down in YOKOGAWA [2016 (12) TMI 881 - SUPREME COURT] is applicable to the facts of the present case. It is pertinent to mention that the decision of this court in M/S KARLE INTERNATIONAL PVT. LTD.[2020 (9) TMI 968 - KARNATAKA HIGH COURT] is not applicable to facts of the case as in the aforesaid case, the assessee had not claimed any deduction under Section 10B of the Act. For the aforementioned reasons, the fifth substantial question of law is also answered against the revenue and in favour of the assessee.
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