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2024 (3) TMI 1203 - AT - Income TaxDisallowance of WIP - CIT(A) deleting the disallowance being the amount provided in valuing work-in-progress of construction contracts - As per revenue to that extent profit of the assessee company got reduced - HELD THAT:- Respectfully following the decision of Co-ordinate Bench in assessee's own case in the preceding Assessment Years 1994-95, we find no merit in the ground raised by the Revenue in its appeal wherein as observed that the Tribunal has made specific finding in the earlier years that the valuation of work-in-progress relating to incomplete contracts has been made by the assessee company in a consistent manner following the accepted principles of accounting and decided the issue in favour of the" assessee. Respectfully following the decision of the coordinate bench in assessee's own case, we set aside the impugned orders of the authorities below and allow the ground of appeal raised by the assessee. Decided against revenue. Disallowance of Commission - AO has disallowed payment of commission as the assessee had not furnished adequate evidence to substantiate that the expenditure was incurred wholly and exclusively for the purpose of business - HELD THAT:- We find that this issue is recurring. In absence of any cogent evidence, the assessee’s claim of payment of commission has been consistently dismissed. Similar is the situation in the impugned assessment year. No evidence has been brought on record by the assessee to substantiate its claim. Decided against assessee. Addition u/s. 40A(9) - Contribution to Utmal Employees Welfare Fund - disallowed assessee’s claim on the ground that the said payment is not backed by any legal provision or any law for the time being in force, hence, the amount was disallowed u/s. 40A(9), also confirmed by CIT(A) - HELD THAT:- As this issue has been decided by the Tribunal [2022 (5) TMI 104 - ITAT MUMBAI] (supra). The Co-ordinate Bench following the order of Tribunal in assessee's own case for preceding Assessment Year allowed assessee’s contribution towards Utmal Employees Welfare Fund. We find that this issue has been recurring since Assessment Year 1994-95. In preceding Assessment Years, the Tribunal has consistently allowed contribution towards said Fund.. The facts being similar in the impugned assessment year, ground No.2 of appeal is allowed for parity of reasons. Reduction in depreciation claim arising on account of refusal to treat transfer of Bangalore Undertaking as “Slump Sale” - HELD THAT:- We find that identical ground was raised by the assessee as additional ground of appeal in appeal for Assessment Year 2001-02 [2020 (10) TMI 1324 - ITAT MUMBAI] The Co-ordinate Bench decided the issue following the decision of Tribunal in assessee’s own case for Assessment Year 1998-99. No contrary material is placed before us by the Department. Hence, respectfully following the decision of Co-ordinate Bench we direct the Assessing Officer to accept assessee’s claim of depreciation. Decided in favour of assessee. Disallowance u/s.14A on account of interest expenditure - assessee has earned income from tax free bonds - contention of the assessee is that assessee is having own funds sufficient to cover the investments - HELD THAT:- It is no more res-integra that where the assessee is having mixed bag of; own interest free funds and borrowed interest bearing funds, it shall be presumed that the assessee has made investments from own interest free funds. Similar disallowance made by AO in Assessment Year 2001-02 & Assessment Year 2002-03 [2022 (5) TMI 104 - ITAT MUMBAI] was deleted by the Co-ordinate Bench. We deem it appropriate to restore this issue to Assessing Officer for the limited purpose of verification of availability of assessee’s own funds matching investments. In the result, ground No.4 of appeal is allowed with aforesaid directions. Nature of receipts - Extinguishment of Sales Tax deferred loan liability treated as revenue receipts - HELD THAT:- As decided in assessee own case [2020 (10) TMI 1324 - ITAT MUMBAI] we are inclined to set aside the order of CIT(A) on this issue by holding that such receipt is a capital in nature - Decided in favour of assessee. Deduction u/s. 80HHC - Reduction of 90% gross interest received from profits & gains of Business - HELD THAT:- We find that the Co-ordinate Bench while deciding the appeal for Assessment Year 2001-02 and Assessment Year 2002-03 following the decision of Tribunal in assessee's own case in [2020 (10) TMI 1324 - ITAT MUMBAI] for Assessment Year 2001-02 restored the issue back to the file of Assessing Officer. Both sides are unanimous in stating that the facts relating to Assessment Year under appeal on this issue are identical, hence, respectfully following the decision of Co-ordinate Bench we restore this issue back to the file of Assessing Officer with similar directions. Set off of loss on export of trading goods against profits on export of Manufactured goods - As assessee fairly stated that this issue has been decided against the assessee in the preceding Assessment Years, the facts in the impugned assessment year are identical. In view of the statement made by ld.Counsel for the assessee, sub-ground No. (b) is dismissed. Reduction of 90% Miscellaneous Income received from profits of Business - We find that similar issue was raised before Co-ordinate Bench in appeal by the assessee in Assessment Year 2001-02 and Assessment Year 2002-03 placing reliance on the decision of Tribunal for Assessment Year 2000- 01 [2020 (10) TMI 1324 - ITAT MUMBAI] restored the issue back to the file of Assessing Officer. The Revenue has not placed on record any material to controvert the submissions of the assessee, hence, following the decision of Co-ordinate Bench, we restore sub-ground (c) to the Assessing Officer for parity of reasons. Reduction of profits in respect of projects eligible for deduction u/s. 80HHB - We find that this issue was also considered by Co-ordinate Bench in the preceding Assessment Year and was restored to the Assessing Officer. Both sides are unanimous in stating that the facts relevant to the issue are identical to the facts in appeal for Assessment Year 2001-02 [2020 (10) TMI 1324 - ITAT MUMBAI] Hence, following the decision of Co-ordinate Bench, the issue in sub-ground (d) is also restored to the Assessing Officer. Rejection of claim of deduction u/s. 80IA in respect of Captive Power generating units - HELD THAT:- this issue has been considered by the Tribunal in the preceding Assessment Years in favour of assessee. Disallowance u/s. 14A for the purpose of computing book profit u/s. 115JB - HELD THAT:- Special Bench in the case of Vireet Investments Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] has held that while computing book profits u/s. 115JB of the Act disallowance made u/s.14A r.w.r. 8D shall not be considered. The Hon’ble Karnataka High Court in the case of Sobha Developers Ltd. [2021 (1) TMI 378 - KARNATAKA HIGH COURT] has reiterated that disallowance made u/s. 14A could not be added to book profits of assessee u/s.115JB of the Act. In light of aforesaid decisions, assessee succeeds. Adjudication of additional grounds - assessee is claiming deduction u/s. 80HHC and 80HHE of the Act under MAT provisions - HELD THAT:- The additional grounds raised by the assessee are purely legal, hence, additional grounds are admitted for adjudication. Since, these grounds have been raised for the first time before the Tribunal, we deem it appropriate to restore this ground to the Assessing Officer for consideration and adjudication on merits after affording reasonable opportunity of making submissions to the assessee, in accordance with law. Hence, additional ground No.1 and 2 are allowed for statistical purpose.
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