TMI Blog2013 (7) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure did not result in the creation of any specific asset - this is now covered in favour of the assessee by Tribunal's decision rendered in assessee's own case for A.Y. 2001-02 and 2005-06. Against revenue. Expenditure on acquiring fire fighting equipments and on safety measures - revenue v/s capital - Held that:- Tribunal in A.Y. 2000-01 also decided the issue on this basis that similar issue has arisen in the earlier assessment year and it was decided in favor of assessee and no appeal has been filed by Revenue. There is no discussion about the facts for A.Y. 2000-01 or A.Y. 2001-02. It is not clear as to whether in those years, the issue involved was regarding maintenance of fire fighting equipments or for replacing some parts of those equipments or whether full new equipments were acquired in those two years. Thus restore the matter back for a fresh decision. Disallowance u/s 14A towards interest and other expenses - Held that:- In two years 2004-05 and 2005-06, the Tribunal has confirmed the disallowance of 5 lacs in each year u/s 14A in respect of other expenses. Since no difference in facts could be pointed out by D.R. of the revenue, in the present year also, thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision is required because Ld. CIT (A) has not given any basis as to how he has determined the rate of power sold by GEB to the assessee at Rs. 4.55 per unit. In favour of assessee for statistical purposes. - ITA No. 401 /Ahd/2010, ITA No. 477/Ahd/2010, C.O. No. 93/Ahd/2010 - - - Dated:- 21-6-2013 - Shri D. K. Tyagi And Shri A. K. Garodia,JJ. For the Petitioner : Sri Shelly Jindal, CIT-D.R. For the Respondent : Sri Y. G. Shah, A. R. ORDER Per Bench:- There are cross appeals of the assessee and Revenue and the CO is filed by the assessee and all are directed against the order of Ld CIT (A)-I Baroda dated 30-10- 2009 for assessment year 2006-07. First, we take up the assessee's appeal in ITA No. 401/Ahd/2010 2. Ground No. 1 is general and the ground no. 2 is as under:- "2. The Ld. CIT(A) erred in confirming disallowance made by the Assessing Officer of Rs. 8,39,417/- out of expenditure incurred on repairs maintenance, considering the same as capital expenditure. Your appellant submits that the expenditure of Rs. 8,39,417/- represents the cost of the civil work for the de- botttle-necking of De-hydro generation section of existing Capro Expansion Plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round No. 3 is as under:- "3. The Ld. CIT(A) erred in not deciding the ground for not granting 1/6th of the expenses of Rs. 2.57 crores being expenses on payments to Financial Consultants by Assessing Officer as held by learned CIT(A) as allowable vide his order in appeal against order u/s 143(3) for Assessment Year 2004-05" 6. It is submitted by Ld. A.R. of the assessee that this was not decided by Ld. CIT(A). Hence, we feel that the matter should go back to the file of Ld CIT(A) for deciding this issue and accordingly, this matter is restored back to the file of Ld. CIT(A) for deciding this issue which was raised by the assessee. CIT(A) should decide this issue as per law after hearing both the sides. This ground is allowed for statistical purpose. 7. Ground No. 4 is as under:- "4. The Ld. CIT(A) erred in not deciding the ground for giving direction to ld. A.O. to quantify the unabsorbed loss under the head 'Capital Gains', which is not done by the ld. A.O. in the order passed. It is submitted that it be so held now." 8. Ld. A.R. of the assessee submitted that this is not pressed and accordingly rejected as not pressed. 9. In the result, the appeal of the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submitted that this issue is now squarely covered in favour of the assessee by the Tribunal's order in assessee's own case for the A.Y. 2001-02, copy of which is available in the paper book and the same was followed in subsequent years A.Y. 2002-03, 2003-04 and 2004-05 also. 15. We have considered the rival submissions and perused the material on record and gone through the orders of authorities below. In the Tribunal decision cited by Ld. A.R. of the assessee, the first Tribunal decision cited before us is rendered in the case of assessee for A.Y. 2001-02, relevant portion being Para 6-7 are available on pages 103-104 of paper book. 16. From the same, we find that in that year, Tribunal has followed an earlier decision for A.Y. 2000-01. Tribunal in that order has also produced relevant Para of Tribunal decision for A.Y. 2000-01 being Para no. 18 and as per Para the same, it is seen that the Tribunal in A.Y. 2000-01 also decided the issue on this basis that similar issue has arisen in the earlier assessment year and it was decided in favor of assessee and no appeal has been filed by Revenue. There is no discussion about the facts for A.Y. 2000-01 or A.Y. 2001-02. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h borrowings and hence it is these borrowings which were utilized to earn exempted income and the co-relation between the borrowings and utilization can not be reflected in the balance sheet prepared on a particular date. 3(c). The ld. CIT(A) failed to appreciate that, it was up the assessee to prove by furnishing day-to-day cash flow that no interest-bearing funds were deployed to earn exempted income and, in the absence of the same, the Assessing Officer was justified in drawing inference as per the ratio settled in the case of CIT vs Motor General Finance Ltd. 254 ITR 449 (Del) since confirmed in principle by the Supreme Court in the case of Motor General Finance vs CIT 267 ITR 381 (SC). 3(d). The ld. CIT(A) erred in deleting the disallowance by putting arbitrary and narrow meaning on the term 'incurred in Section 14A when this section nowhere refers to incurring of expressly quantified expenditure in relation to exempted income and, instead, uses the wider expression "in relation to" and not "for earning of". 18. Ld. D.R. of revenue supported the assessment order whereas ld. AR of the assessee supported the order of Ld. CIT (A). He also submitted that disallowance made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced for ready reference. "7.3.1. So far as the other items at Sr. No. 2,4,5, 6 are concerned, it is noticed that they pertained to water proofing, overhauling and renovation expenses. These expenses lie in the revenue filed, since no new assets have been brought into existence. Accordingly, the disallowances of Rs. 11,15,520/-, Rs. 7,15,768/-, Rs. 8,15,853/- and Rs. 11,61,642/- are directed to be withdrawn." 22. From the above Para, we find that clear finding is given by Ld. CIT (A) that these expenses pertained to water proofing, overhauling and renovation expenses. This finding of Ld. CIT (A) could not be controverted by Ld. D.R. of the revenue and hence, we find no infirmity in the order of Ld. CIT (A) on this issue. We, therefore, decline to interfere in the order of Ld. CIT (A) on this issue. This ground is rejected. 23. Ground No. 5 is as under:- "5(a). On the facts, in the circumstances of the case and law, the ld. CIT(A) erred in relying on the decision of Hon. ITAT in the case of Alembic Ltd. for A.Y. 2003-04 bearing ITA No. 3594/Ahd/2007 dated 6.6.2008 wherein the Hon. ITAT allowed the appeal of the assessee in respect of claim of assessee u/s. 80IA(4) by ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Chemicals Fertilizers Ltd. vs. CIT 227 ITR 172 (SC). 6(b). On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the adjustment of book profits u/s 115JB by the disallowance of expenses in relation to income which does not form part of total income of Rs. 1,42,82,040/-. 6(c). On the facts and in the circumstances of the case and in law, ld. CIT(A) erred in directing to recomputed the book profit in respect of take or pay rental charges relying upon the provision of Section 115JB(2)(i) of the Act." 27. Ld. D.R. of the Revenue supported the assessment order whereas Ld. A.R. of the assessee supported the order of Ld. CIT (A). He also submitted that this issue is squarely covered in favour of the assessee by the Tribunal order in earlier years i.e. 2002-03,2004-05 and 2005-06 and copy of these Tribunal orders are available on page no. 277 and 291 of the paper book respectively. 28. We have considered rival submissions and we find that the issue involved in Ground No. (6A) is now squarely covered in favour of the assessee by the Tribunal order in earlier years of assessee's own case and no difference in facts could be pointed out by Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st day of April, 1997 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation or Explanation below the second proviso to section 115JA, as the case may be ; or]" 30. From the provisions of this clause of explanation, it is seen that in order to be eligible for reduction from book profit, the amount in question should be in respect in reserve/provision excluding a reserve created before the 1st April, 1997 otherwise than by way of debiting to the P L account. Hence, before allowing reduction under this clause of the explanation, this aspect has to be determined as to whether the reserve in question was created before 1st April, 1997 otherwise than by way of debit to P L account. No finding was given by the Ld. CIT (A) on this aspect. Hence, his order on this aspect cannot be sustained. We, therefore, restore this matter to the file of Ld. CIT (A) for his fresh decision. Ld. CIT (A) should examine this aspect as to whether the reserve from which the amount is withdrawn has been created by the assessee before 01-04-1997 or after 01-04-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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