9911796707
TMI Blog2015 (2) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... peal reads as under: "1. The Ld. CIT(A) has erred in law and on facts in giving relief of Rs. 24,57,522/- on account of bad debts as the assessee company was not able to explain and give evidence how the debts in respect of export sales were declared as bad debts and whether any steps were taken to realize the same. The assessee also could not furnish any evidence in the shape of certificate of RBI or any other banking organization certifying that the amount as claimed by the assessee had actually been written off and claimed as irrecoverable. The assessee has not furnished the details of surrender of cash incentive and duty draw back received against corresponding export sales." 4. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also placed reliance on the judgment of Hon'ble Punjab & Haryana High Court rendered in the case of CIT vs. Kings Exports [2009] 318 ITR 100 (P&H). Reliance was also placed on a Tribunal decision rendered in the case of DCIT vs. Nihal Enterprises in I.T.A. No.532/Lkw/2010 dated 29/12/2010. He also submitted that the copy of this Tribunal decision is on pages 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice, the Assessing Officer should look into this aspect and examine the details of the year of sale for which debts were created and now written off. The assessee should furnish these details before the Assessing Officer and Assessing Officer should thereafter allow deduction to the assessee in the present year in respect of write off of bad debts but consequently, he should examine the assessment of the concerned year in which the sale took place and for that year, the assessee should establish that these unrealized sales were not included in the export sales for the purpose of computing deduction u/s 80HHC. If the assessee is able to establish this then there will be no impact in that year but if it is found that deduction u/s 80HHC was allowed in the year of sale without excluding the unrealized sales, which were written off now, in that situation, the deduction u/s 80HHC in the year of sale should be recomputed after excluding unrealized sales from export sales in that year. With these observations, we restore this matter back to the file of the Assessing Officer for fresh decision in the light of above discussion. This ground of Revenue is allowed for statistical purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le from assessment year 2008- 09. Therefore, the assessment order on this issue is not sustaiable because on this issue, the assessment order is as per Rule 8D. 9. Now we examine the applicability of various judgments followed by learned CIT(A) to delete this disallowance. 9.1 The first judgment followed by learned CIT(A) is the judgment of Hon'ble Punjab & Haryana High Court rendered in the case of Hero Cycles Ltd. (supra). In this case, Hon'ble Punjab & Haryana High Court has followed its earlier judgment in the case of Winsome Textile Industries Ltd. (supra). We, therefore, examine the applicability of that judgment first. In that case, the facts were that the investments in shares were made in assessment year 94-95 using its own funds and the assessment year involved was 2004-05. In the light of this finding that the investment was made in assessment year 94- 95 out of own funds, it was held that no disallowance is called for out of interest expenditure. In that case, there was no dispute regarding disallowance u/s 14A in respect of administrative expenses and since interest expenditure was not disallowable because of this specific finding that investment in share wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance has to be made. As per the balance sheet of the assessee company, available on page No. 6 of the paper book, we find that investment is to the tune of Rs. 505.99 lacs whereas capital and reserve were to the tune of Rs. 8,001.21 lacs. As on 31/03/2004, cash and bank balance were to the tune of Rs. 793.45 lacs, which is more than the total investment of Rs. 505.99 lac as on 31/03/2005. Hence, it cannot be said that entire own funds available as on 01/04/2004 was lying invested in some other assets and therefore not available for making investment. Therefore, in the facts of the present case, it has to be accepted that own funds were available for making investment even at the beginning of the present year, although the entire investment was made prior to the present year. Considering these facts, we are of the considered opinion that no disallowance is called for u/s 14A of the Act out of interest expenditure. The disallowance made by the Assessing Officer is of Rs. 7,57,380/- out of interest expenditure and Rs. 1,80,752/- in respect of administrative expenditure. As per above discussion, the disallowance of interest expenditure of Rs. 7,57,380/- does not survive. In respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holly erroneous. 4. BECAUSE as far as the assessee/respondent is concerned, expenses claimed under the head 'Vehicle Running Expenses', had been incurred, laid out and expended wholly and exclusively for its business and no part of the same could have been disallowed. 5. BECAUSE similarly, exclusion of Rs. 49,01,555/- representing the "Duty Draw Back" received during the year, could not have been excluded from the computation of eligible profit for the purposes of relief under section 80IB resulting into short allowance of Rs. 14,84,185/- is erroneous. 6. BECAUSE, on the peculiar facts and circumstances of the present case, the decision of Hon'ble Apex Court in the case of Liberty India vs. CIT reported in (2009) 317 ITR 218 (SC), was not applicable. 7. BECAUSE in any case and wholly without prejudice to grounds No.5 & 6 above, it is stated that whole of the duty draw back amounting to Rs. 49,01,555/- could not have been excluded from the computation of "eligible profit" as the same should have been adjusted by a fair estimate of expenses attributable to the earning of such duty draw back." 13. Regarding ground No. 1 & 2, Learned A.R. of the assessee made general s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia, the judgment of Hon'ble Apex Court in the case of B. Deshraj (supra) should be followed. But we do not find any merit in this submission of Learned A.R. of the assessee because it cannot be said that while delivering the judgment in the case of Liberty India (supra), Hon'ble Apex Court was not aware of its own judgment in the case of B. Deshraj and hence, we do not find any merit in these three grounds of the assessee. Accordingly ground No. 5, 6 & 7 are rejected. 18. In the result, the Cross Objection of the assessee is partly allowed. 19. Now we take up the appeal of the assessee for assessment year 2006- 07 i.e. I.T.A. No.99/Lkw/2012. In this appeal, the assessee has raised the following grounds: "1. BECAUSE the 'return' filed by the assessee/respondent on 28.11.2006 having not been taken up for scrutiny, as per the provisions contained in clause (ii) of sub-section (2) of section 143, the appellant stood assessed on 30.09.2007 and the Assessing Officer had lost jurisdiction to make assessment under section 143(3) so as to vary the income shown in the said "return", by making various disallowance / short allowance as stood comprised in the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding the claim of Rs. 15 lac related to Shyam Behari Mishra Memorial Charitable Trust, no details have been filed by the assessee and therefore, the Assessing Officer has not allowed the claim of the assessee for deduction u/s 80G in respect of this amount of Rs. 15 lac. Neither before CIT(A) nor before us, any detail has been furnished by the assessee and therefore, on this issue, we do not find any merit in the grounds raised by the assessee. Accordingly, ground No. 5 is rejected. 22. In the result, the appeal of the assessee stands dismissed. 23. Now we take up the appeal of the Revenue for assessment year 2006- 07 i.e. I.T.A. No.126/Lkw/2012. In this appeal, the Revenue has raised the following grounds: "1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 8,41,996/- made u/s 14A without appreciating the fact and the case of DCIT v. S.G. Investment & Industries Ltd. (2004) 89 ITD 44 (Kol.), wherein it was observed that: - "It is true that the dividend income arising from shares held as stock-in- trade is business income in the sense that the dividend is realized from the trading asset, but at the same time, it has to be borne in mind that part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions contained in clause (ii) of sub-section (2) of section 143, the appellant stood assessed on 30.09.2009 and the Assessing Officer had lost jurisdiction to make assessment under section 143(3), so as to vary the income shown in the "return", by making various additions/disallowances/short allowances as stood comprised in the assessment order dated 31.12.2010, captioned as order "u/s.143(3)/144C of the Income Tax Act 1961". WITHOUT PREJUDICE TO THE AFORESAID 2. BECAUSE the authorities below have erred in law and on facts in holding that the sum of Rs. 1,42,94,042/- representing the "Duty Draw Back" received by the appellant, could not be held to be the income derived from business, qualifying for deduction under section 80IB, which resulted into short allowance of deduction under section 80IB, by a sum of Rs. 58,65,510/-. 3. BECAUSE on the peculiar facts and circumstances of the case, the decision of Hon'ble Apex Court in the case of Liberty India vs. Commissioner of Income-tax reported in (2009) 317 ITR 218 (SC), was not applicable in the instant case and reliance on the said decision by the Id. first Appellate Authority/ is wholly misplaced. 4. BECAUSE without causing ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
