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2015 (5) TMI 306 - ITAT MUMBAI

2015 (5) TMI 306 - ITAT MUMBAI - TMI - Disallowance of interest on application money for tax free bonds - Held that:- As decided in assessee own case in respect of the immediate preceding year [2014 (6) TMI 146 - ITAT MUMBAI] wherein following the case of CIT vs. Bharat Heavy Electricals Ltd.[2012 (9) TMI 515 - DELHI HIGH COURT] held interest for the brief period between the date of application and allotment of bonds could not be taxed – Revenue could not bring any contrary fact or case law – De .....

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DBI is made from cash credit account, which was showing overdraft is not sufficient to disallow the allowability of deduction u/s. 32AB, particularly in view of the fact that the assessee is having cash profit of ₹ 51.65 crores, which is not contradicted by the revenue. So far as it relates to allowability or otherwise of deduction u/s. 32AB on the income of earlier years, town income and rental income from employees, learned CIT(A) has allowed the claim of the assessee for the reason that .....

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e restored back to the file of the CIT(A) with a direction to readjudicate the same in the light of the decisions relied upon by the AR after bringing all the facts on record. - Decided in favour of revenue for statistical purposes.

Disallowance of convertible bonds/debentures - Held that:- Decided in favour of the assessee in assessee’s own case for A.Y. 1992-93.

Disallowance of Bhanwad Prospecting and survey expenses - Held that:- Tribunal in the assessee’s own case for A .....

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the assessee’s own case for A.Y. 1987-88 [2014 (6) TMI 146 - ITAT MUMBAI] has given its finding and has followed the decision of the Tribunal in assessee's own case for A.Y. 1984-85 and directed the AO to allow the investment allowance on exchange loss treated as capital expenditure. Facts being identical, respectfully following the decision of the Tribunal (supra), we accordingly direct the AO to allow the investment exchange loss treated as capital expenditure .Thus this issue is restored .....

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) TMI 4 - HIGH COURT BOMBAY ]. The facts for this year being identical in nature, the AO is directed to decide this issue in the light of the earlier year’s decisions in the own case of the assessee

Disallowance of foreign travel expenses - Held that:- Restore this issue to the file of the AO with a direction to verify the contentions of the assessee. If the foreign travel expenses are incurred in respect of already existing business, the same should be allowed. For the rest of the di .....

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A.Y. 1985-86 followed the decision of the Tribunal in assesee’s own cae for A.Yrs. 1981-82 and allowed the claim. - Decided in favour of assessee.

Disallowance under section 43B - royalty of limestone - Held that:- Royalty on limestone is restored to the file of the AO for verification of the payments as per the provisions of Sec. 43B and if it is found correct, then AO is directed to allow the deduction - Decided in favour of assessee for statistical purposes.

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urred for existing business then the same should be allowed. - Decided partly in favour of assessee for statistical purposes. - ITA No.4465/Mum/2003 - Dated:- 20-4-2015 - Shri I P Bansal And Shri N K Billaiya JJ. For the Appellant : Shri Akhilendra Yadav For the Respondent : Shri Dinesh Vyas ORDER Per I P Bansal, Judicial Member : These are cross appeals directed against the consolidated order passed by the CIT(A) dated 28.02.2003 in respect of A.Ys. 1986-87 to 1991-92. 2. It may be mentioned he .....

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ee are lengthy and narrative, therefore, for the sake of brevity we refer to the grievance of both the parties ground-wise as has been mentioned in the chart. It may also be mentioned here that in the chart reliance has been placed on various judicial pronouncements which may also include the decision rendered by the Tribunal in assessee s own case, therefore, wherein the issue is covered by the order of Tribunal in assessee s own case, reference, is made by us only to the decision of the Tribun .....

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ence was made to the decision of the Tribunal dated 16.05.2014 passed in ITA No. 4464 & 4565/Mum/2003, copy of which has been placed at Sr. No.5 of the paper-book. The relevant discussion of the Tribunal is found in para 5 & 6 of its order, which reads as under:- 5. Ground No.1 as reproduced above is relating to taxing of the interest amount received by the assessee on application money for purchasing tax free bonds. At the outset, the ld. A.R. of the assessee has submitted that under se .....

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eriod between the date of application and allotment of bonds could not be taxed. 6. The ld. D.R. could not bring before us any contrary fact or case law which may justify departure from the above decision of the Hon ble High Court. In view of the above, the ground No.1 is allowed in favour of the assessee. 5. After hearing both the parties, respectfully following the aforementioned decision of the co-ordinate Bench in respect of the immediate preceding year, we allow ground no.1 in favour of the .....

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ount was disallowed by the AO on the ground that all receipts were deposited in the cash credit account with the bank from which overdraft was taken by the assessee from time to time for the purpose of business. The learned CIT(A) has granted relief to the assessee as according to him section 32 AB provides that where an assessee whose total income includes chargeable to tax under the head profit and gains of business has out of such income deposited any amount with the IDBI then the same shall .....

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ed by the assessee as under: Dividend from Tata Fertilizers Ltd. Rs.589.97 lakhs Dividend from UTI Rs.402.69 lakhs Dividend from other companies ₹ 63.24 lakhs Interest on debentures ₹ 3.15 lakhs Interest on tax free bonds Rs.538.2 lakhs The assessee in its appeal in ground no.2 is agitating the disallowance u/s. 32AB on the aforementioned dividend and interest, whereas revenue in its appeal in ground no. 5 is agitating the order of the CIT(A), vide which it has been held that the ass .....

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n the following decisions to contend that the assessee is entitled to deduction u/s. 32AB on the entire amount: • Tata Yodogawa 67 ITD 174 (Pat) • Highway Cycles India 1 SOT 176 (Chd) (SB) • Diner s Club India Ltd. 248 ITR 679(Bom) • Apollo Tyres vs CIT 255 ITR 273 (SC) • Jindal Aluminium Ltd. 87 ITD 598 • Mahavir Spinning Mills Ltd. 87 TTJ 400 • Sukhjit Starch & Chemicals Ltd. 85 TTJ 218 • Tata Sons Ltd. ITA No.5742/M/02 for (AY 1990-91) The learned D .....

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IDBI deposit, we are of the opinion that the learned CIT(A) has correctly decided the issue in favour of the assessee. The assessee is having cash profit of ₹ 51.65 crores and only for the reason that deposit of IDBI is made from cash credit account, which was showing overdraft is not sufficient to disallow the allowability of deduction u/s. 32AB, particularly in view of the fact that the assessee is having cash profit of ₹ 51.65 crores, which is not contradicted by the revenue. So f .....

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learned AR. While deciding this issue also the learned CIT(A) has not considered any of the judicial pronouncements. Therefore, keeping in view the interest of justice, we are of the opinion that the issue relating to ground no.4 of the revenue s appeal and ground no.2 of the assessee s appeal requires to be restored back to the file of the CIT(A) with a direction to readjudicate the same in the light of the decisions relied upon by the AR after bringing all the facts on record. So far as it rel .....

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wed on payment basis in A.Y. 1992-93. This ground is dismissed being not pressed. 13. Ground no.4 relates to disallowance of expenses on issue of convertible debentures amounting to ₹ 17,94,514. This ground was stated to be covered by the decision of the Tribunal dated 26.04.2013 in ITA Nos. 4564 & 4463/Mum/2003 for A.Y. 1986-87, copy of which is placed at Sr. No.4 of the paper-book. This issue has been discussed at para 18 to 21, which is reproduced below: 18. Ground no.6 relates to d .....

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iscussed this issue at para 69 of its order and has allowed the debenture expenses. In the instant case, facts being identical, therefore respectfully following the decision of the Tribunal (supra), we direct the AO to allow the expenses on issue of debentures. This ground of the assessee is accordingly allowed. Accordingly, after hearing both the parties this ground is allowed in favour of the assessee. 14. Ground 5 of asessee s appeal relates to disallowance of Bhanwad Prospecting and survey e .....

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ound No.2 as reproduced above is relating to the disallowance of Bhanwad Prospecting & Survey Expenses of ₹ 1,6 1,176/-. The ld. A.R. of the assessee has submitted that the issue taken vide ground No.2 is covered in favour of the assessee by the decision of the Tribunal in the own case of the assessee for assessment year 1986-87 vide ITA No.4564/M/2003. The Tribunal while dealing with the issue in question in para 14 of the said decision has observed that since the assessee had been al .....

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s as expenditure. . This issue is stated to be covered by the aforementioned order of the Tribunal dated 16.05.2014 in the assessee s own case for A.Y. 1987-88 in ITA No.4565/Mum/2003. We find that that the Tribunal in the said order vide para nos. 9 & 10 has held as under: 9. Ground No.3 as reproduced above is relating to the disallowance of foreign exchange fluctuation loss as revenue expenditure and further disallowance of investment allowance on increase in liability on account of foreig .....

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in ITA No. 4194 & 4137/M/01 for A.Y. 1984-85. We find that the assessee has been allowed depreciation on foreign exchange fluctuation loss by the Tribunal in ITA No. 4137/M/01 at para-15 page 12 of its orders. Facts and issues being identical, we accordingly direct the AO to allow depreciation as per law. As regards the second limb of ground No. 5 i.e. disallowance of investment allowance, we find that similar issue came up for hearing before the Tribunal in assessee's own case in A.Y. 8 .....

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allow the investment exchange loss treated as capital expenditure. 10. So respectfully following the above decision of the Tribunal for the earlier assessment year, the facts being identical for this year also, this issue is restored to the AO to decide the same in view of the above observations of the Tribunal for this year also. In this view of the situation after hearing both the parties, we restore this issue to the file of the AO with same directions as have been given above. This ground is .....

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the identical issue, for earlier assessment years i.e. assessment year 1984-85, 1985-86 and 1986-87 has been referred back to the AO. Facts for this year being identical this issue is accordingly referred back to the AO to decide in accordance with the directions of the Tribunal given for earlier assessment years. Accordingly, we restore this issue to the file of the AO to decide the same in accordance with the directions given by the Tribunal in above decision. This ground is considered to be .....

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order dated 16.05.2014 it was held as under: 23. The ground No.13 as reproduced above relates to addition of interest on account of advance to subsidiary company. The ld. A.R. has submitted that the issue is squarely covered in favour of the assessee for earlier assessment years. For reference he has relied upon the decision of the Tribunal for assessment year 1986-87 passed in ITA No.4564/M/2003. The Tribunal, while dealing with the issue, has allowed this ground following the decision of the .....

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sallowance of foreign travel expenses amounting to 6,32,809. The break-up of the same is given in Annexure 1 of the chart filed before us. Out of this a sum of ₹ 3,16,976 relates to oil refinery, which was not pressed by the learned AR for the reason that these expenses were incurred for a new business. Balance amount of ₹ 3,15,873 relates to existing business. It is the contention of the AR that out of the total disallowance of ₹ 6,32,809 the sum of ₹ 3,15,873 should be .....

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ly planning expenses amounting to ₹ 79,680/-. It was submitted the disallowance of similar expense in the assessee s own case for A Y 1987-88 was restricted to 50%. In the said order the Tribunal vide para 21 has observed as under: 21. Ground No.11 as reproduced above relates to family planning expenses. The ld. A.R. has stated that the family planning expenses were incurred by the assessee on the workers who, though, were not regular employees of the assessee, but in fact their earnings d .....

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The ld. A.R. has further submitted that the said expenditure was not only incurred for the welfare of the workers but also for a social cause. So considering the overall facts and circumstances of the case, the disallowance on this issue is restricted to 50% of the expenditure incurred. This ground is accordingly partly allowed in favour of the assessee. Accordingly, after hearing both the parties, we direct the AO to restrict the disallowance to 50% of the expenditure incurred. This ground is c .....

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is order and the Ld. CIT(A) has decided the grievance at para - 12 page 44 of his order. We find that the similar issue has come up before the Tribunal in assessee;s own case for A.Y. 1985-86 in ITA No. 5181/M/02. We find that the Tribunal has discussed this issue at para - 66 and the findngs of the Tribunal is given at para - 70 of its order. We find that the Tribunal has followed the decision of the Tribunal in assesee s own cae for A.Yrs. 1981-82 & 1982-83 in ITA No. 1579/M/98 and allowed .....

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s case for A.Y. 1987-88, wherein at para 14 in its order dated 16.05.2014 it has been observed as under: 14. Ground No.6 as reproduced above is relating to the expenses incurred on annual general meeting of shareholders. The ld. A.R. of the assessee has submitted that the issue taken vide ground No.6 is covered in favour of the assessee by the decision of the Tribunal in the own case of the assessee for assessment years 1995-96 and 1996-97 vide ITA No.2658/M/2002 and 5728/M/06 respectively. The .....

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as per the directions of the Tribunal given for assessment year 1995-96 and 1996-97 in the own case of the assessee Accordingly, after hearing both the parties, we restore this issue to the file of the AO to decide the same in the light of the earlier year s decision in the assessee s own case. This ground is considered to be allowed for statistical purpose in the manner stated above. 25. Ground no.14 relates to following disallowance u/s. 40A(9) Tata Sports Club Rs.2,35,600 Payment to schools ( .....

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). So far the issue relates to disallowance of sundry contributions is concerned, the ld. A.R. has submitted that the issue raised vide ground No.7 is squarely covered in favour of the assessee for earlier assessment years i.e. assessment year 1985- 86, 1986-87, 1995-96 and 1996-97. For reference we take up the decision of the Tribunal for assessment year 1986-87. The Tribunal vide para 51 of the order has observed as under: 51. This issue find place at page-12 para 26 of the assessment order an .....

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essee's own case for A.Yrs 1993-94 to 1995-96. Respectfully following the decision of the Tribunal in assessee's own case, we direct the AO to allow the expenses as claimed by the assessee. Ground No. 14 is accordingly allowed. 16. Since the facts for this year are also identical, hence the AO is directed to allow the expenses following the decision of the Tribunal in the earlier assessment year as reproduced above. 17. So far the payments to schools (staff welfare expenses) is concerned .....

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ith the aforementioned decision of the Tribunal on this issue in earlier assessment years. It may be mentioned here that so far as it relates to sundry contribution of ₹ 4,064 the same was not pressed due to smallness of amount. Therefore to this extent the disallowance is upheld. This ground is considered to be partly allowed for statistical purpose. 26. Ground no.15 relates to disallowance of Delhi Office expenses amounting to ₹ 1,25,000. As per chart this issue is also covered by .....

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s in the own case of the assessee. Accordingly, after hearing both the parties we direct the AO to decide the issue in the light of the earlier year s decision in the assessee s own case. This ground is allowed. 27. Ground no.16 relates to the following disallowance made u/s. 43B Royalty to Limestone ₹ 3,59,426 Mineral Rights Tax Rs.55,04,020 So far as the expenditure incurred as royalty to Limestone is concerned, this was stated to be covered by the order of the Tribunal dated 16.05.2014 .....

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Mum/20 03 I.T.A. No .45 65/ Mum/20 03 15 year 1986-87 in ITA No.4564/M/03 in the own case of the assessee. The Tribunal, while dealing with the issue in para 36 of the said decision, has restored the issue back to the file of the AO to verify the payments, observing as under: 36. These items of disallowances are discussed by the AO at page-10 para-23 of his order. The AO has disallowed Royalty of Limestone at ₹ 1,71,003/- following the assessment order of his predecessor for A.Y. 1984-85. .....

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nd if found correct, may allow the deduction. This grievance of the assessee is allowed for statistical purposes. So far as the expenditure relating to Mineral Rights Tax is concerned, reference was made to para 32 and 33 of the order, which is reproduced below: 32. We accordingly direct the AO to decide this issue accordingly as per the above decision. So far the disallowance relating to mineral rights tax is concerned, the ld. A.R. has fairly stated that the issue has already been decided by t .....

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rs of the lime stone which means that to the extent of MRT, the assessee has retained the money from the suppliers on the pretext that it will make the payment to the Government. Therefore, by not paying the said amount to the Government, the assessee has retained public fund with itself. As the assessee itself has agreed to pay the MRT on the limestone purchased by it and as it has not discharged the liability till the end of the accounting year, we do not find any reason to tamper with the fin .....

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ons of Sec. 43B and if it is found correct, then AO is directed to allow the deduction. This grievance of the assessee is allowed for statistical purposes. 29. So far as the issue relating to Mineral Rights Tax is concerned, respectfully following the decision of the Tribunal in the assessee s own case (supra), we decide the issue against the assessee. 30. Accordingly ground no.16 is partly allowed in the manner aforesaid. 31. Ground no.17 relates to disallowance of 20,00,000 out of provision fo .....

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ention of the learned AR that out of the said amount the assessee does not press for disallowance of ₹ 1,15,420 incurred on Kamal Oil Refinery, which is a new business. The only case of the assessee is for balance amount of ₹ 24,000 which is incurred in respect of existing business. After hearing both the parties, we uphold the decision of CIT(A) in respect of ₹ 1,15,240 and for the balance disallowance of ₹ 24,000, we restore the issue to the file of the AO with a direct .....

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net of recoveries) Rs.4,79,458 Depreciation Rs.1,44,721 Maintenance expenses Rs.4,34,994 Rs.20,10,227 This ground was pressed only to the extent of food expenses amounting to ₹ 4,79,458. It was contended that to this extent the issue is decided in favour of the assessee by the latest decision of the Tribunal rendered in respect of A. Y. 1996-97, which is filed at Sr. no.12 of the paper-book. In this order dated 17.08.2007 (ITA No. 5728/Mum/2004) the issue has been discussed at para 4.2 and .....

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e guest house. Coming to the other expenses incurred on the guest house, i.e. salaries ₹ 29,41,078; repairs ₹ 5,91,940; and society charges and taxes ₹ 2,84,949 we hold that the issue is covered against the assessee and in favour of the Revenue by the decision of the Hon ble Supreme Court in the case of Britannia Industries Ltd. Vs. CIT 278 ITR 546 (SC). Respectfully following the same we uphold these disallowances made by the Revenue authorities. 4.3 In the result, this ground .....

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nting to ₹ 8,097. Due to smallness of amount, this ground was also not pressed. Accordingly, this ground is dismissed as not pressed. 4465/Mum/2003 AY :1988-89(Revenue s appeal) 36. Ground no.1 relates to disallowance of ₹ 4,17,990 being entertainment expenses on subsidized food coupons delivered to staff. In this respect it was submitted that this issue is covered in favour of the assessee by the order of the Tribunal dated 16.05.2014 in ITA No. 4464/Mum/2003 for A.Y. 1987-88 , at p .....

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essee accordingly, in terms of the directions given by the Tribunal for assessment year 1995-96 in the own case of the assessee. Accordingly, after hearing both the parties, we decide this issue in favour of the assessee and the ground raised by the assessee is dismissed. 37. Ground no.2 of the revenue s appeal relates to disallowance of ₹ 75,000 being payments made to Tata Services Ltd. This issue was also stated to be covered by the order of the Tribunal for A.Y. 1987-88 (supra) in favou .....

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und is also accordingly decided in favour of the assessee as per the directions given by the Tribunal for assessment years i.e. assessment years 1983-84, 1984-85 and 1986-87 in ITA Nos.4242/M/1999, 4194/M/2001 and 4564/M/2003 respectively in the own cases of the assessee. Accordingly, this ground being also covered in favour of the assessee the same is dismissed. 38. Ground no.3 relates to disallowance of ₹ 1,98,012 being incentive bonus given to workers. This issue is stated to be covered .....

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