TMI Blog2015 (8) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... of the claim made by the assessee in respect of such expenditure. Hence, in view of our above observation, this issue is restored back to the file of AO with a direction to give the assessee a reasonable opportunity to place on record all relevant facts including its accounts and examine the computation calculation made in this regard by the assessee regarding the suo-motu disallowance of ₹ 25,34,001/-. Disallowing claim u/s. 35D towards 1/5th of the share issue expense incurred on account of expansion of business - Held that:- Assessee has vehemently contended that the activities of the assessee company falls in the definition of industrial activity. However, he could not rebut the contention that as per the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected to delete the disallowance so made. 2. On the facts and in the circumstances of the case and in law, the AO erred in disallowing an amount of ₹ 13,03,506/- claim u/s. 35D towards 1/5th of the share issue expense incurred in F.Y. 2006-07, on account of expansion of business. 2.1 Ground no.1 relates to disallowance of ₹ 32,19,195/- made by the AO under section 14A of the Income Tax Act, 1961 r.w. Rule 8D of the Income Tax Rules. The brief facts are that the AO noticed that assessee had received tax exempt dividend income of ₹ 39,72,043/-. However, the assessee had disallowed a sum of ₹ 25,34,001/- only towards expenditure incurred in relation to earning of exempt income. The AO however calculated the disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonable opportunity to place on record all relevant facts including its accounts and examine the computation calculation made in this regard by the assessee regarding the suo-motu disallowance of ₹ 25,34,001/-If the AO will not be satisfied with the working given by the assessee, then he will record his dissatisfaction in this regard by way of a speaking order and will be at liberty to make the disallowance on some reasonable basis. 3. Vide ground No.2, the assessee has agitated the disallowance of an amount of ₹ 13,03,506/- claimed under section 35D of the Income Tax Act, 1961 towards 1/5th of the share issue expenses incurred on account of expansion of business. The AO rejected the claim of the assessee observing that firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) is opposed to law and facts of the case. 2(a) On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in holding that the provision of ₹ 1,32,18,459/- made on account of leave salary shall he allowed as deduction as the provision was on the basis of actuarial estimation irrespective of the fact that allowance of such provision of expense is prohibited under the provisions of section 43B(f) of the I.T. Act. 2(b) On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in holding that the provision of ₹ 1,32,18,459/- made on account of leave salary shall he allowed as deduction merely on the fact that the provision was based on actuarial estimation without ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roking Services Ltd., in ITA No.7531/Mum/2010. The Tribunal in the said case has restored the matter on the identical issue to the file of the AO while relying upon the decision in the case of Essar Exploration and Production India Ltd. vs. ACIT in ITA No.6189/Mum/2011 order dated 8/8/2012. The operating part of the order for the sake of convenience is reproduced as under: 3. At the outset Ld. AR of the assessee has produced before us a copy of order of the Tribunal dated 8/8/2012 in ITA No.6189/Mum/2011 in the case of Essar Exploration Production India Ltd. vs. ACIT, order dated 8/8/2012, in which similar issue came up for consideration of ITAT. Before ITAT reference was made to the aforementioned decision in the case of M/s. Univers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by department in the case of Universal Medicare Pvt Ltd (supra). At the time of hearing, ld A.R. submitted that the said appeal is yet to be disposed of. We also observe that ITAT Kolkata Bench by its order dated 30.1.2012 considered the said issue and by following earlier decision on identical issue in the case Ernst Young Pvt Ltd. (supra) has restored the matter to the file of AC with a direction to adjudicate the same as per decision of Hon'ble apex Court in the case of Exide Industries Ltd (supra), In view of above and respectfully following the earlier decisions (supra), we set aside the orders of authorities below and restore the matter back to the file of AO for adjudication afresh as per the decision of Hon'ble apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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