Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Yes Bank Ltd. Versus ACIT 7 (2) , Mumbai

2015 (11) TMI 1277 - ITAT MUMBAI

Disallowance of deduction under section 35D - amortization of expenditure incurred on Initial Public Offer of Equity Shares - revision u/s 263 - Held that:- Tibunal has already held, on merits as well, that the assessee is not eligible to claim deduction u/s 35D. After this order from the Tribunal in assessee’s own case, for this very assessment year, the issue under consideration i.e. allowability of claim u/s 35D, has attained ‘fait accompli’. In our considered view, this issue is no more open .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in our considered opinion, this issue is no more open for our adjudication, especially after it has been sealed by the Tribunal in its order. The assessee may have had some legal grievances against the order passed u/s 263, but, once the same was confirmed by the Tribunal, the right forum for hearing of these grievances would be before Hon’ble High Court. The law does not permit us to go into this issue, at this stage. - Decided against assessee. - ITA NO.4270/Mum/2013 - Dated:- 30-9-2015 - Shri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see has raised following grounds of appeal: GROUND NO. I: DISALLOWANCE OF DEDUCTION UNDER SECTION 35D OF THE ACT AMOUNTING TO ₹ 3,27,82,000/- IN RESPECT OF AMORTIZATION OF EXPENDITURE INCURRED ON THE INITIAL PUBLIC OFFER OF EQUITY SHARES: 1. On the facts and circumstances of the case and in law, the Learned CIT (A) erred in confirming the disallowance of deduction, claimed under section 35D of the Act in respect of amortization of expenditure incurred on Initial Public Offer of Equity Shar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

/-), being amortization of expenditure incurred on the Initial Public Offer of equity shares. The Assessee's return of income was scrutinized and order u/s 143(3) of the Act was passed by A.O. u/s 143(3) of the Act dated 31.12.2008. In the said assessment order, the A.O. allowed Assessee s claim of deduction u/s. 35D of the Act at ₹ 3,27,82,000/-. Thereafter the CIT-7, Mumbai passed revision order u/s 263 of the Act dated 02-03-2011, holding that assessment order was erroneous and prej .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g for claiming deduction u/s. 35D of the Act. Since the Assessee Bank was not an "Industrial Undertaking", therefore, the Ld CIT, by passing order u/s 263, cancelled the assessment order, directing the A. O. to re- frame the same by disallowing the Assessee s claim for the deduction u/s 35D of the Act. In pursuance of CIT s, order u/s 263 of the Act, the A.O. passed fresh assessment order u/s 143(3) r.w.s. 263 dated 03.11.2011, disallowing the assessee s claim of deduction u/s 35D at & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nk was not an "Industrial Undertaking". During the appellate proceedings before the Ld CIT(A), the Assessee had filed detailed submissions. 2.2 Ld CIT(A) considered the submissions of the Assessee and facts of the case, but confirmed the order of the AO on the ground that since the ITAT in Assessee's own case has held that the Assessee was not an "Industrial Undertaking", therefore, the Assessee was not entitled for deduction u/s 35D of the Act. The disallowance made by A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

en by Ld CIT in the order passed u/s 263, should be confirmed. 2.5. On the other hand, Ld counsel of the assesse has argued the matter in detail. He has assailed the order of lower authorities and argued that assessee was eligible to claim deduction u/s 35D. Various reasons given by the Ld Counsel in support of his arguments are as under : (i) Though the decision of Hon'ble Bombay High Court in the case of CIT vs. Emirates Commercial Bank Ltd (262 ITR 55) is on S. 32A(2)(b )(iii), the ratio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e on that. However, this decision cannot apply to a Banking Company as it is not engaged in the business of building, etc., (iii) Present case is covered by the decision of the Hon'ble Supreme Court in the case of CIT v. Peerless Consultancy & Service (P.) Ltd. (248 ITR 178), (iv) Hon ble ITAT s Order in A.Y. 2006-07 in ITA No.4002/Mum/2011 in Assessee's own case is per incuriam, as it is without considering the decision of the Hon'ble Supreme Court in the case of Peerless Financ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

supra , (vi) It was submitted that between Delhi High Court and Bombay High Court, the Hon'ble ITAT ought to follow Bombay High Court, being the Jurisdictional High Court and in his support, Ld counsel relied upon the judgment of CIT v. Thane Electricity Supply Ltd. (Bom HC) (206 ITR 727) and (vii) In case of difference in views of Delhi High Court and Madras High Court, the one which is more favourable to the Assessee should be followed in Bombay jurisdiction. Reliance was placed upon the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

are reproduced below: 10. We have heard both the sides, perused the records and gone through the orders of the authorities below. The assessee is a company carrying on banking business in India. During the relevant year an expenditure of ₹ 16.39 crore was incurred on IPO of equity shares and a deduction of 1/5 amounting to ₹ 3.27 crore was claimed u/s 35D. The claim of the assessee was allowed by the Assessing Officer. Subsequently, after perusal of the 7 Yes Bank Ltd. assessment or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d. (supra) & HSBC Securities and Capital Markets (India) Pvt. Ltd. (supra) and submitted that the claim of the assessee for deduction u/s 5D is in accordance with law and is eligible. The learned Commissioner after considering the explanation given by the assessee and also considering the case laws relied upon by the assessee has held that the Assessing Officer has not at all examined the issue and passed the assessment order without application of mind and the order is erroneous and prejudi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

resaid case that whether the bank is an industrial undertaking or not ?. The Hon ble Court has only considered the facts of the case in the context of section 32A(2)(b)(iii). 12. The Hon ble Delhi High Court in the case of Ansal Housing & Construction Ltd. (supra) has considered the meaning of the industrial undertaking for the purpose of section 35D elaborately while deciding the meaning of the industrial undertaking, the Hon ble Court has also considered the decision of the Hon ble Bombay .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that case was that as long as the assessee used these computers for production of articles and things it could be regarded as an industrial undertaking and this submission of the assessee was accepted by the Court. From the discussion up to now, it follows that:- a)Industrial undertaking is to be given the meaning which is understood in common parlance, and b)Which should be interpreted widely, At the same, we have to bear in mind that the expression is to be construed in the context of section .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

incurred expense on issue of IPO equity shares, claimed deduction u/s 35D. It is a fact that the asssesee has not carried any manufacturing activity. We, therefore, respectfully following the decision of the Hon ble Delhi High Court in the case of Ansal Housing & Construction Ltd. (supra), hold that the assessee is a bank and not an industrial undertaking for the purpose of section 35D and accordingly, we uphold the order of the CIT on merits of the case. 15. In so far as another argument of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ext, the Hon ble Delhi High Court in the case of GEE VEE Enterprises Vs. ACIT, 99 ITR 375 wherein the Hon ble Delhi High Court has observed as under:- It is not necessary for the Commissioner to take further inquiries before cancelling the assessment order of the Income-tax Officer. The Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Income-tax Officer should have made further inquiries before accepting the statements made by the assessee in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. It is because it is incumbent on the Income-tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word erroneous in section 263 includes the failure to make such an enquiry. The order becomes erroneous because such an inqu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version