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2016 (6) TMI 1036 - ITAT PUNE

2016 (6) TMI 1036 - ITAT PUNE - TMI - Disallowance u/s 14A - Held that:- We find the Tribunal in assessee’s own case for A.Y. 2009-10 had restricted such disallowance to ₹ 76,951/- which includes ₹ 26,951/- towards Demat charges. Since the facts of the impugned assessment year are identical to the facts decided by the Tribunal in case of the assessee for different assessment years, therefore, respectfully following the decision of the Tribunal as well as the order of the AO for A.Yrs .....

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own case for A.Y. 2007-08 - Disallowance u/s.43B - Held that:- Disallowance u/s.43B cannot be made on account of delayed payment of Employees’ contribution to PF and ESI, if the same has been deposited before the due date of filing of the return u/s.139(1) of the I.T. Act. Since the assessee in the instant case has admittedly deposited the Employees’ contribution to PF before the due date of filing of the return u/s.139(1) of the I.T. Act, therefore, we do not find any infirmity in the order .....

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ating to Assessment Year 2004-05. ITA Nos. 2095/PN/2014 and 2096/PN/2014 filed by the Revenue are directed against the separate orders dated 25-08-2014 of the CIT(A)-V, Pune relating to Assessment Years 2005-06 and 2006-07 respectively. ITA No.2097/PN/2014 filed by the Revenue is directed against the order dated 22-08-2014 of the CIT(A)-V, Pune relating to Assessment Years 2011-12. The assessee has filed the CO No.22/PN/2016 against the appeal filed by the Revenue for A.Y. 2011-12. For the sake .....

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ircumstances of the present case, the Ld.CIT(A) should have appreciated that disallowance u/s.14A of the Act should be restricted to ₹ 50,000/- as confirmed by the Revenue authorities for the preceding as well as subsequent years upto A.Y. 2007-08. Grounds by Revenue : 2(a) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in restricting the AO s disallowance u/s.14A of the Act to ₹ 50,000/- by relying on the Hon ble ITAT s decision in assesse .....

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nt portfolio and that the assessee company was not maintaining any record through which such expenditure could be identified. 3. This is the second round of litigation before the Tribunal. Facts of the case in brief are that the assessee filed its return of income for A.Y. 2004-05 declaring total income of ₹ 42,94,47,570/- which was subsequently revised to ₹ 44,70,06,640/-. The AO in the original assessment order passed u/s.143(3) on 31-10-2006 had made disallowance of ₹ 23,40, .....

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he above decision. Thereafter, the AO following the decision of Hon ble Bombay High Court in the case of Godrej and Boyce Manufacturing Company Ltd. (Supra) made disallowance of ₹ 23,40,334/- being 10% of the exempt income of ₹ 2,34,03,348/-. In appeal the Ld.CIT(A) restricted such disallowance to 2.5% of the exempt income which comes to ₹ 5,85,084/-. The relevant observation of the CIT(A) read as under : 12. I have carefully considered the facts of the case as well as reply of .....

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to r.5% of the exempt income. Facts being the same, respectfully following the decision of Hon ble Pune Tribunal, disallowance u/s.14A of the Income Tax Act is restricted to 2.5% of ₹ 2,34,03,348/- which comes to ₹ 5,85,084/-. Accordingly, the appellant relief of ₹ 17,55,250/- (23,40,334/- 5,85,084) while disallowance of ₹ 5,85,084/- is upheld. Thus, the ground is partly allowed. 5. Aggrieved with such order of the CIT(A) the Assessee as well as the Revenue are in appeal .....

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el for the assessee drew the attention of the Bench to the order of the Tribunal in assessee s own case for A.Y. 2009-10 and 2010-11 vide ITA Nos. 560 and 561/PN/2014 and ITA Nos. 578 and 579/PN/2014 and submitted that the Tribunal for A.Y. 2009-10 has sustained the amount of ₹ 76,951/- which includes Demat charges of ₹ 26,951/-. Similarly, for A.Y. 2010-11 the Tribunal at Para 30 of the order followed the order for A.Y. 2009-10 and sustained similar disallowance. He accordingly subm .....

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ase for various years. We find the AO in the original assessment order had disallowed ₹ 23,40,334/- being 10% of the exempt income of ₹ 2,34,03,348/- u/s.14A of the I.T. Act. We find the Ld.CIT(A) restricted such disallowance to ₹ 50,000/-. On further appeal the matter was set aside by the Tribunal to the file of the AO who repeated the same disallowance of ₹ 23,40,334/-. We find on appeal by the assessee the Ld.CIT(A) restricted such disallowance to 2.5% of the exempt in .....

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to 163 of the paper book. We find for A,.Y. 2007-08 the AO has accepted the suomoto disallowance of ₹ 50,000/- made by the assessee. We find the Tribunal in assessee s own case for A.Y. 2009-10 had restricted such disallowance to ₹ 76,951/- which includes ₹ 26,951/- towards Demat charges. Since the facts of the impugned assessment year are identical to the facts decided by the Tribunal in case of the assessee for different assessment years, therefore, respectfully following the .....

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of the case and in law, the Ld.CIT(A) was correct in disregarding the judgment of Hon ble Supreme Court given in the case of Southern Technologies Ltd. Vs. JCIT 320 ITR 577 (SC) which says that provisions of RBI Act cannot override the provision of Sec.145 of the Income Tax Act, since both the Acts operate in different fields and therefore assessee cannot recognize interest income on NPA and yet not offer it in profit and loss account. 1(b) Whether on the facts and circumstances of the case and .....

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made addition of ₹ 1,76,99,057/- being interest on Non Performing Assets (in short NPA ) which was not credited by the assessee in the profit and loss account. The CIT(A) following his order for A.Y. 2003-04 deleted the addition of ₹ 1,76,99,057/-. On further appeal by the Revenue, the Tribunal restored the issue to the file of the AO with a direction to adjudicate the issue in the light of the decision of Hon ble Supreme Court in the case of Southern Technologies Ltd. Vs. JCIT repo .....

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in assessee s own case for A.Y. 2007-08 to 2010-11, copies of which are placed in the paper book, has decided the issue in favour of the assessee and the appeal filed by the Revenue on this issue has been dismissed. 13. The Ld. Departmental Representative on the other hand fairly conceded that the issue has been decided in favour of the assessee and against the Revenue by the order of the Tribunal in assessee s own case for A.Yrs. 2007-08 to 2010-11. 14. After hearing both the sides, we find th .....

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me relating to certain hire purchase transactions did not accrue to the assessee because such transactions were classified as NPAs following the RBI guidelines. When the matter came up for the first time before the Tribunal for assessment years 1996-97 to 1999-2000 and 2000-01 to 2003-04, vide a common order dated 31.03.2010 the issue was remanded back to the file of the Assessing Officer to be considered in the light of the judgement of the Hon ble Supreme Court in the case of Southern Technolo .....

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so requiring the Assessing Officer to take into consideration such other legal position as prevailing at the time of ensuing remand proceedings . The aforesaid direction was in the context of the judgements of the (i) Hon ble Delhi High Court in the case of M/s Vasisth Chay Vyapar Ltd. (supra) and Brahamputra Capital Financial Services Ltd. (supra); and, (ii) decision of the Pune Bench of the Tribunal in the case of Alfa Laval Financial Services Ltd. (supra), which was cited before the Tribunal. .....

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t there is no accrual of income in relation to assets which are classified as NPAs in terms of RBI guidelines. In this context, the CIT(A) has factually concluded that the amount of ₹ 12,87,37,505/- pertains to interest on NPAs. This finding of the CIT(A) is not disputed by the Revenue. In the background of this undisputed factual position, now we have to examine the ultimate conclusion of the CIT(A). As per the CIT(A), unrecognized income on NPAs classified in terms of RBI guidelines cann .....

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ground, the learned counsel for the assessee is justified in arguing that no useful purpose would be served by remanding the issue back to the file of the Assessing Officer following the orders of the Tribunal of earlier years. In the present year, as our aforesaid discussion shows, the factual findings of the CIT(A) regarding the nature of the impugned is not disputed, and, the legal position articulated by the CIT(A) has also not been assailed by the Revenue on the basis of any contrary judgem .....

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f the Tribunal in assessee s own case for A.Yrs. 2007-08 and 2008-09 the Tribunal in ITA Nos. 560 and 561/PN/2014 and ITA Nos. 578 and 579/PN/2014 order dated 11-04-2016 for A.Yrs. 2009-10 and 2010-11 has decided the issue in favour of the assessee, copies of which are placed in the paper book. 16. Since the facts of the impugned assessment year are identical to the facts decided by the Tribunal in the subsequent assessment years, therefore, respectfully following the order of the Tribunal and i .....

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(SC) which says that provisions of RBI Act cannot override the provision of Sec.145 of the Income Tax Act, since both the Acts operate in different fields and therefore assessee cannot recognize interest income on NPA and yet not offer it in profit and loss account. 1(b) Whether on the facts and circumstances of the case and in law, the CIT(A) was justified in not considering the fact that the special provisions of section 43D are applicable only to Financial Institutions and Co-op. Banks wherea .....

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as under: 1(a) Whether on the facts and circumstances of the case and in law, the CIT(A) was correct in disregarding the judgment of Hon ble Supreme Court given in the case of Southern Technologies Ltd. Vs. JCIT 320 ITR 577 (SC) which says that provisions of RBI Act cannot override the provision of Sec.145 of the Income Tax Act, since both the Acts operate in different fields and therefore assessee cannot recognize interest income on NPA and yet not offer it in profit and loss account. 1(b) Whet .....

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grounds raised by the Revenue have been dismissed. Following the same reasonings, the above grounds by the Revenue are dismissed. ITA No.2097/PN/2014 (By Revenue) (A.Y. 2011-12) : 21. Grounds of appeal No. 1(a) and 1(b) by the Revenue read as under: 1. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) was justified in restricting the A.O.'s disallowance u/ s 14A of the Act to ₹ 50,000/- by relying on the Hon'ble ITAT's decision in assessee's own .....

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company was not maintaining any record through which such expenditure could be identified. 22. After hearing both the sides, we find the above grounds are identical to grounds of appeal No.2(a) and 2(b) in ITA No.2094/PN/2014 for A.Y. 2004-05 filed by the Revenue. We have already decided the issue and the grounds raised by the Revenue have been dismissed. Following the same reasonings, the above grounds by the Revenue are dismissed. 23. Grounds of appeal No.2(a) and 2(b) by the Revenue read as u .....

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Whether on the facts and the circumstances of the case and in law the CIT(A) was justified in not considering the fact that the special provisions of section 43D are applicable only to Financial Institutions and Co-op. Banks whereas the assessee falls under the category of Domestic Company. 24. After hearing both the sides, we find the above grounds are identical to grounds of appeal No.1(a) and 1(b) in ITA No.2094/PN/2014 for A.Y. 2004-05 filed by the Revenue. We have already decided the issue .....

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n the relevant fund and not before the due date of filing of return of income? 26. After hearing both the sides, we find the AO made addition of ₹ 4,30,854/- on account of delay in the payment of Employees contribution to PF. While doing so, he rejected the contention of the assessee that the same has been paid before the due date of filing of the return of income u/s.139(1) of the Act. In appeal the Ld.CIT(A) following the decision of Hon ble Gujarat High Court in the case of Gujarat Stat .....

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se of CIT Vs. Hindustan Organics Chemical Ltd.(Supra) and in the case of CIT Vs. Ghatge Patil Transports Ltd. reported in 368 ITR 749 are consistently taking the view that disallowance u/s.43B cannot be made on account of delayed payment of Employees contribution to PF and ESI, if the same has been deposited before the due date of filing of the return u/s.139(1) of the I.T. Act. Since the assessee in the instant case has admittedly deposited the Employees contribution to PF before the due date o .....

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respect of ESOP of ₹ 2,60,65,287/- ought to be allowed as a deduction u/s.37(1) of the Act. 2. ADDITIONAL CLAIM FOR DISCOUNT ON ISSUE OF ESOP u/s.37(1) OF THE ACT BASED ON EXERCISE OF OPTIONS OF ₹ 2,29,063/-. The Respondent submits that the incremental expenditure of ₹ 2,29,063/- in respect of the excess amount charged in the hands of employees as perquisite on exercise of stock options during A.Y. 2011- 12 (Rs.3,55,687/-) as compared to the fair value of discount claimed by th .....

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und and restored the issue to the file of the AO. The Ld. Counsel for the assessee accordingly submitted that since all the facts are already there on the records of the Department and no fresh facts are required to be verified, therefore, in view of the decision of the Tribunal in assessee s own case in the immediately preceding assessment year, the ground may be admitted and the matter may be restored to the file of the AO for deciding the issue in the light of the decision of the Tribunal. 30 .....

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nt of claim of deduction in respect of Employee Stock Options (ESOP) expenditure of ₹ 1,33,64,340/-. The ld. AR submitted that the assessee is a listed company and issued stock options with a ceiling of 5% of the issued equity capital of the company to its employees pursuant to Employee Stock Option Scheme 2009. The said scheme was formulated in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) guidelines, 1999. The assessee as a matter of abundant .....

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assessee raised this issue first time before the Tribunal. The ld. DR submitted that the expenditure was never claimed by the assessee. Therefore, the same is not allowable. 34. Both sides heard. It is an admitted fact that the assessee has claimed ESOP expenditure for the first time before the Tribunal. The Hon'ble Supreme Court of India in the case of Goetze (India) Ltd. Vs. CIT has held that the powers of the Appellate Tribunal are not impinged to accept the claim of assessee which has no .....

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see is allowed for the statistical purpose. 32. Since the facts of the impugned assessment year are identical to the facts in the case for A.Y. 2010-11, therefore, following the order of the Tribunal in assessee s own case in the immediately preceding assessment year, we restore the issue to the file of the AO with a direction to adjudicate the issue in the light of the direction of the Tribunal in A.Y. 2010-11. The grounds raised by the assessee in the Cross Objection are accordingly allowed fo .....

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IT(A). However, the assessee has raised this ground in the Cross Objection. It was submitted that similar issue was raised by the assessee in A.Y. 2010-11 as additional ground vide Additional Ground No.5. The Tribunal vide ITA No.579/PN/2014 order dated 11-04-2016 has admitted the additional ground and restored the issue to the file of the AO. The Ld. Counsel for the assessee accordingly submitted that since all the facts are already there in the records of the Department and no fresh facts are .....

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