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Deep Industries Ltd. Versus The Addl. Commissioner of Income Tax, Ambawadi, Ahmedabad and Vica-Versa

2016 (12) TMI 401 - ITAT AHMEDABAD

Disallowance of sum incurred in order to increase assessee’s authorized share capital - Held that:- This sum comprises of franking charges of ₹ 1,77,500/- for filing Form V followed by the letter head of filing fees amounting to ₹ 25000/-. Both the lower authorities quote hon’ble apex court’s decision in Brooke Bond India vs. CIT (1997 (2) TMI 11 - SUPREME Court ) as followed in case of M/s. Vareli Textiles Industries vs. CIT (2006 (2) TMI 102 - GUJARAT High Court ). Learned counsel .....

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serves to be added so as to ensure compliance of this rule. We observe in these facts that this action on part of both the lower authorities goes contrary to the above stated Rule. It mainly talks about credit for TDS deduction at source and paid to the Central Government for the assessment year for which such income is assessable and not vice versa since the authorities below rather added the income in the impugned assessment year. We further notice that clause (ii) of sub-Rule 3 of Rule 37BA e .....

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ere is no such circumstance. We thus conclude that the impugned addition is not sustainable. The same stands deleted. - Section 14A disallowance comprising of proportionate interest and administrative expense - Held that:- Jurisdictional high court’s decision in CIT vs. Torrent Power Ltd. (2014 (6) TMI 185 - GUJARAT HIGH COURT ) and CIT vs. Suzlon Energy Ltd.[2013 (7) TMI 697 - GUJARAT HIGH COURT] deleting identical disallowances in case of surplus interest free funds. Ld. Departmental Repre .....

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he case. We notice in this backdrop that hon’ble jurisdictional high court in PCIT vs. India Gelatine & Chemicals Ltd. (2015 (11) TMI 392 - GUJARAT HIGH COURT ) upholds tribunal’s order deleting administrative expenditure disallowance in similar circumstances. We draw support therefrom to delete this component of the impugned Section 14 disallowance as well. - Allowability of enhanced deduction u/s.35B over and above the original claim made in the return of income - Held that:- The instant .....

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does not impinge upon jurisdiction of appellate authorities including this tribunal under the provisions of Income Tax Act. We thus reject this Revenue’s appeal on merits as well. - ITA No.247 /Ahd/2014, ITA No. 444/Ahd/2014 - Dated:- 30-11-2016 - SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER For The Assessee : Shri Tushar Hemani with P. B. Parmar, A.R. For The Reveneu : Shri Prasoon Kabra, Sr. D.R. ORDER PER S. S. GODARA, JUDICIAL MEMBER The assessee and Revenue .....

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ssee s authorized share capital. This sum comprises of franking charges of ₹ 1,77,500/- for filing Form V followed by the letter head of filing fees amounting to ₹ 25000/-. Both the lower authorities quote hon ble apex court s decision in Brooke Bond India vs. CIT 225 ITR 798 (SC) as followed in case of M/s. Vareli Textiles Industries vs. CIT (2006) 284 ITR 238 (Guj.). Learned counsel for the assessee vehemently argues in favour of assessee s grievance pleaded in the instant ground. .....

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r income. The assessee s letter dated 19.10.2010 clarified the said short fall as under: Sr.No. Particulars Amount(Rs.) 1. Selan Exploration Technology Ltd. 9000 Income is of March 2007 accounted in FY 2006-07 but TDS deducted by Selan in FY 2007-08. We enclose herewith copy of Income voucher and: account of 2006-07 as per Annexure-1 2. Indian Oil Corporations Ltd; The said difference is mainly due to 3 reasons i. income of February 2007 accounted in by IOC in FY 2007-08 We enclose and account o .....

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ear. We came to know about bill clearance only at the time of receipt of TDS certificate, Payment for the said bill was also received in May 2008 so we have accounted the same in April 2008. Since the tax rate for FY 2007-08 and FY 2008-09 are same and there is no intention to escape income, we request you to consider the difference. 4. The Assessing Officer quoted Section 199 r.w. Rule 37BA(3) of the Income Tax Rules to conclude that credit of TDS deduction is to be given in assessment year in .....

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cceeding assessment year. The CIT(A) directs the assessing authority to verify this plea and rectify assessment in assessee s case for the said assessment year to the extent of the impugned sum in order to avoid double taxation. 6. We have heard both the parties. Learned counsel submits that Section 199 of the Act stands amended w.e.f. 01.04.2008 as applicable in the impugned assessment year. His case is that this amended statutory provision provides that if TDS is deducted and paid to the gover .....

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ished any more. 7. The Revenue strongly supports the CIT (A) s order upholding Assessing Officer s action. 8. Heard both sides. Case file perused. There is no dispute about the fact that the assessee s income in question has been admittedly subjected to TDS deduction in the impugned assessment year despite the fact that it has not declared its entire receipt as income of the relevant previous year. Both the lower authorities quote Section 199 of the Act r.w. Rule 37BA (3) of the Income Tax Rules .....

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inabove for the purpose of giving credit of TDS deducted or taxes paid and also the assessment year for which such credit may be given. 9. We proceed further and come to Rule 37BA of the Income Tax Rules in its amended avatar w.e.f. 01.04.2009. A co-ordinate bench of this tribunal in Parmanand Tiwari vs. ITO ITA No.2417/Kol/2013 holds that this amended rule is retrospectively applicable from 01.04.2008 being clarificatory in nature in order to remove difficulty. We reiterate that we are in asses .....

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a since the authorities below rather added the income in the impugned assessment year. We further notice that clause (ii) of sub-Rule 3 of Rule 37BA envisages that credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. We repeat once again that this clause no where prescribes addition of income component since dealing with TDS credit issue only. We rather observe that these expressions make it clear that main endeavo .....

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ly. The assessee s dividend income is ₹ 1,29,31,565/-. It claims to have not incurred any expenditure regarding the same. The Assessing Officer does not appear to have recorded any satisfaction qua this objection after having regard to assessee s books stipulated in Section 14A(2) of the Act and computed the corresponding disallowance as indicated hereinabove. The CIT(A) affirms Assessing Officer s action. 11. We have heard both the parties. The assessee s first argument is that it had suf .....

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roportionate interest disallowance of ₹ 1,93,297/- is not sustainable. The same stands deleted. 12. We now come to administrative expenses component of ₹ 8,58,317/-. There is no dispute that the Assessing Officer has not rebutted assessee s main contention to have not incurred any administrative expenditure in earning the dividend income in question. Neither of the lower authority rebuts this contention by referring to facts of the case. We notice in this backdrop that hon ble jurisd .....

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