TMI Blog2018 (4) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... aw in this regard. CBDT circular N.772 Dt 23.12.1998 also clarify the object of insertion of section 145A. Anyhow, both the plea seems to justifiable but the unutilized MODVAT credit of ₹ 5,37,826/- is not the income of the assessee, therefore, the same is not liable to be added as income of the assessee. Accordingly, we delete the said addition and decide this issue in favour of the assessee against the revenue. Disallowance of Professional Fees - Held that:- No other document has been placed on record in support of this contention. Since, the company is related company and no working of any kind was given to the assessee company for the investment in 7 companies nor produced before us. The assessee entered into F&O transactions by making purchase only on 18.06.2007 and making sale on 20.10.2007, 23.10.2007 & 25.10.2007.The transaction was carried out only on 10-11 different dates which are few transactions. The assessee paid of ₹ 22,94,400/- which was considered as unreasonable. The assessee nowhere submitted about the reasonableness of the fees and comparable fees with other chart by unrelated parties hence, the Professional Fees seems to be rightly disallowed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the Commissioner(A) on the aforesaid issues is bad in law and without jurisdiction. 7. Your appellant craves leave to add to, alter, amend or delete any of the foregoing ground of appeal. 3. The brief facts of the case, are that the assessee filed its return of income for the A.Y. 2008-09 on 29.09.2008 declaring net loss of (-) ₹ 3,40,16,174/-. The case was selected for scrutiny. Therefore, notice u/s 143(2) of the I.T. Act, 1961 dated 17.08.2009 was issued and served upon the assessee. Subsequently, notice u/s 142(1) was also issued and served upon the assessee. The assessee company was engaged in the business of Manufacturing of Automobile Forgings, automobile auto parts. On verification, it was noticed that the assessee has shown exempt dividend income to the tune of ₹ 10,23,241/- but no disallowance u/s 14A of the Act was made. Thereafter, the notice was given and after getting the reply the expenditure to incur the exempt income was assessed to the tune of ₹ 6,05,122/-. It was also noticed that on dated 31.03.2008 there was unutilized MODVAT credit of ₹ 5,37,826/-. Thereafter, the notice was given to the assessee and after the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal is hereby reproduced below:- We have considered the rival contention and also perused the material available on record. We have observed that the assessee has received dividend income of ₹ 10,19,208/- which income was claimed as exempt from tax u/s 10(34) of the Act. The assessee has made investment in mutual funds and in the shares of listed public limited companies. The assessee s investments as on first day of the previous year were ₹ 702.99 lacs and the act day of the previous year was ₹ 469.80 lacs. The AO has applied Rule 8D of the I.T. Act, Rules, 1962 while computing disallowance u/s 14A of the Act of the expenditure incurred in relation to earning of exempt income, however, as per the decision of Hon ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. Vs. CIT, (2010) 328 ITR 81 (Bom) wherein it was held that Rule 8D of I.T. Rules, 1962 cannot be applied for the A.Y. 2007-08 and earlier years for computing disallowance u/s 14A of the Act of the expenditure incurred in relation to earning of exempt income in view of decision of Hon ble Bombay High Court in the case of Godrej and Boyce Manufacturing Company limited (supra). However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmation of addition of unutilized MODVAT credit of ₹ 5,37,826/-. The unutilized MODVAT credit is not the income in view of the provision u/s 145A. However, the assessee took the relevant plea that if the said amount has been treated as the income then the same be adjusted in the opening stock of subsequent year. Delhi high court in case of CIT v/s Mahavir aluminum Ltd interpreted the Law in this regard. CBDT circular N.772 Dt 23.12.1998 also clarify the object of insertion of section 145A. Anyhow, both the plea seems to justifiable but the unutilized MODVAT credit of ₹ 5,37,826/- is not the income of the assessee, therefore, the same is not liable to be added as income of the assessee. Accordingly, we delete the said addition and decide this issue in favour of the assessee against the revenue. ISSUE NO.3:- 7. Under this issue the assessee has challenged the confirmation of disallowance of Professional Fees to the tune of ₹ 22,94,400/-. The Ld. Representative of the assessee has argued that the assessee engaged M/s Viniyog Investment Trading Co. Pvt. Ltd., for financial consultancy, investment in Inter Corporate Deposits (ICDs) and also other finan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
