TMI Blog2018 (6) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... the commission payment of ₹ 8.7 Lakhs on the ground that the liability is only provisional and not ascertained liability - we do not see any reason to interfere with order of CIT(A). Set off and carry forward of unabsorbed depreciation - Held that:- The case shall be dealt in accordance with the provisions of Section 32(2) of the Act as amended by the Finance Act, 2001 and not by the provisions of Section 32(2) of the Act as it stood before the said amendment - thus the issue is decided in favor of assessee following the judgement in case of GENERAL MOTORS INDIA PVT. LTD Versus DEPUTY COMMISSIONER OF INCOME-TAX [2012 (8) TMI 714 - GUJARAT HIGH COURT] - appeal of revenue is dismissed. Additions made on account of reconciliation of interest as per data available in AIR - Held that:- We consider it expedient to set aside the issue back to the file of the AO for re-examination of facts. The assessee shall provide the reconciliation of difference in question and shall support its claim of taxability in one or the other year. The AO shall adjudicate the issue in accordance with law after proper opportunity given to the assessee in this regard - allowed for statistical purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad has erred in law and on facts in restricting the disallowance made on account of disallowance of commission expenses at ₹ 8.7 lacs/- as against the disallowance made by the AO at ₹ 3553269/- . 4). The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in directing to allow the set off and carry forward of depreciation . 5). On the facts and in the circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad ought to have upheld the order of the Assessing Officer. 6) It is therefore, prayed that the order of the Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad may be set-aside and that of the order of the Assessing Officer be restored. 3. When the matter was called for hearing, the learned AR for the assessee pointed out in the Revenue s appeal that ground no.1 relates to adjustment on account of disallowances made u/s. 14A (under the normal provisions of the Act) for the purposes of special provisions of Section 115JB of the Act concerning taxability on the basis of book profits. The learned AR pointed out that the issue is no longer res integra and is covered in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the aforesaid discussion, ground no.1 of the Revenue s appeal is dismissed. 4. Ground no.2 relates to addition of ₹ 2,90,28,909/- made by the AO u/s.145A, which was deleted by the CIT(A). The learned AR submitted that the aforesaid ground represents addition on account of unutilized CENVAT/MODVAT credit, which is not permissible in view of the principles laid down by the hon ble Gujarat High Court in case of CIT vs. Bell Granito Ceremica Ltd., Tax Appeal Nos. 436-437 of 2011, judgment dated 13.06.2012. The learned AR next submitted that the CIT(A) has correctly concluded the issue in favour of the assessee also having regard to the fact that effect of provisions of Section 145A would be nil in the case of assessee. We find that the CIT(A) has analyzed the issue objectively in detail as per para 5 of its order. The conclusion drawn by the CIT(A) is in consonance with the decision of the hon ble Gujarat High Court in case of Bell Grantio (supra). We also take note of the decision of the hon ble Gujarat High Court in the case of Pr.CIT vs. Oracle Granito Pvt. Ltd., Tax Appeal No. 1030 of 2017, order dated 14th February, 2018, which supports the case of the assessee square ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt's appeal before him challenging the validity of the assessment order impugned before him, by observing that the assessment order had been passed after giving adequate opportunity of hearing to the respondent, even as the respondent's challenge to the assessment order was primarily on the ground that it had been passed without application of mind. 2. In law and in the facts and circumstances of the respondent's case, the learned CIT(A) has grossly erred in sustaining the addition of ₹ 10,66,376 on account of interest income from banks on the ground that the respondent had not reconciled the difference in the amounts of interest as per the AIR and the corresponding amount accounted in the respondent's books. 3. In law and in the facts and circumstances of the respondent's case, the learned CIT(A) has grossly erred in upholding the disallowance of ₹ 39,502 on account of interest expense and of ₹ 5,68,828 on account of administrative expenditure made u/s. 14A read with Rule 8D, on the ground: (a) that the respondent had failed to demonstrate that its investments in tax-free income producing assets had been made from interest-fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue in accordance with law after proper opportunity given to the assessee in this regard. The ground no.2 of the cross objection is thus allowed for statistical purposes. 13. Ground no.3 concerns disallowance of ₹ 6,08,330/- under s.14A read with Rule 8D of the Income Tax Rules. The disallowance under Rule 8D comprises of ₹ 39,502/- on account of interest expenses and ₹ 5,68,828/- on account of administrative expenses. The AO observed that assessee has made huge investments and earned substantial exempt income of ₹ 97,68,386/-. The assessee has made a suo motu disallowance of ₹ 8000/- attributable to exempt income. However, The AO re-computed the disallowance by applying Rule 8D of the Income Tax Rules amounting to ₹ 6,08,330/-. As regards disallowance on proportionate interest component, we find merit in the plea of the assessee that in view of the substantial own funds available at the disposal of the assessee in excess of the corresponding investments giving rise to tax free income. There is no warrant for making disallowance in view of long line of judicial precedent. However, we do not see any merit for setting aside the disallowance tow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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