TMI Blog2018 (9) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee by the Tribunal for A. Y. 2007-08 in assessee s own case wherein the ratio of the Hon ble Apex Court in case of United Glass Manufacturing Co. Ltd. (2012 (9) TMI 914 - SUPREME COURT) has been followed. - ITA No. 6394/DEL/2013, ITA No. 2768/DEL/2015, ITA No. 2100/DEL/2015, ITA No. 3532/DEL/2016 And ITA No. 2854/DEL/2016 - - - Dated:- 5-9-2018 - SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. V. P. Gupta, Advocate For The Respondent : Sh. Smt. Meeta Singh, CIT DR Sh. Arun Kumar Yadav, Sr. DR ORDER PER SUCHITRA KAMBLE, JM These appeals are filed by the Revenue as well as by the assessee against the orders dated 06/09/2013, 27/02/2015 and 21/03/2016 passed by CIT(A)- XV, New Delhi for A. Ys. 2009-10, 2010-11 and 2011-12 respectively. 2. The grounds of appeal are as under:- ITA No. 6394/DEL/2013 Revenue s appeal (A. Y 2009-10) 1. Whether Ld. CIT (A) was correct on facts and circumstances of the case and in law in deleting the addition of ₹ 9, 91, 48, 048/- made by the AO u/s 14A r. w. r 8D ? 2. Whether Ld. CIT (A) was correct on facts and circumstances of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses The tax was paid under MAT by the assessee. ₹ 11, 25, 761/- 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee. 5. The Ld. DR relied upon the order of the Assessing Officer and submitted that the CIT(A) has wrongly deleted the additions made by the Assessing Officer for Assessment Year 2009-10. 6. The Ld. AR submitted that as regards Ground No. 1 of the Revenue s appeal relating to disallowance u/s 14A read with Rule 8D of the Income Tax Rules, a statement giving figures of investments own funds exempt income, disallowance made by the Assessing Officer and by the company in A. Y. 2008-09 and 2009-10 was produced. The facts of the case are identical to the facts of A. Y. 2008-09 wherein the Hon ble Delhi High Court in case of H. T. Media Ltd. Vs. Principal CIT (2017) 399 ITR 576 held that in the facts of the case no disallowance on account of interest is called for and disallowance made by the company of ₹ 3 lac on account of administrative expenses is to be upheld, since the Assessing Officer had not recorded any satisfaction. The Ld. AR also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed. Thus, Ground No. 2 is dismissed. 13. As regards to Ground No. 3 wherein the issue involved is that of allowability of additional depreciation on computer and computer software i. e. computer to plate (CTP). This issue is covered in favour of the assessee by the Tribunal in assessee s own case for A. Y. 2008-09. Thus, Ground No. 3 is dismissed. 14. As regards to Ground No. 4, the same is relating to allowability of club expenses. This issue is covered in favour of the assessee by the Tribunal for A. Y. 2007-08 in assessee s own case wherein the ratio of the Hon ble Apex Court in case of United Glass Manufacturing Co. Ltd. (Supra) has been followed. Thus, Ground No. 4 is dismissed. 15. In result, ITA No. 6394/Del/2013 filed by the Revenue is dismissed. 16. Now we are taking up the appeals for A. Y. 2010-11 filed by both Revenue as well as by the assessee. The grounds of both the appeals are as follows: ITA No. 2768/DEL/2015 REVENUE S APPEAL ( A. Y. 2010-11) 1. Whether on the facts and circumstances of the case in law, the Id. CIT(A) erred in deleting the disallowance of ₹ 12, 16, 48, 060/- made u/s 14A r. w. r. 8D. 2. Whether on the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany remained the same as that of the earlier assessment year 2009-10. The assessee filed return on 02. 10. 2010 declaring income at Rs ₹ 150, 69, 31, 790/-. The Assessing Officer assessed the assessee at an income of ₹ 158, 60, 20, 100/- after making following additions/disallowances: S. No. Particulars Amount (in Rs. ) 1 Disallowance u/s 14A read with Rule 8D 9, 47, 71, 607/- 2 Disallowance of training expenses 1, 08, 50, 266/- 3 Disallowance of depreciation on computer Peripherals claimed @ 60% 5, 71, 421/- 4 Disallowance of Club expenses 17, 72, 651/- 5 Disallowance of Royalty Copyright charges 2, 68, 45, 425/- 18. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) upheld the disallowance u/s 14A read with Rule 8D to the extent of ₹ 82, 23, 500/-. The CIT(A) delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in case of assessee and of the decision of Hon ble Supreme Court in the case of Godrej Boyce. Therefore, the Ld. AR submitted that the disallowance has to be restricted to ₹ 5, 45, 000/- on the ground that the Assessing Officer and the CIT(A) have not given any finding as to how the aforesaid amount of disallowance made by the company was not correct. The Ld. AR relied upon the decision of Hon ble Delhi High Court in the case of Pr. CIT v. U. K. Paints (India) (P) Ltd. 21. In the alternative and without prejudice to above the submission, the Ld. AR further submitted that average amount of investment on which exempt income was received during the year works out to ₹ 133. 50 crores (38. 50 + 228. 50 = 267 2) , the details are given on page 4 of the order of the CIT(A). On this basis the disallowance works out to ₹ 66. 75 lacs. The Ld. AR relied upon the decision of Hon ble Delhi High Court in the case of ACB India Ltd. v. ACIT (2015) 374 ITR 108 (Del) and recent decision of the Tribunal in the case of Federal Mogul Goetze India Ltd. v. DCIT decided on 27. 06. 2018. 22. As regards appeal of Department, relating to Ground No. 1 for disallowance u/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate analysis carried out by the AO - as indeed the three important steps indicated by him in the order, shows that all these elements were present in his mind, that he did not expressly record his dissatisfaction in these circumstances, would not per se justify this Court in concluding that he was not satisfied or did not record cogent reasons for his dissatisfaction to reject the AO's conclusion. To insist that the AO should pay such lip service regardless of the substantial compliance with the provisions would, in fact, destroy the mandate of Section 14A. 24. We have heard both the parties and perused all the material available on record. The contention of the Ld. AR that there is no satisfaction recorded by the Assessing Officer while invoking Section 14A read with Rule 8D. We have gone through the decision of the Hon ble Delhi High Court in case of India Bulls Financial Services Ltd. (supra) as well as the Assessee s own case. The satisfaction of the Assessing Officer is seen from the three steps taken by him in Assessment Order regarding the invocation of Section 14A read with Rule 8D. But at the same time, the Assessing Officer failed to take the cognizance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Co. Ltd. 26. The Ld. DR relied upon the Assessment Order but could not controvert the decision of the Tribunal for A. Ys. 2007-08 and 2008-09 passed by the Tribunal. 27. We have heard both the parties and perused all the relevant records. The of disallowance on account of training expenses is covered in favour of the assessee company vide orders of Tribunal for AYs 2007-08 and 2008-09 wherein similar ground of department was dismissed following the decision of the Hon ble Delhi High Court in case of CIT v. Solus Pharmaceuticals Ltd. The Department also accepted the decision of the CIT(A) on this issue in A. Ys. 2009-10 and 2011-12 in which years ground in this regard was not taken in the appeals filed. This issue is also covered by the judgment of Delhi High Court in the case of H. T. Music Entertainment Co. Ltd. Therefore, Ground No. 2 of the Revenue s appeal is dismissed. 28. As relating to Ground No. 3 of the Department s appeal regarding allowability of club expenses, the Ld. AR submitted that this Ground is similar to Ground No. 4 of the Department s appeal for Assessment Year 2009-10 and is covered in favour of the assessee company vide order of Tribunal for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act was not appropriate in the facts and circumstances of the case. 4. Without prejudice to earlier grounds, the CIT(A) also erred in not directing the AO to allow adjustment of ₹ 100, 000/- already added by the Appellant in computation of taxable income against the amount of disallowance of ₹ 4, 935, 000/- determined by him and make net addition of only ₹ 4, 835, 000/-. 33. The assessee filed its return of income on 28. 09. 2011 declaring an income of ₹ 2, 203, 788, 719 which was subsequently revised on 30. 03. 2013 at an income of ₹ 2, 203, 787, 098. The assessment was completed by the Learned Assessing Officer under section 143(3) of the Income Tax Act, 1961 vide order dated 21. 03. 2014 at an income of ₹ 2, 301, 766, 450. 34. The Ld. DR as well as the Ld. AR submitted that the issues are identical to the Assessment Year 2010-11. 35. We have heard both the parties and perused all the relevant material available on record. Ground No. 1 of the Revenue s appeal and Ground No. 1 to 4 of the Assessee s appeal are identical to Ground No. 1 of the Revenue s appeal and Ground No. 1 to 5 of the Assessee s appeal for A. Y. 2010-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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