TMI Blog2015 (10) TMI 2739X X X X Extracts X X X X X X X X Extracts X X X X ..... ies - Held that:- Similar issue had come up before the Tribunal and the Tribunal following the decision rendered in the case of Jamshri Rajitsinghji Spinning and Weaving Mills Limited V/s Inspecting Assistant Commissioner [1991 (12) TMI 83 - ITAT BOMBAY-A] has decided this issue in favour of the assessee. The facts being the same and consistent with the view so take by this Tribunal in earlier year, we allow the claim of the assessee for this year too. Addition being pooja expenses - Held that:- This is an allowable expenditure. Accordingly, we allow the claim of the assessee. Payment to relatives of deceased employees - Held that:- We are of the considered opinion that the issue raised by the assessee in these grounds stands covered in favour of the assessee. To maintain consistency with the decision taken by the Tribunal in earlier years, we allow taken by the assessee for this year also and direct the AO to allow deduction. Reduce the claim of depreciation on total scrap sales - Held that:- We find that the assessee has claimed depreciation on total scrap sales which comprises different type of the assets. The assessee failed to produce value of each assets on which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed interest @ 15 percent on the following amounts advanced to the following parties: Sr. No. Parties Amount (Rs.) (a) Ibiza Industries Ltd 25,50,000 (b) Mayesh Chemicals P. Ltd. 33,25,000 (c) Mafatlal S .A. Intex Ltd. 2,04,20,095 (d) Mafatlal V.K. Intex Ltd. 38,00,000 (e) Repal Apparel P. Ltd. 75,76,557 (f) Silvia Apparel Ltd. 80,00,000 (g) MEIL by Mafatlal Fine Spg. 2,77,50,000 (h) MEIL 3,91,15,000 Total 11,25,36,652 2. Without prejudice, the learned Commissioner (Appeals) ought to have appreciated that interest on advances to MEIL was to accrue only after all the dues of the financial institutions had been paid and that the question of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute book during the previous year relevant to the assessment year 1999-00 and therefore the same could not be applied. Valuation of closing stock 10. The learned Commissioner (Appeals) erred in confirming addition of estimated amount of ₹ 25,00,000 on account of valuation of closing stock of finished goods. Stamp duty payable on amalgamation 12. The learned Commissioner (Appeals) erred in not directing the Assessing Officer to allow the deduction for stamp duty payable on amalgamation in the year in which the same has been paid. Exchange Gain 11. The learned Commissioner (Appeals) erred in not excluding the exchange gain of ₹ 985.52 lacs from the total income. 10. The learned Commissioner (Appeals) ought to have appreciated the position taken by the Assessing Officer in the assessment for the assessment year 1998-99. Capital Expenditure incurred on scientific research 11. The learned Commissioner (Appeals) erred in not specifically directing the Assessing Officer to allow the capital expenditure on scientific research of ₹ 74,51,457. Interest on securities 13. The learned Commissioner (Appeals) erred in confirming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oupons issued to the shareholders. 23. The learned Commissioner (Appeals) ought to have appreciated the fact that the expenditure incurred on cloth coupons was a normal business expenditure incurred wholly and exclusively for the purpose of business. Setting off the Expenses against dividend income 25. The learned Commissioner (Appeals) erred confirming the action of the Assessing Officer in estimating disallowing expenses of ₹ 3,50,98,649 and setting off the same against dividend income. 26. The learned Commissioner (Appeals) ought to have appreciated that the learned Assessing Officer had not established any nexus and therefore the expenditure of ₹ 3,50,98,649 cannot be set off against the dividend income. Expenses in respect of House Property. 27. The learned Commissioner (Appeals) erred in confirming the action of the Assessing Officer in restricting the appellant's claim for deduction for repairs and maintenance at 25 per cent of ₹ 34,76,882 as against 25 per cent of ₹ 67,86,676 claimed by the appellant in the return of income. Carry forward of losses 28. The learned Commissioner (Appeals) erred in not specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent laid down by the Hon ble Apex Court in S.A.Builders, reported in 288 ITR 1(SC). Therefore, this being identical issue, the same view may be taken as taken earlier by this Tribunal. 9. The ld. DR did not object to the plea put forth by the ld.AR. 10. After hearing both the parties and on perusal of the record, we find that the similar issue had come up before this Tribunal in assessee s own cases in the assessment years (supra) and the Tribunal has restored this issue to the file of AO for fresh adjudication. Accordingly, we set aside the order of ld.CIT(A) on this issue and restore the same to the file of AO to decide the issue denovo. Ground No.1 is allowed for statistical purposes. 11. The second issue pertain to the disallowance of balance 4.5th deferred revenue expenditure in the next four years in accordance with the provisions of section 35DDA; deferred revenue expenditure. The factual matrix of this are that the assessee has claimed deduction deferred revenue expenses of ₹ 2,22,21,08,642/- on account of voluntary retirement scheme, retrenchment compensation and ex-gratia payment. The AO called for the explanation from the assessee and on being scrutiny the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimated import duty benefit. The AO added the same to the total income of the assessee as the similar additions were made in the past in assessee s own cases. 18. In the appellate proceeding, the ld.CIT(A) admitted the contention of the assessee and restored the issue to the file of the AO with a direction to allow the same in the years in question a when claimed by the assessee. Being aggrieved by this the assessee is in appeal before this Tribunal. 19. At the time of hearing, the ld.AR submitted that the similar issue had come up before the Tribunal and the Tribunal following the decision rendered in the case of Jamshri Rajitsinghji Spinning and Weaving Mills Limited V/s Inspecting Assistant Commissioner reported in 41 ITD 142)(Mum) has decided this issue in favour of the assessee. The facts being the same and consistent with the view so take by this Tribunal in earlier year, we allow the claim of the assessee for this year too. Ground No.14 taken by the assessee allowed. 20. The AO made the addition of ₹ 2,30,445/- by rejecting the claim of the assessee being pooja expenses on the ground that the revenue was disallowing the same on the ground that CIT(A) confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ron division for a slump consideration of ₹ 1546.24 lacks. Profit of ₹ 264.09 was reduced from the same. In the assessment proceedings, the AO reduced the WDV of the assets transferred ₹ 5,46,25,060/- from the sale consideration of ₹ 15,46,24,000/- and again reduced 25% of the balance amount of ₹ 99,99,89,940/- i.e. ₹ 2,49,99,735/-. The assessee was called for to explain the exact value of the assets forming the part of the block assets and then claim depreciation. The assessee did not satisfy the AO and accordingly, the AO reduced the depreciation as mentioned above. In the first appellate proceedings, the ld. CIT(A), by following the decision of Hon ble Supreme Court in M/s Artex Manufacturing Company reported in 227 ITR 260 (SC) upheld the action of the AO. Therefore, the assessee is in appeal before us. 29. Before us, the ld.AR submitted that an Identical issue had come up before this Tribunal in assessee s own case for the assessment year 1997-98 and the Tribunal has set aside this issue to the file of the AO for fresh adjudication in the light of the Tribunal order. In support of this contention, he placed reliance on the following decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prayed that orders of authorities below be upheld. 37. After hearing both the parties and on perusal of the record, we find that the decision taken by theld.CIT(A) is well reason and accordingly we confirm his action. Grounds No.23 and 24 are accordingly dismissed. 38. The next issue relates to setting off the expenses against dividend income. During the year under consideration, the assessee received dividend amounting to ₹ 3,50,98,649/-. For earning this dividend income, the assessee has made investment of borrowed funds. The assessee paid interest on borrowed funds. Therefore, the AO asked the assessee to explain why the interest incurred on borrowed funds should not be disallowed. In reply, the assessee submitted that under the provisions of section 36(1)(iii) of the Act, the interest paid on borrowed funds utilized for business purposes is allowable expenditure. During the year under consideration, the assessee incurred interest expenses of ₹ 13,165.63 lacs. The AO by invoking the provisions of section 14A, the AO disallowed ₹ 3,50,98,649/-. Aggrieved by the decision of the AO, the assessee appealed before the ld.CIT(A). 39. Before, the first appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record; The proceedings for assessment year 2002-03 shall stand remanded back to the Assessing Officer. The Assessing Officer shall determine as to whether the assessee has incurred any expenditure (direct or indirect) in relation to dividend income/income from mutual funds which does not form part of the total income as contemplated under section 14A. The Assessing Officer can adopt a reasonable basis for effecting the apportionment. While making that determination, the Assessing Officer shall provide a reasonable opportunity to the assessee of producing its accounts and relevant or germane material having a bearing on the facts and circumstances of the case. In the present case, the assessee neither before the AO nor the ld.CIT(A) or the Tribunal produced any documents how the assessee is eligible for deduction of the expenditures incurred for earning dividend income. We find that the ld. CIT(A) restricted the claim to 50%. Therefore, we are of the considered opinion, that this facts requires details investigation and verifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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