TMI Blog2018 (12) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... vergent stand during the year under appeal. Reliance in this regard is placed on the decision of Hon’ble Supreme Court in the case of Radhaswami Satsang [1991 (11) TMI 2 - SUPREME COURT]. In view of the aforesaid findings in the facts and circumstances of the case, we find no infirmity in the order of the Ld. CIT(A) deleting the disallowance Addition u/s 14A - Held that:- Referring to case of CIT vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT]we hold that no disallowance under second limb of Rule 8D(2) could be made in the facts and circumstances of the case. With regard to third limb of Rule 8D(2), we hold that only investments that had yielded dividend income are to be considered for the purpose of computing the disallowance under third limb of Rule 8D(2), which would be in consonance with the decision of this Tribunal in REI Agro Ltd. [2013 (9) TMI 156 - ITAT KOLKATA]. Accordingly, ground no. 1 raised by the assessee in cross objection is partly allowed. Set off of long term capital loss of assessment year 2010-11 against the long term capital gain of the year under appeal - Held that:- It has already been held by the Hon’ble Supreme Court in the case of CIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led in favour of assessee in its own case by the order of this tribunal in I.T.A. No. 508/Kol/2016 for assessment year 2010-11 dated 24.08.2018 wherein it was held as under: 4.2. We have heard rival submissions. We find that this issue is no longer res integra in view of the decision of Hon ble Madras High Court in the case of CIT vs. Shri T. P. Textiles Pvt. Ltd. reported in 394 ITR 483 (Mad) wherein it was held as under: 6.1. Therefore, the only issue, which arose for consideration before the Tribunal was, whether the additional depreciation, in the sum of ₹ 8,03,233/- could be claimed by the assessee in the relevant assessment year, i.e., the assessment year 2011-12, in respect of machinery, which was purchased and used for less than 180 days, in the previous year, 2009-10 (i.e., the assessment year 2010-11). 7. The Tribunal, relying upon its own judgment in the case of Fresh Honest Cafe Ltd. V. DCIT, dated 10.08.2016, passed in I.T.A.No.1373/Mds/2016 allowed the appeal of the Assessee. 7.1. Pertinently, in the judgment of the Tribunal, delivered in the case of Fresh Honest Cafe Ltd. V. DCIT, reliance was placed on the judgment of the Karnataka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the business of manufacture or production of any article or thing or generation or generation and distribution of power, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii). (Emphasis is ours) 8. Pertinently, the Karnataka High Court, in a decision rendered in the case of CIT V. Rittal India (P.) Ltd., [2016] 66 taxmann.com 4 (Karnataka), has interpreted the aforesaid provision, in particular, the proviso incorporated therein. The Karnatake High Court, in the said case, has come to the conclusion that additional depreciation granted under clause (iia) of Section 32(1) of the Act is for the purpose of affording benefits to the Assessees and, to encourage industrialization, either by setting up a new industrial unit, or, by expanding a new industrial unit, by purchasing and installing a new machinery, or, plant, and putting the same to use for the purposes of business. 8.1. The Court, went on to say, that while, the proviso appearing in Section 32(1) restricts the claim of depreciation to 50% of the amount calculated at the percentage prescribed for an asset referred to in clause (iia) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of insertion of Clause (iia) would be defeated because it provides for 20% deduction which shall be allowed..... 9. We are in respectful agreement with the view taken by the Division Bench of the Karnataka High Court, passed in CIT V. Rittal India (P.) Ltd. (No.1) 10. According to us, these are provisions included by the Legislature in the Statute to give a fillip to new industries as also to existing industries, which seek to expand its sway, by investing in and making use of new plant and machinery. 10.1. The plain language of Section 32(1)(iia) read along with the relevant proviso would have us come to the conclusion that, there is no limitation in the assessee claiming the balance 10% of additional depreciation in the succeeding assessment year. 10.2. As a matter of fact, with effect from 01.04.2016, the ambiguity, if any, in this regard, in the mind of the Assessing Officer, stands removed by virtue of the Legislature, incorporating in the Statute, the necessary clarificatory amendment. 10.3. The amendment brought in the relevant proviso obtaining in Section 32, reads as follows: 32. (1) ...... Provided also that where an ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. We are, clearly, of the view that the Memorandum, which is sought to be relied upon by the Revenue, only clarifies as to how the unamended provision had to be read all along. 11.5. In any event, in so far as the Court is concerned, it has to go by the plain language of the unamended provision, and then, come to a conclusion in the matter. As alluded to above, our view, is that, upon a plain reading of the unamended provision, it could not be said that the Assessee could not claim balance depreciation in the A.Y., which follows the A.Y., in which, the machinery had been bought and used, albeit, for less than 180 days. 12. Thus, having regard to the foregoing discussion, we are of the view that no interference is called for with the impugned judgment of the Tribunal. 13. The appeal is, accordingly, dismissed. Respectfully following the aforesaid decision of the Hon ble Madras High Court we are inclined to grant relief in respect of claim of additional depreciation of ₹ 1,43,24,748/- to the assessee. Accordingly, ground no. 3(a) raised by the assessee is allowed. Respectfully following the same, we dismiss the ground no. 1 raised by the revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2008-09 without any dispute. We find that the assessee had only debited in its profit and loss account a sum of ₹ 10,26,000/- representing amortization of license fee over the lease period. It is not in dispute that the assessee has paid a sum of ₹ 2,05,16,859/- as an upfront payment in assessment year 1998-99 as per the agreement, which is sought to be adjusted / set off with the license fee payable by the assessee year on year during the tenure of the lease. Hence effectively the assessee had claimed a sum of ₹ 10,26,000/- as a deduction over the period of the lease, which in our considered opinion, is in accordance with the principle laid down by the Hon ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd. vs. CIT reported in 225 ITR 802 wherein it was held as under: Ordinarily, revenue expenditure which is incurred wholly and exclusively for the purpose of business must be allowed in its entirety in the year in which it is incurred. It cannot be spread over a number of years even if the assessee has written it off in his books over a period of years. However, the facts may justify on assessee who has incurred ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is having sufficient own funds to make investments and hence there cannot be any disallowance under second limb of Rule 8D(2). We find that the assessee is having own funds of ₹ 30622.59 lacs representing share capital, reserves and surplus, borrowed funds of ₹ 8455.57 lacs and whereas the investments made by the assessee were only ₹ 2757.30 lacs as on 31.03.2011. Hence from the bare perusal of the audited statement, it is very much evident the assessee is having sufficient own funds for making investments. Moreover, we find from the investment was that the majority of the investments were made by the assessee company only in debt fund and liquid mutual fund. By placing reliance on the decision of Hon ble Calcutta High Court in the case of PCIT vs. Rasoi Limited in G.A. No. 633 of 2016 ITAT No. 109 of 2016 dated 15.02.2017 and the decision of Bombay High Court in the case of CIT vs. HDFC Bank Ltd. reported in 49 taxmann.com 335 we hold that no disallowance under second limb of Rule 8D(2) could be made in the facts and circumstances of the case. With regard to third limb of Rule 8D(2), we hold that only investments that had yielded dividend income are to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tayed the judgement of the Calcutta High Court during Leave proceedings. But the Hon ble Supreme Court had only passed an interim order on the impugned issue. Hence we deem it fit and appropriate , in the interest of justice and fair play, to remand this issue to the file of the ld AO to pass orders based on the outcome of the main appeal on merits by the Hon ble Supreme Court as stated supra. Accordingly the ground no. 1 raised by the assessee in this regard is allowed for statistical purposes. Respectfully following the same, ground no. 2 raised by the assessee in its cross objection is allowed for statistical purposes by remanding the issue to the file of ld. AO to pass orders on the outcome of the main appeal on merits by the Hon ble Supreme Court in the case of Exide Industries supra. 15. The last issue to be decided in the cross objection of the assessee is as to whether the ld. CIT(A) was justified in confirming the action of the ld. AO in disallowing the carry forward of long term capital loss of assessment year 2010-11 amounting to ₹ 8,75,732/-, in the facts and circumstances of the case. 16. The brief facts of this issue is that the assessee claimed long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established in the course of assessment of the total income that the assessee has suffered loss of profits. Section 24(2) confers a statutory right (subject to certain conditions which are not material) upon the assessee who sustains a loss of profits in any year in any business, profession or vocation to carry forward the loss as is not set off under sub-section (l) to the following year, and to set it off against his profits and gains, if any, from the same business, profession or vocation for that year. Whether the loss of profits or gains in any year may be carried forward to the following year and set off against the profits and gains of the same business, profession or vocation under section 24(2) has to be determined by the Income-tax Officer who deals with the assessment of the subsequent year. It is for the Income-tax Officer dealing with the assessment in the subsequent year to determine whether the loss of the previous year may be set off against the profits of that year. A decision recorded by the Income-tax Officer who computes the loss in the previous year under section 24(3) that the loss cannot be set off against the income .of the subsequent year is not binding on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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