TMI Blog2016 (1) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of the Directors the assessee cannot be denied of the claim of depreciation. It is not necessary that the vehicle ought to have been registered in the name of the assessee claiming depreciation. Further that it was also pointed out by the Learned CIT(A) that in the assessee’s own case for A.Y. 2010-11 such addition made by the Learned Assessing Officer was deleted. - Decided in favour of assessee Addition u/s 145A on account of unutilized CENVAT Credit - Held that:- Addition on unutilized CENVAT credit was made u/s 145A of the Act by the Learned AO in assessee’s own case for A.Y. 2010-11 the same was deleted by the first appellate authority holding the said credit cannot be a subject matter of addition u/s 145A of the Act being tax neutral. We find no merit in the case made out by the Revenue neither any infirmity in the order impugned before us. - Decided in favour of assessee - I.T.A. No.1770/Ahd/2016 - - - Dated:- 24-1-2016 - SHRI PRAMOD KUMAR, VICE PRESIDENT AND Ms. MADHUMITA ROY, JUDICIAL MEMBER For The Appellant : Shri Vinod Talwani, Sr.D.R. For The Respondent : Shri P.M. Mehta and G. M. Thakor, A.R. ORDER PER Ms. MADHUMITA ROY - JM: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of computation of income. The assessee s case is this that the assessee has not earned any exempt income during the year under consideration therefore the assessee is not having income exempt from tax and as such there is no question of disallowance u/s 14A of the Act. It is an admitted position that the assessee did not claim any claim for exemption. In such situation, Section 14A could not have any application. The assessee relied upon the judgment passed by the Hon ble High Court of Punjab and Haryana in the case of CIT vs. Winsome Textile Industries Ltd. along with other decisions passed by different Benches of ITAT as well as Hon ble High Court. However, the plea of the assessee was not accepted by the Learned Assessing Officer. The disallowance u/s 14A Provision r.w. Rule 8D is computed at ₹ 51,82,333/-, since the assessee suo moto disallowed ₹ 29,20,159/- in the computation of income, the expenses of ₹ 22,62,174/- incurred for earning exempt income has been disallowed by the Learned AO and added back to the total income of the assessee against which appeal was preferred before the Learned CIT(A) who in turn allowed the said appeal by deleting the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest free funds available for making investments resulting into tax free income. The Learned AR relied upon the judgment passed in the matter of CIT vs. Corrtech Energy Ltd., ITA No.239 of 2014 by the Jurisdictional High Court in support of his case. 5. We have heard the respective parties. We have perused the relevant materials available on record. We find from the orders impugned that the Learned CIT(A) while considering the entire aspect of disallowance made by the Learned Assessing Officer u/s 14A of the Act r.w.r. 8D of the I.T. Rule, duly considered the issue which was already settled by him for A.Y. 2011-12 in assessee s own case by and under its own order dated 15.07.2015 in appeal No.CIT(A)-VI/DCIT.Cir.1/93/2014-15 (now 466/CIT(A)-1). 6. The Learned CIT(A) came to a conclusion that since the assessee has not earned any exempt income during the year under consideration relying upon the order passed by the Hon ble Jurisdictional High Court in the case of Corrtech Energy Ltd. deleted the addition to the tune of ₹ 22,62,174/- as made u/s 14A of the Act with the following observations: 3.4. On carefully consideration of observation of Assessing Officer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed since the Car was not registered in the name of the assessee company. The assessee s case is this that the Car was registered in the name of the Directors of the company and funds for such purchase of the assets was provided by the assessee company. Further that the value of the said vehicle was shown as part of fixed assets in the annual accounts of the assessee and the benefits including users of the Cars are also enjoyed by the assessee company. However, such contention made by the assessee was not accepted by the Learned AO. The entire claim of depreciation was disallowed on the pretext that the assessee is not a registered owner of the Car and the vehicle was not used for business purposes. In appeal, the Learned CIT(A) deleted such addition inter alia relying upon the judgment passed by the Hon ble Delhi High Court in the case of CIT-vs-Basti Sugar Mills Co. Ltd. (257 ITR 88) Hence, instant appeal filed by the Revenue before us. 10. At the time of hearing of the appeal, the Learned Representative of the Department relied upon the order passed by the Learned AO particularly on the finding that the vehicle was not registered in the name of the Company when the Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. It is not necessary that the vehicle ought to have been registered in the name of the assessee claiming depreciation. Further that it was also pointed out by the Learned CIT(A) that in the assessee s own case for A.Y. 2010-11 by and under order dated 05.08.2013 such addition made by the Learned Assessing Officer was deleted. We, therefore, do not find any infirmity in the order passed by the Learned CIT(A). The same is thus confirmed. This ground of appeal of Revenue is dismissed. 12. Revenue has challenged the deletion of addition of ₹ 50,13,577/- made u/s 145A of the Act on account of unutilized CENVAT Credit. 13. During the assessment proceedings, upon examination of Column No.22(a) of 3CD Report, following unutilized CENVAT Credit at the end of the year was found: Particulars Input Available CENVAT Credit 10223806 Utilized CENVAT Credit 5210229 Unutilized CENVAT Credit 5013577 The assessee thereafter was issued a show cause notice on 27.02.2015 to explain as to why unutilized CENVAT credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars 1999-00, 2000-01) The Learned AR further submitted before us that in assessee s own case for A.Y. 2010-11, the Learned CIT(A) duly accepted the aforesaid contention made by the assessee that no addition can be made on account of unutilized CENVAT Credit. Therefore, the addition on account of utilized CENVAT Credit is liable to be deleted as submitted by the Learned AR. He, further relied upon the judgment of Coordinate Bench in the matter of ITO-vs-Gujarat Paraffins Pvt. Ltd. in support of his argument. On the other hand, Learned DR relied upon the order passed by the Learned Assessing Officer. 15. We have heard the respective parties, perused the relevant records. It appears from the order passed by the Learned Assessing Officer that the addition made on ground that if inclusive method of accounting was followed the assessee would have earned higher profit then profit shown as per exclusive method of accounting. The Assessing Officer has also given example showing implication of profit when inclusive method is adopted as against the exclusive method of accounting as adopted by the assessee company. He further observed that unused CENVAT credit is required in the closing sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disturbing the value of the closing stock the assessing authority could not change the method of accounting regularly employed. ( c) The assessment year being 1997-98 the provisions of section I45A of the Act inserted by the Finance (No. 2) Act, 1998 with effect from April be invoked . [ 4.4] I have perused the assessment order and the written submissions made in this regard. Since the issue is squarely covered by the Jurisdictional ITAT, I am of the view that no addition should be made on account of excise and customs duty in the valuation of closing stock. The addition made by the AO is thus directed to be deleted. The grounds raised by the appellant are thus allowed. 5. Aggrieved by the order of the Assessing Officer Revenue is now in appeal before us. 6. Before us, learned D.R. relied on the order of the Assessing Officer. 7. We have heard the learned D.R. and perused the material on record. CIT(A) while deleting the addition has held that the issue is squarely covered by the decision of jurisdictional Tribunal and accordingly relying on the aforesaid decision deleted the addition. Nothing has been brought on record to controvert the findings o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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