TMI Blog2017 (11) TMI 1769X X X X Extracts X X X X X X X X Extracts X X X X ..... des. Thus hold that after deciding technical aspect, CIT (A) should decide the entire aspect on merit in both years afresh. - ITA Nos. 1917 & 1918/Bang/2016, ITA No. 1987/Bang/2016 - - - Dated:- 21-11-2017 - SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER For the Appellant : Shri Sunil Jain, CA For the Respondent : Shri BiswaranjanSasmal, CIT (DR) ORDER Per Bench: Out of these three appeals, there are two cross appeals of the assessee and revenue for Assessment Year 2007-08 which are directed against the order of CIT (A)-11, Bangalore dated 29.08.2016 and the remaining third appeal is for Assessment Year 2008-09 which is filed by the assessee and this is directed against a separate order of CIT (A)-11 dated 29.08.2016. 2. All these appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 3. The grounds raised by the assessee in Assessment Year 2007-08 in ITA No. 1917/Bang/2016 are as under. Ground 1: Order passed under section 143(3) r.w.s. 153A is liable to be quashed 1. On the facts and circumstances of the case and in law, the learned CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of Book Profit under section 115JB, the actual amount incurred for earning exempted income having regard to books of account is to be considered and not 1.50% of dividend income earned. 2. The Appellant therefore prays that the Assessing Officer be directed to consider the amount for add back to the amount of net profit as is being incurred to earn exempted income having regard to the books of account. Ground 4: Deduction under section 80IA 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding the action of the Assessing Officer that interest income on deposits with banks placed as per Trust and Retention Account Agreement of ₹ 7,56,42,184/- is not derived from the business of power generation and consequently not eligible for deduction under section 80IA. 2. The Appellant has availed loans for setting up of Power Plant. It has entered into Trust and Retention Account (TRA) agreement dated March 21, 2001 at the instance of lenders to ensure that a certain minimum amount of liquidity is maintained for the purposes of meeting various obligation of the company. Till the time the actual payments are made the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by ITAT cannot be allowed in search proceedings as the Appellant failed to take plea during the assessment proceedings or appellate proceedings. The Appellant during the course of original assessment proceedings and appellate proceedings has taken up the issue of disallowance u/s.14A and it is not a fresh ground. 3. The learned CIT(A) failed to appreciate and ought to have held that the Appellant has invested in the subsidiary companies to hold strategic investment in subsidiaries and therefore the said investments could not be considered for disallowance under section 14A of the Act. 4. The additional amount of disallowance worked out at ₹ 3,03,27,000/-based on formula prescribed in Rule 8D(2)(iii) in no case can be considered as the amount incurred to earn exempted income for the purpose of section 14A. 5. The Appellant therefore prays that the Assessing Officer be directed to delete the disallowance of ₹ 3,03,27,000/-made under section 14A read with Rule 8D(2)(iii). Ground 3: Computation of Book Profit under section 115JB 1. The learned CIT(A) failed to appreciate and ought to have held that for the purpose of computation of Book Profit under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the second proviso to section 153A, invoking of the provisions of section 153A is not justified. He submitted that in Assessment Year 2008-09 also, similar ground was raised before CIT (A) in ground no. 3 in that year also. He submitted that in both the years, this issue is covered in favour of the assessee by the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Lancy Constructions as reported in 383 ITR 168 (Karnataka) but this judgment was not available at a time when the impugned orders were passed by the CIT(A) and therefore, the CIT(A) has followed another judgment of Hon'ble Karnataka High Court rendered in the case of Canara Housing Development Company Vs. DCIT as reported in 274 CTR 122 (Karnataka). He submitted a copy of the tribunal order rendered in the case of ACIT Vs. Cornerstone Properties Pvt. Ltd. in ITA Nos. 1714 to 1717/Bang/2013 and C.O. Nos. 62 to 65/Bang/2014 dated 08.09.2017 and pointed out that in this case, the Tribunal has considered both these judgments of Hon'ble Karnataka High Court and it was held by Tribunal in this case that in respect of this issue as to whether the invocation of section 153A is valid or not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Canara Housing Development Company Vs. DCIT (supra) is not relevant because in that case, this was admitted position of fact that incriminating material was found during the course of search. But in the later case rendered in the case of CIT Vs. Lancy Constructions (supra), it was noted that no incriminating material was found in the course of search and it was held that in the absence of incriminating material having been found in the course of search, the revenue cannot get a second opportunity to reopen the concluded assessment. But to consider the applicability of this judgement in the present case, it is essential to examine the fact as to whether any incriminating material was found in the course of search or not. Neither in the assessment order nor in the order of CIT (A), there is any discussion on this aspect of the matter. The relevant panchanama is also not made available before us by any side in the paper book. Under these facts, we feel it proper to restore the entire matter back to the file of CIT (A) for fresh decision in the light of this later judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Lancy Constructions (supra) after exa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
