TMI Blog2019 (7) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 1206 - ITAT MUMBAI] wherein the similar ground of appeal was restored to the file of CIT(A), hence, keeping in view, the principle of consistency, this ground of appeal is also restored to the file of ld. CIT(A) to decide it afresh, with similar directions. In the result, this ground of appeal is allowed for statistical purpose. Disallowance of prior period expenditure - HELD THAT:- As decided in assessee's own case [ 2017 (10) TMI 1206 - ITAT MUMBAI] there the turnover or.he assessee is substantial, some bonafide adjustments in the books of accounts where the accounts for the relevant year may have been closed or the assessee's avenues for claiming these deductions in the relevant year have been exhausted. The assessee would be entitled to claim such deductions.Therefore we are unable to come to any other conclusion and are or the opinion that no interference in the impugned order is called for. Accordingly the ground raised by the Revenue is rejected - I.T.A. No.4280/Mum/2013, I.T.A. No.5121/Mum/2013 - - - Dated:- 28-6-2019 - Shri G.S. Pannu, Vice President And Shri Sandeep Gosain, Judicial Member For the Assessee : Shri. J.D. Mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (ITA No. 3611 of 2010), the claim of the assessee in respect of an amount of ₹ 2,47,98,757/- incurred towards registration and stamp duty charges, as was raised by way of a revised return of income for A.Y. 2014-15, was accepted and allowed by the A.O vide his order passed u/s. 143(3). The ld. A.R. in order to substantiate the aforesaid factual position, therein drew our attention to the copy of the aforesaid assessment order placed at Page No. 50 of APB . Per contra, the ld. D.R. relied on the orders of the lower authorities. 5. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material produced before us. We find that as stands gathered from the records, the revenue in the assessment framed in the hands of the assessee corporation for A.Y. 2014-15 had allowed the registration and stamp duty charges of ₹ 2,47,98,757/- as a revenue expenditure, as claimed by the assessee corporation in its revised return of income for A.Y. 2014-15, by relying on the judgment of the Hon ble High Court of Bombay in the case of CIT-3 Vs. Reliance Industrial Infrastructure Ltd. (2015) 379 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m amortized by the assessee corporation was in the nature of compensation paid to the landlords, in addition to the rent. We thus are of the considered view that the leasehold premium amortized by the assessee corporation, being in the nature of rent, was therefore allowable as a revenue expenditure in the hands of the assessee. We are of the considered view that our aforesaid view stands fortified by an analogy that can safely be drawn from the judgment of the Hon ble Jurisdictional High Court in the case of Reliance Industrial Infrastructure Ltd. (supra), on the basis of which the claim of the assessee corporation towards registration and stamp duty charges of ₹ 2,47,98,757/-, as observed by us hereinabove, had been allowed as a revenue expenditure in the assessment framed in the case of the assessee corporation for A.Y. 2014-15. We are further of the considered view that the claim of the assessee corporation that the lease premium paid to the landlords in order to facilitate payment of nominal rent, can safely be characterized as a revenue expenditure in the light of the judgment of the Hon ble Supreme Court in the case of : Commissioner of Income Tax Vs. Madras Auto Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to challenging the order of Ld. CIT(A) in confirming the disallowance made by AO u/s 14A of the I.T. Act. 7. At the very outset, Ld. AR appearing on behalf of the assessee submitted before us that these grounds are covered by the order of Hon ble ITAT in ITA No. 5963/Mum/11 for AY 2004-05 in assessee s own case, wherein the identical grounds raised in the present appeal have already been decided on merits. The operative portion of the decision of the Coordinate Bench is reproduced below:- Disallowance u/s. 14A 6. That the assessee corporation had received an amount of ₹ 117,79,32,321/- on account of interest on tax free securities and bonds and dividends from shares, which were claimed as exempt during the year under consideration. The A.O observing that the assessee had not allocated any disallowance of expense u/s. 14A relatable to the said exempt income, therefore estimated 10% of the exempt income as expense relatable to earning of such income and disallowed the same. The CIT(A) after deliberating on the contentions of the assessee, followed the view taken by his predecessor in the assessee s own case for A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded by the Revenue Authority, this presumption is established. Hence, in the net result, this ground of appeal filed by the assessee is allowed. It was thus averred by the ld. A.R. that the disallowance made by the A.O u/s. 14A which thereafter had been upheld by the CIT(A), was liable to be set aside. The Ld. A.R in order to drive home his contention that the assessee corporation had substantial interest free funds during the year under consideration, and thus it could safely be presumed that the investments made by the assessee corporation in the tax free income yielding investments during the year were made out of the interest free funds, and as such no part of the tax free income yielding investments could be related to the interest bearing funds, therein took us through his Paper book filed on 09.03.2017. We have perused the Final accounts of the assessee corporation for the year under consideration, Statement of dividend income/Interest income exempt from tax, as well as its Computation of income, placed at Page 1-35 of the APB . The Ld. A.R had drawn our attention to a Chart marked as Incremental Cash Flow of own funds from F.Y. 1986-87 to F.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our aforesaid view is fortified by the judgment of the Hon ble High Court of Bombay in the case of Reliance Utility and Power Ltd. (Supra), which thereafter had been followed by the Hon ble High Court in the case of CIT Vs. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom) and HDFC Bank Ltd. Vs. DCIT (2016) 383 ITR 529 (Bom). We thus are of the considered view that the facts of the present case are squarely covered by the aforesaid judgments of the Hon ble Jurisdictional High Court, as well as the order passed by the Tribunal in the assessee s own case for the immediately preceding years, viz. A.Ys. 2002-03 and 2003-04. 9. Alternatively, we find that the A.O after rejecting the claim of the assessee that no disallowance was called for u/s. 14A, had therein estimated the said disallowance @10% of the exempt income, and madea consequential addition of ₹ 11,77,93,232/-. We are unable to persuade ourselves to be in agreement with the whimsical estimation of disallowance by the A.O. We are of the considered view that the very process of determination of the amount of expenditure incurred in relation to exempt income would be triggered, only if the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same findings which are applicable mutatis mutandis in the present case. Resultantly, these ground raised by the assessee stands allowed. Ground Nos. 5 6 10. These grounds raised by the assessee are inter related and inter connected and relates to challenging the order of Ld. CIT(A) in holding that oil bonds are capital asset and confirming the loss on sale of oil bond as capital loss and not as business loss. 11. At the very outset, Ld. AR appearing on behalf of the assessee submitted before us that these grounds are covered by the order of Hon ble ITAT in ITA No. 3636/Mum/13 and 4279/Mum/14 for AY 2006-07 and 2007-08 in assessee s own case, wherein the identical grounds raised in the present appeal have already been decided on merits. The operative portion of the decision of the Coordinate Bench is reproduced below:- 22. Ground No. 5 relates to loss on sale of Oil Bonds. This ground of appeal is identical to the ground no. 6 of appeal for AY 2006-07, which we have restored to the file of ld. CIT(A) for verification of fact and to allow the relief to the assessee on the basis of decision for AY 2004-05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready been decided on merits. The operative portion of the decision of the Coordinate Bench is reproduced below:- 27. Ground No.8 relates to Interest Income from Oil Bonds to be taxed as Business Income. We have seen that this ground of appeal is identical to the ground no.10 of appeal for AY 2006-07 which we have restored to the file of ld. CIT(A) to decide afresh in accordance with the direction contained hereinabove. Thus, respectfully following the decision of Coordinate Bench, this ground of appeal is also restored to the file of CIT(A) to decided afresh a per the direction in appeal for AY 2006-07. In the result this ground of appeal is allowed for statistical purpose. 16. On the other hand, Ld. DR contested the appeal and relied upon the orders passed by the revenue authorities. 17. After having heard the counsels at length and after having gone through order of ITAT as mentioned above in assessee s own case, we find that the identical issue has already been decided by the Coordinate Bench of ITAT in ITA No. 3636/Mum/13 and 4279/Mum/14 for AY 2006-07 and 2007-08 in assessee s own case. Therefore, respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f prior period expenses of ₹ 34.51 lakhs arises on account of various expenses for the reason that there was some mistake in making provisions in the relevant year and it constitutes only 0.03% of the turnover of the assessee, which is ₹ 1045.22 crores. It is submitted that under these facts, this issue is covered in favour of the assessee by the Tribunal judgment rendered in the case of Escorts Limited Vs. IAC reported in 79 ITD 291 (Del). Our attention was drawn to para No.118 to 121 of this Tribunal Judgment as per which under similar situation this issue was decided by the Tribunal in favour of the assessee. Relevant para no. 121 is reproduced below:- 121. In the peculiar facts and circumstances of the case where the turnover or.he assessee is substantial, some bonafide adjustments in the books of accounts where the accounts for the relevant year may have been closed or the assessee's avenues for claiming these deductions in the relevant year have been exhausted. The assessee would be entitled to claim such deductions..Therefore we are unable to come to any other conclusion and are or the opinion that no interference in the impugned order is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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