TMI Blog2019 (8) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... ur. Section 14A r.w.r 8D disallowance in relation to its exempt income(s) - HELD THAT:- Lower authorities have nowhere recorded any satisfaction regarding corresponding explanation as per its books of account u/s. 14A(2) of the Act, we find no merit since the Assessing Officer had found no reason to accept the above stated suo motu figures. It has further filed necessary details of the financial position as well as either heads of avialbility of funds in the paper book. The same suggests that the assessee had made assessment year wise investments of ₹ 170.32 corres and ₹ 217.42 crores in exempt income yielding investments whereas corresponding non interest bearing amount in assessment year wise of ₹ 326.08 and ₹ 386.59 corres; respectively. These clinching figures have gone rebutted from the revenue side. Hon ble Bombay High Court s landmark decision in CIT V/s. Reliance Utilities Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT ] holds that necessary presumption that arises in such a case is deployment of non interest security fund is exempt income yielding interest. We thus reverse both the lower authorities action disallowaning proportionate interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013-14 arise against the ACIT, Circle-12, Kolkata s separate assessment orders dated 31-12-2016 and 24-10-2017 framed in furtherance to the Dispute Resolution Panels direction s involving proceedings u/s 143(3) r.w.s 144C and 143(3) r.w.s 144C(5) of the Incometax Act, 1961 ( in short Act ); respectively. 2. We have heard these appeals together since involving almost all of identical issues. Case files including lower authorities records as well as judicial precedents stand perused. 3. We come to assessee s identical first common substantive ground in these two cases challenging the lower authorities action making corporate guarantee adjustment(s) of ₹ 8226/- and ₹ 29,592/- ; assessment year wise; respectively. Suffice to say that it transpires at the outset that this tribunal s co-ordinate bench s decision in ITA No. 1912/Kol/2012 Tega Industries Ltd V/s. DCIT for AY 2008-09 decides the issue against the department in holding that a corporate guarantee does not amount to an international transaction u/s. 92B of the Act. 4. There is further no dispute that the legislature has introduced Explanation to section 92B of the Act vide Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anization. Clause (c ) refers to lending or guarantee. But the Explanation which is for removal of doubts or is clarificatory, cannot be read independent of Section 92B(1). Section 92B(1), provides those transactions as international transactions which are in the nature of purchase, sale or lease of tangible or intangible property (explained by clauses (a) and (b) of the Explanation), or provision of services, (explained by clause (d) of the Explanation), or lending or ITA No. 980/Kol/2017 Assessment Year: 2012-13 M/s. Manaksia Limited borrowing money (explained by Clause (c) of Explanation). The plain reading of provisions of sec. 92B(1) of the Act indicate that the various transactions mentioned in section 92B(1) of the Act, (i.e. purchases, sales, provision for services, lending or borrowing or any other transaction) should have bearing on the profits, incomes, losses or assets of such enterprises. In our opinion, the condition precedent of a transaction having a bearing on profits, incomes, losses, or assets would apply to each of the aforesaid transactions namely purchase, sale, or lease of tangible or intangible property or provision of services, or lending or borrowing money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penny from the AE, so the facts of the case are different and case law is distinguishable and, therefore, the Hon'ble High Court's order cannot come to the rescue of the Revenue. We find that the ld. AR pointed out that in the said case, the Hon'ble Bombay High Court did not answer the specific question as to whether the issuance of corporate guarantee is inherently within the ambit of definition of 'international transaction' irrespective of whether or not such transactions have any bearing on profits, income, lossess or assets of such enterprises u/s. 92 B of the Act. We also note that the Ahmedabad Bench of this Tribunal supra after considering the decision of the Hon'ble Bombay High Court in Everest Kanto Cylinder Ltd. (supra) observed as under: We are unable to see, in the judgment of Hon'ble Bombay High Court, any support to the proposition that issuance of corporate guarantee is inherently within the ambit of definition of 'international transaction' under section 92B irrespective of whether or not such transactions have any 'bearing on profits' incomes, losses, or assets of such enterprises'. Revenue, therefore, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uarantee (s) in issue do not amount to international transactions u/s. 92B of the Act. Both the corresponding transfer pricing adjustment in question stand deleted. This first identical issue in both the appeals is decided in assessee s favour. 6. Next comes the assessee s second identical issue of section 14A r.w.r 8D disallowance in relation to its exempt income(s) of ₹ 4.95 crores and ₹ 5.5 crores; respectively. It had suo motu disallowed respective sums of ₹ 4,55,540/- and ₹ 5,57,270/- as direct expenditure. The Assessing Officer computed proportionate interest and administrative expenses under Rule 8D(2)(ii) (iii) involving figures of ₹ 4038101 ₹ 13,68,167/- as well as ₹ 25,34,347/- and ₹ 39,26,353; head wise/assessment year-wise respectively whilst disallowing the impugned sum of ₹ 65,752,848/- and ₹ 52,92,520/- over and above, the suo motu figures. The CIT(A) has affirmed the same in his lower appellate finding. 7. Coming to assessee s first and former plea qua the instant issue of section 14/R.W.R 8D disallowance that the lower authorities have nowhere recorded any satisfaction regarding cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness promotion. This was not Revenue s case as per lower authorities order that the impugned claim involves any personal element as per documents on record. We therefore accept assessee s instant grievance to delete club expenditure disallowance of ₹ 7,38,319/-. 10. The Assessee s remaining last identical substantive grounds regarding section 234B/234C are treated as consequential in nature. 11. We further to notice that assessee has raised an identical additional ground in both cases seeking to claim education cess on provision for Income-tax amount of ₹ 71,65,049/- and ₹ 77,76,699 (assessment year wise); respectively as allowable in computing total income other than MAT u/s. 115JB of the Act. Hon ble Apex Court s land mark decision National Thermal Power Corporation Ltd (NTPC) V/s. CIT (1998) 229 ITR 383 (SC) as considered by this tribunal s Special Bench order M/s. All Cargo Global Logistics Ltd V/s. DCIT (12) 137 ITD 26 (Mum.) settles the law that we can very well entertain such a legal question in order to determine the correct tax liability when all the relevant facts form part of records. We thus allow assessee s additional ground to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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