TMI Blog2020 (12) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in AY 2011-12 is confirmed. Disallowance made u/s 14A in assessment years 2010-11 2012-13 - HELD THAT:- CIT(A) has followed the decision rendered by the coordinate bench in holding that the disallowance u/s 14A of the Act should not exceed the amount of exempt income.CIT(A) referred to the decision rendered by Hon ble Delhi High Court in the case of Joint Investments Pvt. Ltd. ( 2015 (3) TMI 155 - DELHI HIGH COURT ) . Disallowance of compensation paid to a person named Shri Mahesh Bhupathi and claimed as expenditure - HELD THAT:- Identical issue in the assessee s own case and since there is no change in the facts relating to the impugned disallowance, we do not find any infirmity in the order passed by Ld. CIT(A) on this issue. Accordingly, we confirm the same. Addition u/s 40(a)(ia) - Scope of amendment - HELD THAT:- We restore this issue to the file of A.O. for examining the applicability of second proviso to section 40(a)(ia) of the Act in AY 2010-11. See PERFECT CIRCLE INDIA PVT LTD - [ 2019 (1) TMI 1532 - BOMBAY HIGH COURT] - ITA Nos.1916 to 1918/Bang/2017, ITA No.2005/Bang/2017 - - - Dated:- 9-12-2020 - Shri George George K., Judicial Member And Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the disallowance made by the AO consisted of interest disallowance made u/r 8D(2)(ii) as well as expenditure disallowance made u/r 8D(2)(iii) of I T Rules. He submitted that no disallowance out of interest expenditure under rule 8D(2)(ii) is called for, in A.Y. 2011-12, since the own funds available with the assessee is more than the value of investments. The Ld. A.R. submitted that the above said proposition is supported by the decision rendered by Hon ble Jurisdictional Karnataka High Court in the case of Micro Labs Limited 383 ITR 490. Accordingly, he contended that the disallowance made out of interest expenditure u/r 8D(2)(ii) should be deleted. 5.1 The Ld. D.R., however, submitted that the contentions of the assessee require examination at the end of the A.O. 5.2 We heard rival contentions on this issue. According to the Ld. A.R., disallowance out of interest expenditure is not required to be made under rule 8D(2)(ii) as the own funds available with the assessee in that year was in excess of the value of investment. The Ld. A.R. has taken the support of decision rendered by the jurisdictional High Court in the case of Micro Labs Ltd. (supra). However, as righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Ld. CIT(A) in the A.Y. 2012-13 contending that the Ld. CIT(A) should have followed the CBDT circular No.5/2014. The Ld. D.R. submitted that the Ld. CIT(A) was not justified in ignoring the above said circular of CBDT. 6.3 We notice that the decision rendered by Ld. CIT(A) is supported by the orders passed by coordinate bench as well as Hon ble Delhi High Court referred (supra). Hence, we do not find any infirmity in the decision rendered by Ld. CIT(A) on this issue in A.Y. 2010-11 2012-13. Accordingly, we confirm his order passed on this issue in the above said two years. 7. The assessee has raised two more issues in assessment year 2010-11. The first issue relates to disallowance of compensation amount of ₹ 74,32,777/- paid to a person named Shri Mahesh Bhupathi and claimed as expenditure. The facts in brief are that the assessee entered into a Joint development agreement (JDA) with Mr. Mahesh Bhupathi on 25.9.2004 for development of 3 acres of land belonging to Mr. Mahesh Bhupathi which was located at Jakkur. Thereafter the JDA was cancelled and the assessee agreed to pay a compensation of ₹ 8.50 crores to Mr. Mahesh Bhupathi, which was subsequently redu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit and loss account for A.Y. 2010-11 is disallowed as expenditure. 7.3 In the appellate proceedings, the Ld. CIT(A) noticed that an identical claim made by the assessee in A.Y. 2009-10 was disallowed by the A.O. and the same was confirmed by Tribunal also. Accordingly, he confirmed the disallowance made by the A.O. 7.4 We heard the parties and perused the record. We notice that the Ld. CIT(A) has extracted the decision rendered by coordinate bench of the Tribunal in A.Y. 2009-10 on an identical issue, which reads as under: 28. A perusal of the aforesaid clause would show that Mr. Mahesh Bhupathi agreed that his property would be sold in favour of the nominees of the Second party. We fail to see as to how in light of the aforesaid clause that the agreement in question cannot be said to be compensation agreement entered into for breach of the agreement dated 25.9.2004. It is also seen that in none of the registered documents by which the property of SRLPL was conveyed, is there a reference to the agreement between the assessee and Bhupathi. In these circumstances, we are of the view that the conclusion of the revenue authorities that the payment of ₹ 8.5 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue challenging the judgment of the Income Tax Appellate Tribunal ( Tribunal for short) dated 27.3.2015. Following question is presented for our consideration:- Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in rejecting the disallowance of ₹ 1,44,78,000/- made by the AO u/S. 40(a)(ia) of the Act by holding that the amendment to the proviso of the said section was retrospective in nature without appreciating that the Act specifically provides that the said proviso comes into operation w.e.f. 1.4.2013 and is prospective in nature and cannot be applied retrospectively? 2. It is not necessary to record background facts since the question of law raised by the Revenue is whether the second proviso to Section 40(a)(ia) of the Income Tax Act, 1961 ( the Act for short) would have retrospective efect. We may notice that the said proviso was inserted w.e.f 1.4.2013 and in essence, it provides that where an assessee fails to deduct whole or any part of the tax at source but is not deemed to be an assessee in default under the first proviso to Section 201(1), then for the purpose of clause 40(a)(ia), it shall be deem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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