TMI Blog2018 (1) TMI 1649X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s. 80IA of the Act - HELD THAT:- We find that similar addition was made by the Assessing officer in the assessment year 2008-09 and the CIT(A) has confirmed the same. On appeal by the assessee, the assessee did not press this ground before the Tribunal. Therefore, this addition was sustained. Since the facts of the present year is similar to that in the year 2008-09, we reverse the order of the CIT(A) and restore that of the Assessing officer. Hence, this ground of revenue is allowed. Disallowance u/s 14A - Assessee s counsel is making a plea that investments made by the assessee company in the present case were strategic investments - HELD THAT:- We set aside the order of the CIT(A) and remit the matter back to the file of the Assessing Officer, who shall examine the pattern of holdings in the group companies and decide the issue accordingly. This ground of the revenue is allowed for statistical purposes. Deduction under the head pooja festival expenses under the head Charity Donation expenses - AO observed that these expenses are not relatable to business purposes of the assessee thus disallowed - HELD THAT:- We find that the CIT(A) after considering the CBDT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kshra, CIT DR ORDER Per Pavan Kumar Gadale, JM Both the appeals filed by the revenue are directed against the separate orders of the CIT(A)-Raipur, both dated 25.9.2014 for the assessment years 2009-2010 2010-2011, respectively. First, we take up the appeal in ITA No.363/Rpr/2014: A.Y. 2009- 2010. 2. Ground No.1 of appeal reads as under: Whether in law and on facts circumstances of the case, the CIT(A) has erred in allowing adding of the profit on sale of fly ash bricks amounting to ₹ 4,05,493/- for the purpose of calculation of deduction under section 80IA of the I.T.Act, 1961. 3. Facts in brief are that the Assessing Officer observed that the assessee is engaged in the business of steel manufacturing-sponge iron Ferro Alloys and generation of power. The fly ash is a by-product generated out of the said generation activity of electricity. During the assessment proceedings, the AO noticed that the assessee has included sale of fly-ash bricks of ₹ 31,85,628/- in the total sale of power division and has claimed deduction u/s. 80IA on the entire profit. The Assessing officer examined the sales account of power division and found that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee. Since the 40% of ₹ 5,87,63,703/- i.e,. ₹ 2,35,05,,481/- has been reduced from the income of power division, the eligible profits of power division shall be increased to the extent of ₹ 2,35,05,481/-. Accordingly, the Assessing Officer disallowed the balance amount of ₹ 3,52,58,222/-. 11. On appeal, the CIT(A) deleted the addition following the order in assessment year 2008-09 in Appeal No.077/10-11 dated 15.7.2011. 12. After hearing both the sides and perusing the orders of lower authorities, we find that this issue had come up for consideration before the Tribunal in the assessment year 2008-09 in assessee s own case in ITA No.203/BLPR/2011, wherein, the Tribunal has restored the issue to the file of the Assessing officer on the following directions: 22. On this issue we have heard both the sides. We have been informed that the forward contract was entered into by the assessee to hedge the loss in respect of sale of carbon credits. Since we have held that the receipts from sale of carbon credit were in the nature of capital receipt, therefore, the consequence is that the impugned loss shall also be a capital loss. The pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everse the order of the CIT(A) and restore that of the Assessing officer. Hence, this ground of revenue is allowed. In result, appeal filed by the revenue is allowed for statistical purposes. Now we take up ITA No.364/Rpr/2014: A.Y. 2010-2011. 15. The revenue has taken the following grounds of appeal: 1. Whether in law and on facts circumstances of the case, the CIT(A) has erred in deleting the disallowance of ₹ 2,03,73,385/- u/s. 14A of the I.T.Act. 2. Whether in law and on facts circumstances of the case, the CIT(A) has erred in deleting the addition of ₹ 25,02,,011/- out of disallowance made by the AO on account of Pooja and festival expenses thereby giving relief of ₹ 6,54,900/-. 3. Whether in law and on facts circumstances of the case, the CIT(A) has erred in deleting the disallowance of ₹ 21,94,020/- on account of share capital expenses. 4. Whether in law and on facts circumstances of the case, the CIT(A) has erred in deleting the disallowance of ₹ 77,58,654/- on account of Social Welfare expenses which have not been incurred wholly and exclusively for the purpose of business. 5. Whether in law and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r statistical purposes. 20. Apropos Ground No.2 of appeal, the facts are that the Assessing officer found that the assessee has claimed deduction under the head pooja festival expenses of ₹ 15,17,117/- and ₹ 16,38,894/- under the head Charity Donation expenses. The Assessing officer observed that these expenses are not relatable to business purposes of the assessee and, therefore, disallowed the same following the decision of Hon ble Jurisdictional High Court in the case of Hira Ferro Alloys vs JCIT, 326 ITR 261 (Chhatt) 21. Before the CIT(A), the assessee submitted that the expenses incurred towards charity and donation were in the nature of expenses towards Corporate Social Responsibility and Pooja expenses were incurred for independence day, republic day, viswakarma Pooja celebration and are allowable as business expenditure. The assessee also cited CBDT Circular No.17(F.No.26(2)-II-IT/43 dated 6.5.1983 Circular No.13A/20/68-IT(A-II) dated 3.10.1968 wherein, it was emphasized that expenses incurred on the occasion of Diwali and Mahurat are in the nature of business expenditure and it was not lay down any monetary limits for the purpose of allowance of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to the work, which are recurring in nature. The CIT(A) has deleted the addition after properly appreciating the facts of the case. Hence, we confirm his order and reject the ground of appeal of the revenue. 29. The next issue relates to deletion of disallowance of ₹ 77,58,654/- on account of Social Welfare expenses which have not been incurred wholly and exclusively for the purpose of business. 30. The Assessing Officer has claimed deduction for an amount of ₹ 77,58,654/- on account of social welfare expenses for development of various facilities for public of nearby villages like construction of ponds, organizing of medical camps, promotion of education facilities, contribution to gram vikas samitees for various development works to earn goodwill in the society. The Assessing Officer rejected the explanation of the assessee and disallowed the claim of the assessee. 31. On appeal, the CIT(A) observed that there is no dispute to the genuineness of claim of expenditure i.e. incurrence of expenditure and payment thereof. The CIT(A) following the decision in the case of CIT vs. Modi Industries Ltd., 327 ITR 570, the decision of Karnataka High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
