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TMI Blog2016 (7) TMI 1642X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. 3. Shri Shiva Srinivas, ld. Departmental Representative submitted that while computing the income u/s 115JB of the Act, the Assessing Officer has taken into consideration the disallowance made by him to the extent of Rs. 75,16,020/- u/s 14A of the Act. The Assessing Officer added the disallowance made u/s 14A of the Act to the book profit computed under the provisions of the Companies Act. On appeal by the assessee, the CIT(A) allowed the claim of the assessee on the ground that the investments were made in the earlier previous year and some of the investments were made in the subsidiary companies. The CIT(A) has not considered the inclusion of disallowance made by the Assessing Officer u/s 14A of the Act while computing he book prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration. Rule 8D clearly says that the disallowance has to be made if the Assessing Officer was not satisfied with the correctness of the claim of expenditure or where the assessee claims that no expenditure was incurred, by applying the provisions of sub-rule (2) of Rule 8D. The disallowance shall be aggregate of the amount as computed under Rule 8D(2). Rule 8D(2)(iii) clearly says that an amount equal to 0.5% of the average value of the investment, income from which does not or shall not form part of the total income, as appearing in the balance sheet of the assessee on the first day and the last day of the previous year. The Assessing Officer in the impugned order at page 3 has found that the value of the investment as on 31.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary or holding company of the assessee. Since such an exercise was not done by both the authorities below, this Tribunal is of the considered opinion that the mater needs to be reconsidered. Apparently few investments were made during the year under consideration. The order of this Tribunal for the earlier assessment years viz. 2010-11 and 2011-12 is not applicable to the facts of this case. Therefore, the Assessing Officer has to reexamine the matter afresh by taking into consideration all the investments made by the assessee and thereafter decide the same in accordance with law. Accordingly, the orders of the lower authorities are set aside and the disallowance made by the Assessing Officer u/s 14A is remitted back to the file of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in M/s Shriram Transport Finance Company Ltd. Moreover, in the case before us, the royalty was paid to a Trust and not to a group company, therefore, the facts are not identical, hence, order of this Tribunal in the case of M/s Shriram Transport Finance Company Ltd. is not applicable in the case of the assessee. 8. On the contrary, Shri R. Sivaraman, ld. Counsel for the assessee submitted that similar royalty was paid to Shriram Chits & Investments Pvt. Ltd and the Assessing Officer disallowed the claim of the assessee. This Tribunal found that the payment was made to Shriram Chits & Investments Pvt. Ltd for the non-exclusive use of the logo based on turnover and was not a lump sum payment. The assessee has no right over the logo. What was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee now claims that the logo belongs to Shriram Ownership Trust was used by the assessee in its business activity and payment was made on turnover basis. The question arises for consideration is whether such payment is an allowable business expenditure u/s 37(1) of the Act. This Tribunal is of the considered opinion that when Shriram Ownership Trust is an independent statutory body, being a Trust, the assessee has to necessarily make payment for using the logo to Shriram Ownership Trust and such payment has to be at the market rate. Therefore, this payment of Rs. 35,87,560/- being an expenditure for using logo is an allowable expenditure u/s 37(1) of the Act. Therefore, this Tribunal do not find any reason to interfere with the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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