TMI Blog2019 (12) TMI 1670X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has not contested the said order. As against the above, during the relevant previous year, the entire project was completed and the FSI granted by the Government in lieu of the cost factor was in fact sold. It is, therefore, the reference made by the AO to the proceedings of A.Y. 2003-04 was illogical and uncalled for as the claim made in the year under appeal was not dependent upon that of the earlier year; and the CIT (A) was perfectly justified in refuting such argument canvassed by the AO. Since the Mayanagar project was approved on 26.11.1998, the benefit of the Notification No. 67/2010 dated 03.08.2010 and the corrigendum issued vide Notification No. 02/2011 Income Tax dated 05.01.2011 was not available - As it is noted that the inference drawn by the Assessing Officer is contrary to the statutory provisions set out under section 80IB(10) of the Act. If, one go through the provisions of S.80-IB(10) and notifications issued by the CBDT, it is found AO clearly erred in disregarding the proviso which mandates that the limitations prescribed in causes (a) and (b) were inapplicable to housing projects completed as per the scheme of Central or State Government. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction sought for vide his order dated 28.12.2017 passed u/s. 143(3) of the Act. We further noted that in arriving at his decision to delete the disputed disallowance during the year under consideration, the CIT (A) has also taken note of the aforesaid order dated 28.12.2017 passed u/s. 143(3) of the Act for A.Y. 2015-16 in paragraph 4.21 of his order. For all the above reasons, we are of the view that the denial of deduction claimed u/s. 80-IB(10) of the Act was unwarranted and unjustified. The reasoned order of the CIT (A) deleting the disallowance is in order and it does not call for any interference. Objection raised by the AO that the FSI granted was sold to a group entity at an inflated rate - As we find that the statute does not prohibit such sale to group concern. Further, the ready reckoner rate is not sacrosanct, and there might be innumerable reasons for demanding higher price. In any case, the transaction under consideration is supported by a valuation report submitted to A.O. in which the rate of FSI was supported with the help of three comparable instances. Further, the inference drawn by the Assessing Officer is based upon his own theory, and neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of expenditure under Rule 8D (2)(iii) - As facts with regard to exempt income earned for the year is not coming out from the orders of the lower authorities. Even, the assessee has not furnished any details with regard to exempt income earned for the year under consideration and hence, we are of the considered view that the issue needs to go back to the file of the AO. We, therefore, set aside the issue to the file of Ld.AO for the limited purpose of ascertaining the fact with regard to the exempt income earned for the year under consideration and restrict disallowance of expenditure u/s 14A to the extent of exempt income; if at all any exempt income is earned for the year under consideration. Insofar as, the arguments of the Ld. DR that if disallowances u/s.14A is restricted to the extent of exempt income, then the assessed income may go below the return income, which is not permissible under the law. We find that in the case of M/s Sundaram Multipap [ 2018 (4) TMI 1204 - ITAT MUMBAI] had considered an identical issue and by following another decision of co-ordinate bench in the case of TATA Industries Limited ( 2016 (7) TMI 1011 - ITAT MUMBAI] upra) held the issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the unambiguous language of clause 4.1 and clause 5.6 of the Industrial Park Scheme, 2008 it is not understood as to how the Assessing Officer had inferred that the industrial parks of the assessee, for which approvals were granted under 2002 Scheme were covered by the 2008 Scheme. Therefore, we are of the considered view that the rejection of the claim of the assesses which was in accordance with the statutory provisions and supported by requisite approvals and notifications was rightly reversed by the CIT (A). Further, a similar claim was made in A,Y, 2005-06 for a sum of Rs. 10,59,66,901/-. During the course of scrutiny, the Assessing Officer observed that in respect of the same properties the assessee had offered rental income as 'income from house property' in A.Ys 2001-02 to 2004-05 in the returns filed u/s. 139(1) of the Act. Hence, the treatment of such income from Industrial Parks as 'business income was not accepted by the Assessing Officer and, the claim of deduction u/s. 80-lA(4)(iii) of the Act was rejected. On same lines, the claim made u/s. 80-IA(4)(iii) for A,Y. 2006-07 was also declined. Since the orders of the Assessing Officer for both the years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0IB(13) r.w.s. 80IA(10) were clearly applicable against the assessee 4. Whether on the fact And circumstances of the case and in law the Ld. CIT(A) failed to appreciate the fact that the decision relied upon by him in the case of Aarti Project has been contested before the Hon ble High Court and the appeal is still pending. 3. The brief facts of the case are that the assessee is engaged in the business of development of immovable properties, including projects under Slum Rehabilitation Scheme of the Government of Maharashtra, in accordance with DCR 33(10). The assessee has filed its return of income for A.Y. 2013-14 on 30-11-2013, declaring total income of Rs. 63,72,61,220/- and which was revised on 31-03- 2015, declaring total income of Rs. 54,81,07,960/-. The case was selected for scrutiny and the assessment was completed u/s 143(3) of the Income Tax Act, 1961 on 12/03/2016 and determined total income of Rs. 95,64,40,510/-, by making additions towards disallowance of deduction claimed u/s 80IB(10) of the Income Tax Act, 1961. The assessee carried matter in appeal before first appellate authority and the ld. CIT(A), for detailed reasons recorded in appellate order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the tenability of the claim, the assessee submitted an exhaustive reply vide its letter dated 17.12.2015 which has been extracted on pages 2 to 11 of the assessment order. The Assessing Officer, however, was not inclined to accede to the pleadings made by the assessee mainly for the following reasons: (a) since the claim for deduction u/s 80IB(10) of the Act on deemed sale made in A.Y. 2003-04 was already rejected and It was not contested in appeal, there was no justification for seeking relief under this very provision in the year under consideration; (b) the benefit of the notifications dated 03.08.2010 and 05.01.2011 could be availed of in respect of housing projects approved by SRA on or after 01.04.2004 and before 31.03.2008, and since the requisite approval was granted to the assessee on 26.11.1998, the aforesaid notifications would not be applicable to the case of the assessee; (c) since the consideration for construction of the rehabilitation building was received in kind and not in cash/cheque, the benefit of S. 80-IB(10) of the Act was not available to the assessee; and (d) the FSI received under DCR 33(10) was sold to Fourjone Realtors Pvt Ltd, group conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received. In this case, the actual consideration is not cash, cheques or Its equivalent but is in terms of right to construct in the form of FSI/TDR, It may be mentioned here that though the above has been part of litigation between the department and the assessee, there has been no finality on the issue by the judicial authorities which would show the correct path to be adopted. The issue of claim of deduction u/s. 80-IB(10) of the Act on the transfer TDR is not accepted by the department The decision of the Hon 'ble Bombay High Court in CIT v/s. Sonasha Enterprises ITA appeal no. 1391 of 2012 has not been accepted by the department and SLP vide D. No. 11467/2015 is pending before the Hon ble Apex Court as per the official website of the Hon'ble Supreme Court F. Without prejudice to the points discussed above, it has been found that the assessee has transferred the TDR 29,050 sq. feet and received Rs. 39,79,94,100/- @ Rs. 13.672/- per sq. feet after effecting sales to M/s, Four/one Realtors Pvt Ltd., a group concern of the assessee company as is admitted by the assessee company vide submission dated 22.12.2015. The promoters of the assessee company and that of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reckoner rate of Rs. 11,520/-, ignoring detailed reasons brought out by the Ld.AO to deny the benefit. The Ld. DR, further submitted that the Ld.CIT(A) was erred in allowing the benefit, ignoring the fact that the provisions of section 80IB(13) r.w.s. 80IA(10) were clearly applicable against the assessee. He, further, submitted that the Ld.CIT(A) has also failed to appreciate the fact that the decisions relied upon by Ld.CIT(A), in the case of Arthi Project and constructions vs DCIT in ITA No. 4190/Mum/2016, dated 05/01/2017 was not accepted by the department and appeal their against was filed before the Hon ble Bombay High court. The Ld. DR, further submitted that this issue has been considered by the AO for AY 2004-05, where the assessee has accepted the findings of the AO and not preferred any appeal before the appellate authorities. However, for the year under consideration without there being any changes in facts, the assessee has claimed the benefit. The Ld. AO after considering the relevant facts has rejected the claim of the assessee for deduction u/s 80IB(10) of the I.T. Act, 1961 and his order should be upheld. 9. The Ld. AR for the assessee, on the other hand, stron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d date completion of project has no application, if such project is approved by central or state Government under any laws. It is an admitted fact that the project on which the benefit of deduction was claimed u/s 80IB(10) of the Act, was approved by the state Govt. of Maharashtra, under SRA scheme. In this factual background, if you examine the claim of the assessee, we find that the Government does not compensate the developers the cost of construction of the tenements in slum development projects but only grants FSI, which could be utilized by them either for construction of saleable area in other projects, or sold in open market as per their choice. Since, the assessee did not utilize the FSI of 29,050 sq. feet granted by the government in lieu of the cost suffered in undertaking the Mayanagar project as per DCR 33(10), it was entitled to sell it to anyone without any restriction. The assessee, therefore, sold the FSI generated from its Mayanagar project to Fourjone Realtors Pvt Ltd., a group concern, as per the then prevailing market rate. 11. The AO has denied the benefit on three grounds. In so far as, the objection of the Assessing Officer that since deduction u/s. 80IB( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il, 2004 but not later than the 31st day of March, 2005, within four years from the end of the financial year in which the housing project is approved by the local authority; (iii) in a case where a housing project has been approved by the focal authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority. Explanation.- For the purposes of this clause,- (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate In respect of such housing project is issued by the local authority; (b) the project Is on the size of 3 plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project earned out in accordance with a scheme framed by the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so untenable as held in various decisions, cited before and considered by the CIT (A) in paragraph 4.19 of his order holding to the contrary. In the premises, we are of the considered view that the CIT (A) was justified in rejecting the argument of the Assessing Officer that since the consideration was received in kind and not in cash/cheque, the assessee was not entitled to the deduction in paragraph 4.19 of his order The order of the CIT (A), therefore, does not call for any interference on this count too. 16. Most importantly, in A.Y. 2015-16 also, a similar claim for deduction u/s. 80-IB(10) of the Act was preferred in respect of the FSI granted and sold in identical fact-situation. We find that after taking note of the entire scheme, statutory provisions and notifications cited hereinabove, the Assessing Officer himself had granted the deduction sought for vide his order dated 28.12.2017 passed u/s. 143(3) of the Act. The following findings recorded by the Assessing Officer in the aforesaid order dated 28.12.2017 are noteworthy: 3.2 The submission of the assesses has been thoroughly considered with the documents annexed to the submission. It is claiming that constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neither supported by any independent verification nor after discrediting the valuation submitted by the assessee for valid reasons. We, therefore, are of the considered view that the CIT(A) was justified in refuting the aforesaid stand taken by the Assessing officer. 19. The other objection raised by the Assessing Officer vide ground No. 4, is that since the order of the Tribunal in the case of Aarti Projects and Constructions v. DCIT [ITA No. 4190/Mum/2016 dated 05.01.2017] was not accepted by the Department and appeal there against was filed before the Hon ble Bombay High Court and the CIT (A) ought not have relied upon the same. In this regard, it is noted that until and unless the order of the jurisdictional Tribunal is set aside or reversed by the Hon ble High Court, it holds the field and the authorities functioning within their jurisdiction are bound to follow the same. 20. Last but not the least, we may also refer to the brief note of the Addl. CIT, C.R-5, Mumbai dated 02.08.2019. As per this note, the disputed claim was rejected by the Assessing Officer in A.Y. 2003- 04 and it was also accepted by the assesses, and the disallowance made in the year under appeal was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of proportionate interest expenditure. 2. The learned CIT (A) ought to have directed the Assessing Officer to delete the disallowance of Rs. 273,97,518/- made by the Assessing Officer u/s. 14A r.w.r. 8D(2)(iii) of the Act in respect of other expenditure. 3. The learned CIT (A) ought to have directed the Assessing Officer to delete the disallowance made u/s. 14A of the Act while calculating the book pro fit u/s, 115JB of the Act 24. At the outset, the Ld. AR for the assessee submitted that the cross objection filed by the assessee is delayed by 77 days, for which necessary petition along with affidavit for condonation of delay has been filed explaining the reasons for delay in filing cross objection. The Ld. AR, further submitted that the assessee did not file further appeal against order of the Ld.CIT(A) in confirming additions made by the AO towards disallowance of expenditure u/s 14A, for want of proper advise, however while preparing for the hearing of appeal filed by the department, the assessee was advised by the counsel to challenge the issue of disallowances of expenditure u/s 14A of the Act, because such disallowance was not as per the law and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble Supreme court, in the case of Collector of land acquisition vs Mst. Katiji (supra) had considered condonation of delay in filing appeal and held that when, technicalities and merits are pitted against each other, the substantial justice should prevail over technical consideration. The Hon ble Court also explained that every day delay must be explained. In the light of above legal proposition, if we examine the case of the assessee, we find that the reasons given for not filing appeal or cross objection within time allowed under the Act, comes under the purview of reasonable cause as provided under the Act. We further noted that although, the assessee has not pressed the ground before the Ld.CIT(A), but the Ld.CIT(A) has decided the issue on merits. Further, the issue involved in cross objection filed by the assessee is with regard to disallowances of expenditure incurred in relation to exempt income u/s 14A of the Act. The provisions of section 14A is highly controversial and there are number of cases, which deal with the law as enumerated u/s 14A of the I.T. Act, 1961. As such, day by day the law has been evolved by various courts and Tribunals. Therefore, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial justice to the assesses, we condone the delay and admit the cross objection. 28. The assessee is relied upon the decision of ITAT, Mumbai, in the case of Galaxy Medical devices Pvt.Ltd. vs ITO in ITA No. 3218/Mum/2010 dated 30/09/2011. In this case also exactly an identical situation arose and it was resolved by observing as under:- 4. We have heard the arguments of both sides and also perused the relevant material available on record The learned D.R. has submitted that the disallowance on account of travelling expenses was made by the A.O. on agreed basis as the A.R. of the assesses had agreed for the said disallowance during the course of assessment proceedings. However, as held by the co-ordinate Bench of the Tribunal in the case of R. T. Balasuhramaniam vs. ITO reported in 50 ITD 513 (Mad) cited by the learned counsel for the assesse, it cannot be said that the assessee is not aggrieved by the order of assessment made by the A. O. on the basis of the agreement made by the AR. and consequently he cannot be denied the right of vindicating his grievance before higher forum......,...........,........................................... 29. Coming to case laws r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT vs. Reliance Utilities Power Ltd 313 ITR 340 (bom) and CIT vs HDFC Bank Ltd. (366 ITR 505(bom). The assessee has also relied upon the decision of Hon ble Supreme Court, in the case of CIT vs Reliance Industries Limited 410 ITR 466 (SC). The Ld. AR, further submitted that in respect of disallowances of expenditure under Rule 8D(2)(iii), the disallowances may be restricted to the extent of exempt income earned and only those investments, which have yielded such income be taken into account for arriving at the average value of investments, He, further submitted that if any suomoto disallowances made by the assessee exceeds the exempt income, it may be restricted to the extent of the exempt income. In this regard, he relied upon the decision of Hon ble Delhi High Court in the case of ACB vs ACIT (374 ITR 108) and CIT vs Interglobe Enterprises Ltd. In ITA No. 456/2016, dated 19/08/2016. The assessee has also relied upon the Special Bench decision of ITAT, in the case of ACIT vs Vireet Investments Pvt Ltd, 165 ITD 27 (Delhi). The ld. AR, further submitted that insofar as, re-computation of book profit u/s 115JB of the I.T. Act, 1961 towards disallowances of expenditure u/s 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low entire exempt income earned by the assessee for the year under consideration. In other words, it was argued that disallowances of expenditure should be restricted to the extent of exempt income earned for the year under consideration. 35. Having heard both the sides, we find merit in the arguments of the Ld. AR for the assessee for the reasons that the Hon ble Supreme Court, in the case of CIT vs Reliance Industries Limited(supra) had considered an identical issue and held that no interest disallowances can be made u/s 14A of the Act, if own funds are sufficient to coverup the value of the investments. The Hon ble jurisdictional High Court of Bombay, in the case of CIT vs Reliance Utility and Power Limited(supra) held that when, mixed funds including own funds are more than the value of the investments, then a general presumption goes in favor of the assessee that investments made in shares is out of own funds, consequently no disallowance could be made towards interest expenditure. A similar ratio has been laid down by the Hon ble Bombay High Court, in the case of CIT vs HDFC Bank Limited (supra). Therefore, we are of the considered view that the Ld. AO was erred in disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Multipap vs DCIT in ITA No. 5327/Mum/2015 and cross objection no. 272Mum/2017 had considered an identical issue and by following another decision of co-ordinate bench in the case of TATA Industries Limited (supra) held the issue in favor of the assessee and accordingly, we reject the contention of the Ld. DR. 37. Coming to ground No.3 of cross objection which assail, the disallowance made u/s 14A, while calculating the book profit u/s 115JB of the Act. We find that this issue has been squarely covered in favor of the assessee by the decision of ITAT, Mumbai bench in the case of Mrinalini Trading Company Ltd. Vs DCIT ITA No. 1211/Mum/ 2014, where the Tribunal by following the order of Tribunal Special Bench, in the case of ACIT vs Vireet Investments Pvt. Ltd(supra) held that computation of book profit in terms of clause (f) of Explanation (1) to Section 115JB (2) is to be made without resorting to computation as contemplated u/s 14A r.w. Rule 8D. The relevant findings of the Tribunal are as under:- 10. Coming to the additional ground raised by the assessee challenging the adjustment made towards book profit computed u/s 115JB of the Income-tax Act, 1961. The assessee contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the assessee s scheme was approved on 05.06.2006 and the provisions of section 80IA(4)(iii) required approval under the Industrial Park Scheme 2008,? 41. The brief facts of the case are that for the previous year relevant to the year under appeal, the assessee filed its return of income on 30.11.2014 declaring 'nil' income and a revised return was e-filed thereafter on 31.03.2016 repeating the same income. The return filed on 31.03.2016 was initially processed u/s. 143(1) of the Act, but later on selected for scrutiny under CASS. In response to the statutory notices, the assessee made due compliance. In the computation of book profits for the year under consideration, the assessee had not made any adjustment with respect to a sum of 30 crore, which represented the Debenture Redemption Reserve (hereinafter referred to as 'DRR' in short), created under the provisions of S. 117C of the Companies Act, 1956 out of the profits. Such amount, according to the assessee, was not a 'reserve' but in the nature of an ascertained liability. The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of Explanation l(b) to section 115JB. In the present case the terminology as well as the nature of the reserve set aside is in the nature of a reserve other than the specified reserve. It is therefore squarely covered within the ambit of disallowances for the purpose of calculation tax u/s. 115JB of the Act. The said addition has also been made in earlier assessment years. The assessee has stated that the CIT(A) has decided the issue m its favour. It is pertinent to state that the decision was not accepted by the Department and further appeal was preferred to the Hon'ble ITA T. The Hon ble ITA T vide order dated 4.5.2016 has dismissed the appeal in limine due to low tax effect without adjudicating upon merits. Considering the same and the fact that the addition of debenture redemption reserve has been added back to the book profit u/s. 115JB in A.Y. 2011-12 and 2012-13, to maintain the principle of consistency, the amount of debenture redemption reserve of Rs. 30,00,00,000/- is added back to the income for the purpose of calculation of tax u/s. 115JB of the Act 1961. 43. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, 1961. The Ld.CIT(A) without appreciating these facts has directed the AO to excluded DRR from book profit computed u/s 115JB of the I.T. Act, 1961. 45. The Ld. AR for the assessee, on the other hand strongly supporting order of the Ld.CIT(A) submitted that this issue is squarely covered in favor of the assessee by the decision of ITAT, Mumbai in assessee s own case for AY 2012-13, in ITA No. 1962/Mum/2017, where under identical set of facts , the Tribunal by following the decision of Hon ble Bombay High court in the case of CIT vs Raymond Ltd (2012) 21 taxmann.com 60 held that adjustment to the amount of DRR made, while computing the book profits u/s 115 JB of the Act is permissible and is within the purview of the law. The Ld. AR, further submitted that this issue has been considered by the Tribunal in various cases and after considering the arguments of the revenue, in light of the decision of SREI Infrastructure and Finance Limited vs CIT (supra) held that provision for DRR should be excluded from book profit computed u/s 115JB of the Act. The Ld.CIT(A), after considering relevant facts has rightly deleted additions made by the AO and his order should be upheld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held the stand of the assessee by relying on the judgment of the Hon'ble Bombay High Court in the case of Raymond Ltd,, [2012] 209 Taxman 65 (Bom) as well as the judgment of the Hon'ble Supreme Court in the case of National Rayon Ltd., 227ITR 764 (SC). Accordingly, the CIT(A) directed the Assessing Officer to re-compute the book profits for the purposes of Sec. 115JB of the Act after excluding the amount of Rs. 74,75,00,000/- set aside by the assessee as Debenture Redemption Reserve. Against such a decision, Revenue is in appeal before us. 4. Before us, the Id CIT-DR has reiterated the stand of the Assessing Officer, which is primarily to the effect that the impugned amount was merely a Reserve and, therefore, was not deductible while determining the book profits u/s. 115JB of the Act. 5. On the other hand, the learned representative for the assessee pointed out that the CIT(A) made no mistake in allowing the claim of the assessee, which is also in consonance with the decision of the Tribunal on a similar issue in the case of JSW Energy Ltd. [2014] 150 ITD 406 (Mumbai- Trib.). 6. We have carefully considered the rival submissions. In our considered opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriated Rs. 30 crores towards debentures redemption reserve out of the profits of the years. The ld. A.R. submitted that the assesse company has credited debentures redemption reserve to the extent of Rs. 30 crores under the provisions of section 117C of the Companies Act, 1956. While filing the return of income for A. Y. 2012-13 the said appropriation towards redemption reserve has been reduce from book profit as per explanation 1 to section 115JB of the Act. The reply of the assessee did not find favour with the AO and the AO came to the conclusion that the reserve set aside is in the nature of reserve which is not covered in the definition of specified reserve and therefore squarely covered within the ambit of disallowance for the purpose of calculation of book profit under section 115JB of the Act and added hack to the Income of the assessee by observing that in A. Y 2010-11 and 2011-12 also similar setting apart was added back to the profit of the assessee. 5. The id. CIT(A) allowed the appeal of the assessee by following the decision of Hon'ble Jurisdictional Bombay High Court in the case of C1T vs. Raymond Ltd [2012] 21 taxmann.com 60 (Bom). 6. The Ld.AR, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned, direct, by order, the company to redeem the debentures forthwith by the payment of principal and interest due thereon. (5) If default is made in complying with the order of the Tribunal under sub-section (4), every officer of the company who is in default, shall be punishable with imprisonment which may extend to three years and shall also be liable to a fine of not less than five hundred rupees for every day during which such default continues., 50. We, further, noted that the Tribunal has decided this very issue in favour of the assessee earlier in the case of Rachana Finance Investment P, Ltd. and Repute Properties P. Ltd. for A.V, 2012-13 [ITA Nos. 5817 5816/Mum/2015 dated 31.05.2017] too. The Tribunal after considering the facts of the case and the binding judgment of the Hon'ble Bombay High Court in the case of CIT vs. Raymonds Ltd. (2012) 21 taxmann.com 60, the issue was decided in favour of the assesses by observing as under: 7. In the similar case ITAT Ahmadabad Bench in the case of ACIT vs. Genus Electrotech Ltd (2016) (161 ITD 644 (Ahd - Trib) has held that the adjustment claimed by the assessee for Debt Redemption Fund was declined with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO has followed binding decision of the jurisdictional High Court, which cannot be found fault with. 52. In view of the above, and considering facts and circumstance of this case, we are of the considered view that the amount of Rs.30 crores set apart was undoubtedly an ascertained liability and not a 'reserve covered by clause (b) of Explanation (1) to S. 115JB of the Act, as inferred by the Assessing Officer and hence, the AO was, therefore, unjustified in holding such amount as covered within the ambit of disallowance provided in clause (b) of Explanation (1) to S, 115JB of the Act. The CIT (A), in our considered view, was perfectly in order in deleting such disallowance and his order, on this count, does not call for any interference for all the aforesaid reasons. 53. During the course of the hearing, in support of his attack to the order of the CIT (A), the D.R. placed reliance on the judgment of the Hon ble Delhi High Court in the case of SREI Infrastructure Finance Ltd.v. Addl. CIT (281 CTR 532), rendered on 13.02.2015 wherein it has been held that the amount transferred to the special reserve pursuant to the provisions of S, 45-IC of the Reserve Bank of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Tribunal, even after considering the aforesaid judgment of the Hon'ble Delhi High Court had decided the issue in favour of the assessee. In the premises, the ratio laid down in the aforesaid judgment of the Hon'ble Delhi High Court would not be applicable to the case of the assessee. 55. In this view of the matter and consistent with view taken by the coordinate bench, we direct the AO to delete additions made towards provisions for DRR to book profit computed u/s 115JB of the I.T. Act, 1961. 56 The next issue that came up for our consideration from ground No.2 of revenue appeal is rejection of deduction u/s 80IA(4) of the I.T. Act, 1961 amounting to Rs. 12,62,73,967/-. The Ld. AO has rejected deduction claimed towards notified industrial park u/s 80IA(4), on the ground that the benefit of the Industrial Park scheme, 2008 was not available to the assessee, since it was received the requisite approval 05/06/2006. The Ld. AO, further observed that the completed assessment for AY 2008-09 and 2009- 10, granting deduction u/s 80IA(4) of the Act, were re-opened and the objection received by the assessee were rejected. Therefore, he opined that assessee is not entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strial parks had to start operations between 1.4.1997 to 31.3.2002. This was subsequently amended to Industrial Parks to be set up by 31.3.2006. Now it is noted that the Industrial Parks developed by the appellant are under the Scheme of 2002 and are operative prior to 1.4.2006. The approvals by the Ministry of Commerce and the CBDT notifications clearly state so. Once the conditions stipulated are satisfied, the benefit is available for 10 consecutive years in a block of 15 years. The first year of claim was 2005-06. The claim for A. Y. 2005-06 and A. Y. 2006-07 has been upheld all the way up to the Hon'ble Bombay High Court. The assessment year before me is AY 2014-15 which is the last year of the claim. Earlier the objection raised was that the CBDT notification was received in Previous Year relevant to AY 2007- 08 and hence deduction was not allowed in A Y 2005-06 and 2006-07. The claim was allowed in AY 2007-08. It was allowed in AY 2008-09 and AY 2009-10 also though subsequently notice u/s. 148 to deny the claim was issued which was challenged by way of Writ Petitions by the appellant and is subjudice (discussed earlier). The claim has been allowed in subsequent assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified the said Industrial Park vide notification No. 129/2006 and 176/2006 dated 05/06/2006 and 12/06/2006 respectively. Since, the industrial parks of the assessee were duly approved by the DIPP and also, notified by the CBDT, the inference drawn by the AO to the contrary was unjustified and unwarranted. The Ld. AR further submitted that if you go through clause 4.1 and clause 5.6 of the Industrial Park, Scheme, 2008, it is not understood as to how the Ld.AO had inferred that the industrial parks of the assessee for which approvals were granted under 2002 Scheme were covered by the 2008 scheme. The Ld. AR, further submitted that a similar claim was made in AY 2005-06 and AO was not accepted the claim of the assessee. The ld. CIT(A) has reversed the findings of the Ld.AO for both the years and the revenue carried the mater unsuccessfully in further appeals to the Tribunal and Tribunal had accepted the fact that the assessee s industrial parks are covered under Industrial Park Scheme, 2002 and also notified by the CBDT and hence, the assessee is eligible for deduction u/s 80IA(4) of the I.T. Act, 1961. Although, the revenue has challenged the matter before the Hon ble High Court, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned by the provisions of that Scheme to the extent it is not in contravention with the provisions of Act, as amended from time to time. 61. In view of the unambiguous language of clause 4.1 and clause 5.6 of the Industrial Park Scheme, 2008 extracted hereinabove, it is not understood as to how the Assessing Officer had inferred that the industrial parks of the assessee, for which approvals were granted under 2002 Scheme were covered by the 2008 Scheme. Therefore, we are of the considered view that the rejection of the claim of the assesses which was in accordance with the statutory provisions and supported by requisite approvals and notifications was rightly reversed by the CIT (A). Further, a similar claim was made in A,Y, 2005-06 for a sum of Rs. 10,59,66,901/-. During the course of scrutiny, the Assessing Officer observed that in respect of the same properties the assessee had offered rental income as 'income from house property' in A.Ys 2001-02 to 2004-05 in the returns filed u/s. 139(1) of the Act. Hence, the treatment of such income from Industrial Parks as 'business income was not accepted by the Assessing Officer and, the claim of deduction u/s. 80-lA(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... units located in Industrial Park were completed and the completion certificates were also obtained by 24h December 2003, a finding given by the Id CIT(A) and not controverted by the Id. D.R. Under these circumstances, we do not find any infirmity in the order of the CIT(A) allowing the claim of deduction u/s 80IA(4)(iii). The ground No. 1 raised by the Revenue is accordingly dismissed. 62. It would not be out of place to mention here that the aforesaid order of the Tribunal was carried in proceedings u/s. 260A of the Act by the revenue but in vain. The Hon ble High Court vide their judgment dated 22.02.2013 rendered in ITA Nos. 71 and 72 of 2012, had dismissed such appeals. Further, in the subsequent year, i,e. A.Y. 2007-08, similar claim preferred was granted after due verification vide assessment order dated 30,12.2008. In A.Y. 2008- 09 also, claim u/s. 80-IA4(iii) of the Act made by the assessee was allowed in the order passed u/s. 143(3) of the Act dated 24.12.2010 and in respect of which proceedings u/s. 147 of the Act were initiated, and the matter is subjudice before the Hon'ble High Court. In any case, it is on the reopening part and not on the merits. 63. Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng paragraphs No. 28 to 31 of CO.No. 163/Mum/2019 shall mutatis mutandis apply to this cross objection as well. Therefore, for detailed reasons recorded in preceding paragraph, we condone delay in filing cross objection and admit the issue for adjudication on merits. 68. The facts and issue involved in this cross objection filed by the assessee is identical to the facts and issue which we had considered in preceding paragraph in CO. 163/Mum/2019 for Asst. Year 2013- 14. The reasons given by us in preceding paragraph No. 35 to 39 shall mutatis mutandis apply to this cross objection as well. We, therefore, for detailed reasons recorded in preceding paragraph in CO.163/Mum/2019, direct the AO to follow the findings of the Tribunal for Asst. Year 2013-14 and restrict disallowances of expenditure u/s 14A of the Act, to the extent of exempt income earned for the year. We, further direct the AO to delete adjustment made to book profit computed u/s 115JB of the Act, towards disallowance u/s 14A of the Income tax Act, 1961. 69. In the result, cross objection filed by the assessee is treated as allowed for statistical purpose. 70. As a result, appeals filed by the revenue for AY 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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