THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1),, AHMEDABAD vs. M/S. ADANI LOGISTICS LTD.,, AHMEDABAD

ITA No. 2007/Ahd/2016 & C.O. No. 158/Ahd/2016 are appeal by the Revenue and cross objection of the Assessee preferred against the order of the

The assessee company is engaged in the business of Multi model transport operators, general carrier of international and domestic cargo within India and abroad by all modes and mixes such a rail, road, sea, air, inland water transport ropeways etc. Assessee filed its return on 21.09.2012 for assessment year 2012-13 declaring total of Rs. (-)19,88,09,556/-.

With regard to ground no. 1, ld. A.O. had discussed the issue at page no. 2 to 9 at para no. 2 and ld. CIT(A) has discussed the issue at page no. 2 to 10 at para no. 3 to 3.3. The Assessing Officer has observed Assessee has made investment of Rs.19.86 crores as on 31st March, 2012 whereas such value was Rs.16.75 crores as on 31st March, 2011. The Assessing Officer applied provision of Rule 8D read with Section 14A and made disallowance

As facts of the case for the present case are identical to the earlier case. Therefore, ld. CIT(A) has rightly granted relief to the assessee as there is no exempt income in the assessment year 2012-13 and we also draw support from the case of Corrtech Energy Ltd. 372 ITR 97 (Guj.) wherein it is held that the Tribunal had recorded the finding of the fact that assessee did not make any claim for exemption of any income from payment of tax. Hence, no disallowance could be made u/s. 14A of Income Tax Act. Therefore, respectfully following the above said judgment, we dismiss this ground of appeal.

Now we come to ground relating to deleting the addition of Rs. 16,33,143/- made u/s. 41(1) of the Act.

The Assessing Officer has observed that appellant has shown outstanding liability of Rs. 16,33,143/- in the name of various parties for a period exceeding three years and same has not been paid off even after lapse of three years which means that liability has ceased to exist as per Part 1 of Division 1 of the Limitation Act, 1963. The Assessing Officer has referred to provisions of section 41(1) of the Act and contended that where some benefit in respect of trading liability has been obtained by assessee, it shall be deemed to be profits and gains of business & profession. On the other hand, Appellant has argued that addition made by Assessing Officer in fact represents "receivable" being advance payment given to creditors for purchase of goods or for services hence

Therefore applying ratio of following the aforesaid judgment, we do not find any ambiguity in the order passed by the ld. CIT(A). Thus same is dismissed.

Ld. A.O. has discussed the issue at page no. 24 to 26 in para no. 6 and ld. CIT(A) has discussed the issue at page no. 24 to 28 in para 7 to 7.7. During the courses of assessment proceedings, Assessing Officer asked appellant to explain why it has not deducted TDS on payment of Rs.2,10,046/- made to Shreyas Relay System Limited when it has already deducted TDS on payment of volume discount to various vendors. The appellant's reply dated 11th March 2015 is reproduced at page 25 of assessment proceedings wherein appellant has explained that appellant has made payment to Shreyas Relay System limited and other 15 companies in respect of commission and brokerage for getting container cargo business from various parties and has also deducted TDS on such payment. It was also submitted that assessee company provides logistic services also to payment of Rs.2,10,046/- made to Shreyas Relay System Limited for which volume discount is given and on such discount provisions of TDS are not applicable hence no TDS was deducted.

In support of its contention, ld. A.R. cited a judgment of Hon’ble Gujarat High Court in the case of Gujarat Tea Processors & Packers Ltd V/s DCIT[2012] 28 taxmann.com 187 has held as under: "Section 194C, read with sections 194H and 40(a)(ia) of the Income-tax Act, 1961 -Deductions of tax at source - Contractors/Sub-contractors - Trade discount - Assessment year 2006-07 - Assessee was a manufacturer and seller of tea – Under sales promotion scheme introduced by assessee, based on quantity purchased, retailer was given discount- Assessing Officer issued a notice under section 148 to reopen assessment on ground that discount given by assessee was nothing but commission on which tax was to be deducted at source under section

And apart from above said judgment, Hon’ble Supreme Court has held in the case of CIT vs. Ahmedabad Stamp Vendors Association where in Hon’ble Court has held that cash discount given for bulk purchase of stamps does not attract provisions of section 194H. In our considered opinion, ld. CIT(A) has passed detailed and reasoned order and same does not require any kind of interference at our end. Thus, this ground of revenue is dismissed.

Now we come to ground relating to deleting the addition of Rs. 1,23,08,000/- made on account of disallowance of foreign exchange (Forex)loss.

The Assessing Officer stated that Appellant has failed to produce any material on record to show that said loss was not in relation with fixed assets or CWIP hence it is required to be treated as per provisions of Section 43A of the Act. The Assessing Officer has also treated such loss as notional loss and made disallowance of Rs. 1,23,08,000/-. On the other hand, Appellant has referred to submissions filed during the course of Assessment Proceedings along with notes forming part of Audited Annual Accounts and contended that loss arising on long term foreign currency loan used for acquisition of asset was already capitalized and foreign currency loan used for parking of deposits is treated as differed revenue expenditure as per guideline issued by Ministry of Corporate Affairs on 29th December, 2011. The Appellant has also argued that as loan has been used for day-to-day business activities and not for acquisition

In this case, loss recognized on account of foreign exchange fluctuation and same is subsisting liability and not merely a contingent or a hypothetical liability. Ld. A.R. cited an order of Hon’ble Apex Court in the case of Woodward Governor (2009) 312 ITR 254 (SC) wherein it is held “ loss suffered by the assessee on account of fluctuation in the rate of foreign exchange as on date of balance sheet as an item of expenditure, same to be allowed in favour of assessee.”

In the result, this ground of the revenue is dismissed.

Now we come to ground relating to deleting the addition of Rs. 20,77,500/- on account of disallowance of interest on advances for purchase of land. .

The assessing officer has observed that assessee has given advances for purchase of land in earlier Assessment Years and no interest disallowance has been made in Appellant's case while passing Assessment Orders for earlier Assessment Years on such advances. The Appellant in its written submission filed before Assessing Officer has explained that it has acquired land from all the parties except one party in subsequent Assessment Year and Appellant has also submitted ledger account of such parties to show that land has been actually acquired from such parties hence observation of Assessing Officer that Appellant has not purchased any land till date is incorrect. It is also observed that Assessing Officer has not established any nexus between use of borrowed funds and above advances hence disallowance is made on presumption. In

In view of the above, we dismiss this ground of appeal.

In the result, appeal of the Revenue is dismissed.

The ground no. 1 has been taken assessee that ld. CIT(A) has erred in upholding disallowance of professional fees of Rs. 8,58,750/- treating it as capital expenditure. Ld. A.O. has discussed the issue at page no. 9.12 in para no. 3 and ld. CIT(A) has discussed the issue at page no. 10 to 14 in para 4 to 4.3.

At the outset, ld. A.R. has fairly conceded that this ground of appeal is against the assessee in view of the ITA No. 2274/Ahd/2015 for assessment year 2011- 12 in assessee’s own case. ITAT has discussed the issue in its order at page no. 3 in para 8 and disallowed the claim of the assessee and upheld the order of the ld. CIT(A). Therefore, having parity with the Co-ordinate Bench decision, we dismiss this ground of C.O.

Now we come to ground relating to that ld. CIT(A) has erred in upholding addition of Rs. 4,79,056/- on account of employees contribution to PF and

At the outset, ld. A.R. has fairly conceded that in view of the GSRTC Ltd. 366 ITR 170 (Guj.) this ground of the assessee is not sustainable. Hence, same is dismissed.

In the result, appeals of the Revenue as well as C.O. of Assessee both are dismissed.