M/S. ASHOK LEYLAND LTD.,CHENNAI vs. DCIT, NCC-8(1), LTU-II, CHENNAI

आयकर अपीलीय अिधकरण, ‘बी’
यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘B’ BENCH: CHENNAI

ीएबीटी. वक
, ाियक सद एवं
एवं
एवं
एवं

ीअिमताभशुा, लेखासद केसम

BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER

आयकरअपीलसं./ITA No. 2379/Chny/2024
िनधारणवष/Assessment Year: 2012-13

M/s. Ashok Leyland Ltd.,
No.1, Sardar Patel Road,
Guindy, Chennai-600 032. v.
The DCIT,
NCC-8(1), LTU-II,
Chennai-600 034. [PAN: AAACA 4651 L]

(अपीलाथ/Appellant)

(यथ/Respondent)

अपीलाथ क ओर से/ Appellant by :
Mr.R. Vijayaraghavan,
Advocate &
Mr. Vikram Vijayaraghavan,
Advocate
यथ क ओर से /Respondent by :
Mr.Nathala Ravi Babu, CIT
सुनवाईकतारीख/Date of Hearing
:
04.12.2024
घोषणाकतारीख /Date of Pronouncement
:
12.02.2025

आदेश / O R D E R
PER ABY T. VARKEY, JM:

This appeal has been preferred by the assessee-company against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC,
(hereinafter referred to as ‘Ld.CIT(A)‘), Delhi dated 19.07.2024 for the Assessment Year (hereinafter referred to as ‘AY‘)2012-13. 2. Ground No.1 raised by the assessee is general in nature, which was therefore not pressed by the Ld. AR and is therefore dismissed.

against the disallowance of u/s.14A come Tax Rules, 1962 [hereinafter oted are that, the assessee has e
,672/- in relation to which the llowance of Rs.33,15,155/- u/s 14A ed for earning such exempt income.
t, is noted to have rejected the assessee and thereafter invoke ted disallowance of Rs.3,11,55,28
to investments in terms of Rule
90,83,894/- by way of administra
, thereby making aggregate d appeal, the Ld. CIT(A) is noted to h ow the assessee is in appeal before parties. It was brought to our n s of Rs.420817.00 lacs as against on 31.03.2012. In light of the afor although it was in possession of m orrowed funds, but since its own fu stment made by it, the questi

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
of the Act read r referred to as earned exempt assessee had A of the Act by The AO, in the the voluntary ed Rule 8D. The 9/- by way of e 8D(2)(ii) and ative expenses isallowance of have confirmed us.
otice that, the investments of resaid fact, the ix funds, which nds were much on of making disallowance out of int
8D(2)(ii) didn’t arise. Th
Hon'ble Bombay High
(2014) 366 ITR 505
funds and other non-int tax free securities, im disallowing a part of int with rule 8D(2)(ii) of I note that the Hon'ble B
Utilities and Power Lt of law that, when there funds, the presumption free investment and adv by the Hon’ble Supreme
Ltd., reported in [201
Court in the case of So 130 taxmann.com 178
clarified that it is the as of the mixed funds the arbitrarily estimate a pr
Act. Thus, we note fro assessee had total own
ITA N
M/s
:: 3 ::

terest paid on borrowed funds in he Ld. AR brought to our notice the Court in the case of HDFC Bank wherein it was held that "where a terest bearing funds were more than mpugned order passed by the As terest payments under section 14A o
I.T Rules, 1962) needs to be set a Bombay High Court in the case of CI td. (2009) 313 ITR 340 has laid e are both interest free funds and i is that interest free funds were utili vances. Such a proposition of law h e Court in the case of CIT v. Relian
9] 410 ITR 466 (SC) and the Ho outh Indian Bank Ltd. v. CIT repo
8 (SC)] reiterated the position of sessee who has the right to assert f e investment was made, and the roportionate figure for disallowance om the factual matrix discussed s n funds more than Rs 4208 crores

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
terms of Rule decision of the k Ltd. v. DCIT assessee's own n investment in sessing Officer of the Act (read aside". We also IT v. Reliance the proposition nterest bearing zed for interest as been upheld nce Industries on’ble Supreme orted in [(2021) f law and also from which part
Revenue can’t u/s.14A of the supra, that the s and the total investment made only t investments of Rs.300
presumption laid down
(supra) is clearly applic presumption is factua disallowance made und
Rules, was not warrante
3.3
Coming to disallo
Special Bench of this Tr
(P.) Ltd. reported in [
the dividend yielding in disallowance under this also referred to the 8D(2)(iii) with referenc placed before us. Havin income was derived from whose 0.5% works out disallowance of Rs.33, further disallowance in Hence, respectfully follo
AO is directed to verify
ITA N
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to the tune of Rs. 1534 crores, incl
0 crores made during the year, n in the case of Reliance Utilities cable. The Ld. DR could not demon ally incorrect, therefore, accordin der Section 14Aread with Rule 8
ed and is directed to be deleted.
owance under Rule 8D(2)(iii), it is ribunal in the case of ACIT v. Viree
[2017] 82 taxmann.com 415, has vestments are to be considered in s Rule. In this regard, the Ld. AR fo computation of disallowance in ce to dividend yielding investmen ng perused the same, it is noted th m investments having value of Rs.1
to Rs.61,03,975/-. Having regard t
,15,155/- already offered by the terms of Rule 8D(2)(iii) comes to R owing the decision of Special Benc this computation provided by the as No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
uding the fresh therefore, the s & Power Ltd strate that this ng to us, the D(2)(ii) of the noted that the et Investment s held that only computation of or the assessee terms of Rule nts, which was hat the exempt
22,07,95,018/- o the suo moto assessee, the Rs.27,88,820/-.
ch (supra), the ssessee and re- compute the disallowan accordingly. This ground
4. Ground No. 3 is respect of wealth tax of 4.1
At the outset, the since in the assessee’s assessee in AY 2006-07
5. Ground No. 4 is a the claim of bala
Rs.15,71,32,419/- on t
2011-12. 5.1
The facts as noted machinery in FY 2010-1
20% in terms of Sect
&machinery was put to assessee had claimed 5
50%]. Further, accordi balance 10% of the eli
Act in the subsequent
ITA N
M/s
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nce under section 14A read with d is therefore partly allowed.
against the disallowance of deduc f Rs.11,63,372/-.
e Ld.AR for the assessee didn’t pre s own case, this issue was decid
7 in ITA No.2086/Mad/2010 and for . Therefore, this ground stands dism against the action of the lower auth ance additional depreciation a he assets which were put to use in d are that, the assessee had acquir
11 which was eligible for additional tion 32(1)(iia) of the Act. Since o use for less than 180 days in FY
0% of the additional depreciation i.
ng to the assessee, it was legally igible additional depreciation u/s 3
t year i.e. relevant FY 2011-12. No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
Rule 8D(2)(iii) tion claimed in ess this ground ed against the AY 2011-12 in missed.
horities denying amounting to n the earlier FY red new plant &
depreciation @
the new plant
Y 2010-11, the e. 10% [20% X entitled to the 2(1)(iia) of the The assessee however did not make before the Assessing O allow it. Aggrieved by t before Ld. CIT(A) who covered in favour of t identical issue including
Brakes India Ltd. Vs
Hinduja Foundries L rendered by this Tribun to 2011-12. However, a raised this claim in the same as the Hon’ble Su
CIT (284 ITR 323) h claim, which was othe relevant findings of the “20.2 The strict interpre been accepted in se juri ictional High Cour
(Madras) and CIT Vs
(Madras), since it is ag were introduced. In Ap no. 2836/Mds/2014 and petition dated 24.03.20
been followed by CIT(A)
2010-11 CIT(A), Che
Chennai-17/10834/2015
favour of the Appellant courts and the decision
ITA N
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this claim in the return of incom
Officer in the course of assessmen he action of the AO, the assessee p observed that the impugned claim the assessee by a series of judg g juri ictional Madras High Court s. DCIT (TCA No. 551 of 2013
Ltd. (281 Taxman 448) as we al in assessee’s own cases for earli according to Ld. CIT(A) since the as e return of income, the AO had rig upreme Court in the case of Goezte had prevented the AO from enterta erwise not made in the return o
. Hinduja Foundries Ltd. (2021) 281 Taxm gainst the purpose for which the beneficial pr pellant’s own case in AY 2005-06 and 2007-08
d ITA 2838/Mds/2014), in the order for misce
017, the Hon’ble ITAT has upheld this claim, w
) in AY 2009-10 (ITA no. 21/CIT(A)-5/2013-14
ennai-17/10740/2014-15 and AY 2011-12
5-16) as well. This issue is now squarely se t due to the favourable decisions of the juris in Appellant’s own case.

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
e, but raised it nt, who did not preferred appeal stood squarely gments on this in the cases of ) and CIT Vs.
ell as decisions er AYs 2009-10
ssessee had not htly denied the e India Ltd Vs aining any new of income. The r:- t has not ision of of 2013
tax Appellate Tribunal t before the ITAT, but not 20.4 Though, the Hon’b ruled that there are no power of the CIT(A) to which was not made in its latest decision in th
ITR 323 (SC) held that claim made during the in the return of income powers of CIT (A), in proceeding. Thus the additional depreciation o is therefore dismissed.”
5.2
Being aggrieved b now in appeal before us
5.3
Having heard bo impugned issue are not juri ictional Madras H assessee’s own case h acquired in earlier year which 50% of the eligib in that year [FY 2010-
ITA N
M/s
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d down that the CIT(A)has an amplitude of p claim and this decision of the Supreme Court e SC in another decision in M/s.National Therm
229 ITR 383 (SC) while upholding the power of to consider an additional claim raised by the A t claimed in the return of income.
ble Supreme Court has, in the above mentione explicit provision in section 251 of the act to cu o consider any additional claim made by the a the return of income, the Hon’ble Supreme Cou e case of M/s Goetze (India) Ltd. Vs. CIT (20
the AO has no power to grant deduction for a assessment proceedings after such claims is n e. Thus by corollary the same principle applie not admitting any additional claim during a ground raised by the Appellant towards c of Rs. 15,71,32,419/- is rejected. This ground o
(emphasis supplied) by the above order of Ld. CIT(A), t s.
oth the parties, we find that the t in dispute before us. It is noted th
High Court (supra) as well as th have held that, where new plant was put to use for less than 180 da ble 20% additional depreciation is al
11, in present case], then the asse

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
er such a course of originally me. The 187 ITR n 251 of nal claim
In fact, power to has also al Power income-
Appellant ed cases urtail the ssessee, urt has in 006) 284
dditional ot made es to the appellate claim of of appeal the assessee is merits of the hat the Hon’ble his Tribunal in t & machinery ays by virtue of llowed i.e. 10%
essee is legally entitled to the balance acquired assets in the Accordingly, in the pre depreciation amounting relevant AY 2012-13. 5.4
The sole ground o that, the assessee did way of revised return a could not be entertaine finding of Ld. CIT(A). I case of Goetze India L was restricted to the po deduction otherwise tha the power of the app
Instead, we find that, th
(229 ITR 383) has he been raised inadverten legal position, then suc that the appellate autho or fresh claim made by income. Our view is juri ictional
High
C
ITA N
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10% of the additional depreciation subsequent year [FY 2011-12, in sent case before us, the balance to Rs.15,71,32,419/- needs to be of the Ld. CIT(A) for denying the ab not raise this claim in the return o nd therefore the additional claim m ed. We however are unable to co t is noted that the Hon’ble Suprem
Ltd (supra) had made it clear tha ower of Assessing Authority to enter an by way of revised return, and it d pellate authority under Section 25
he Hon’ble Apex Court in the case o eld that if a claim is available in law ntly or on account of erroneous p ch relief cannot be shut for all time ority are vested with the powers to the assessee, which was not made further supported by the decisi
Court in the case of CIT

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
on such newly present case].
10% additional allowed in the bove claim was of income or by made otherwise, ountenance this me Court in the at their decision rtain a claim for did not impinge
54 of the Act.
f NTPC Vs CIT w which had not lea of complex es to come and o entertain new in the return of ion of Hon’ble
T
Vs
Perlo

Telecommunication a No. 413 of 2014) da law before the Hon’ble H
“1. Whether under Appellate Tribunal considered rectified course of assessm expenditure made return of income?
2. Whether under Appellate Tribunal w deduction or exem computation and cl
5.5
The Hon’ble High question in favour of the “8. In fact, the Trib the decision in Com
9. Thus, the power the Hon'ble Suprem legal position, the factual finding that by the Assessing O which is not a fres claiming expenditu tax return and in a downward adjustm the assessee had records and it com assessment procee assessee.
ITA N
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and Electronic Components Indi ated 20.09.2021 wherein one of t
High Court was as follows:- r the facts and circumstances of the case, th was right in holding that assessing officer d computation of income submitted the assess ment proceedings and allowed the claim through such revised computation and not thro the facts and circumstances of the case, th was right in holding that the assessee did not c ption or made a fresh claim for deduction, by f aiming deduction under section 37(1)?”
h Court is noted to have answe e assessee, by holding as under:- bunal took note of these decisions and had plac mmissioner of Income Tax Vs. Pruthvi Brokers &
in [2012] 349 ITR 336 (Bombay) and noted e before the Assessing Officer, it can be ma es and the juri iction of the appellate authoriti not been negated by the Hon''ble Supreme Co
No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
a Pvt Ltd (TC the question of he Income Tax r should have see during the for deduction ough a revised e Income Tax claim additional filing a revised red the above ced reliance on & Shareholders that even if a ade before the es to entertain ourt in Goetze r that the issue ty and that the Section 254 of n the dictum of ter noting this has recorded a was discussed a computation, ssessee is only original income make upward or ssee and when dent from the at the time of relief to the 10. The Tribunal to wherein the Board advantage of ignor to assist the taxpa claiming and secu initiative in guiding them indicate that 11. Further, the assessee, when ap the procedure to be the Circular is of t issued by the Inc approach the asse department should the Tribunal was expenditure was n powers conferred with.”
5.6
Following the abov
CIT(A) being an appella assessee’s claim for d
32(1)(iia) of the Act, w indeed entitled for the s on this issue and dire depreciation amounting allowed.
6. Ground No. 5 is a the weighted deduction expenditure incurred at 35(2AB) of the Act.
ITA N
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ook note of the Circular issued by CBDT date ordered that the officers of the Income Tax s rance of an assessee as to his rights. It is one ayers in every reasonable way, particularly in ring reliefs and in this regard, the officer sh g a taxpayer, where proceedings or other par some refund or relief is due to him.
Circular states that department should free pproached by them as to their rights and liabil e adopted for claiming refunds and reliefs. It ma the year 1955. Nevertheless, as per the rece come Tax Department as to how the depar essee, the Board has been consistent to s adopt an assessee friendly approach. In any e convinced that the claim made by the asse not a fresh claim. Therefore, the Tribunal had under Section 254 of the Act, which cannot ve decision (supra), we therefore ho te authority was unjustified in not e deduction of balance additional de hen on merits, he had held that the same. We therefore reverse the orde ect the AO to allow the balance 1
g to Rs.15,71,32,419/-. This groun against the action of the lower auth n claimed in respect of research &
the approved in-house R&D facility

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
ed 11.04.1955, hould not take of their duties the matter of hould take the rticulars before ely advise the ities and as to ay be true that ent notification rtment has to state that the event, on facts, essee towards d exercised its be found fault old that the Ld.
entertaining the epreciation u/s e assessee was er of Ld. CIT(A)
10% additional nd is therefore horities denying
& development y under Section 6.1
The facts as disc incurred scientific resea approved in-house R&D weighted deduction of R u/s 35(2AB) of the Act,
AO however noted that lower and therefore re extent of expenditure a @100% in respect of t weighted component of by the AO, as under:-
Nature of Expenditure
Claimed by the assessee
@200% Col.(1)
Revenue
Expenditure
433,89,46,988
Capital
Expenditure
275,69,98,352
Total
709,59,45,340
6.2
On appeal, the L assessee, by observing
“I have considered is not in line with deduction for R&D by the DSIR is the does not have any own. Hence the cla of the AO in restric
The Appeal on this 6.3
Now the assessee
ITA N
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cernible from records are that, the arch expenditure, both revenue & c
D facility. The assessee had accor
Rs.709,59,45,340/- being 200% of t in terms of Form 3CLA issued by t t the expenses certified by DSIR in estricted the weighted deduction @
approved by DSIR and allowed no he balance sum. Accordingly, the d deduction u/s 35(2AB) of the Act, w
Allowable u/s35(1) and 35(2) Col.(2)
Allowable u/s35(2AB)
Col.(3)
Total allow
Col. (4
216,94,73,494
216,73,17,000
433,67,90
137,84,99,176
133,30,55,000
271,15,54
354,79,72,670
350,03,72,000
704,83,44
d. CIT(A) dismissed the ground of as under:- the submissions of the Appellant but I do not h the provisions of section 35(2AB) which gr expenditure only on approval by DSIR. Form N basis on which the AO can grant weighted ded powers in deciding the quantum of weighted de aim of the Appellant on this ground is rejected cting the deduction to the amount certified by D ground is rejected.”
is in appeal before us.

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
e assessee had capital, at their rdingly claimed the expenditure he auditor. The Form 3CL was @ 200% to the rmal deduction disallowance of was worked out wable
4)
Excess claim disallowed
Col(4)-
Col.(1)
0,494
21,56,494
4,176
4,54,44,176
4,670
4,76,00,670
f appeal of the agree, since it rants weighted
No. 3CL issued duction and AO eduction on his and the action
DSIR is upheld.

both the parties and perused the hat, the assessee has an approved
SIR has issued approval in Form 3C d separate accounts for the R&D fa
3CLA. Having regard to the prov
Section 35(2AB) of the Act, it is the three conditions set out therei respect of the expenditure incurred to the AO however, since the exp unts had not been entirely certified orm 3CL, he had restricted the cla of the Act, only to the extent of e
DSIR. The Ld. AR brought to our not es, 1962 [herein after the Rules], w aining the approval from DSIR, as t the DSIR was required to certify t r the amount certified in Form 3
eligible for weighted deduction. It w underwent amendment by the Inc
016, wherein sub-clause (7A) was , hence applicable from AY 2017-18
legislature mandated the DSIR t

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
e records. The d in-house R&D
CA. Further, the cility which has visions of sub- noted that the in, for claiming at the in-house enditure as set d and approved im of weighted expenses which tice that Rule 6
which contained it stood then, the quantum of 3CL was to be was shown to us come Tax (10th amended with 8 and onwards, to quantify the quantum of deduction a 3CL. Hence, the positio that, the Form 3CL issue of weighted deduction u to the following, in ou claim weighted deduct entering into an agree recognition of the R&D conditions are met, the of the R&D facility i.e. F
35(2AB) of the Act. W squarely covered in as Tribunal in their own c
362/Chny/20204 where
3.4. We have hea record……. It is not once facility is ap u/s.35(2AB), irresp
R & D Facility has settled position as expenditure incurre until amendment w
1962 (hereinafter i
18). Therefore, the u/s.32(2AB) of the D facility. In othe expenditure quantif

-
Sundram F
4.3 on page
-
ACIT vs. v
(Mumbai - T
-
CIT v. M/s.
ITA N
M/s
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allowable u/s.35(2AB) of the Act in on prevailing prior to amendment o ed by DSIR was not relevant to asce u/s 35(2AB) of the Act. Accordingly, ur considered view therefore, the ion u/s 35(2AB), prior to AY 201
ment between the facility and the facility by DSIR in Form 3CM, and expenditure set out in separate au
Form 3CLA, will qualify for weighted
We further note that the impugne sessee’s favour by the decision re case for AY 2010-11 & 2011-12 in in at Para 3.4, it was held as under:
ard both the parties and perused the materia ted that DSIR is an authority for approval of R&
pproved, expenditure incurred by it qualifies pective of DSIR approval as per the law in force.
been approved as required by the authority s per the law in force is that once facility ed in this regard qualifies for deduction u/s.35(2
was brought in Rule 6(7A) of the of the Incom in short ‘the Rules’) w.e.f. 01.07.2016 (relevan e AO/Ld.CIT(A) erred in disallowing the weigh
Act on the expenditure incurred in an approved er words, deduction can’t be restricted to th fied by the DSIR before the AY 2017-18….”
asteners Ltd., v. DCIT (ITA No.3236/Chny/20
e 12
v. Crompton Greaves Ltd. [2019] 111 taxm
Trib.)
Wheels India Ltd. [2011] 336 ITR 513 (Madras

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
Part-B of Form of the Rule was ertain the claim
, having regard requirement to 17-18, was (a) e DSIR and (b) once these two udited accounts d deduction u/s d issue stands endered by this ITA Nos. 361-
:
al available on &D facility. And for deduction
. As noted, the i.e. DSIR. The y is approved,
2AB) of the Act me Tax Rules, nt to AY 2017- hted deduction d in-house R &
he amount of 17)in para no.
mann.com 338
)

-
Brakes Indi

ITA N
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a Limited vs. DCIT [2017] 56 ITR(T) 341 (Chen above therefore, we hold that th the deduction u/s 35(2AB) in the on of the disallowance of the weigh
,00,670/-. This ground is therefore a appeal of the assessee is partly allo d on the 12th day of February, 2025,
KLA)
MEMBER (एबीटी.
(ABY T. VA
याियकसदय/JUDICIA y, 2025. to:
nai / Madurai / Salem / Coimbatore.

No. 2379 /Chny/2024
(AY2012-13) s. Ashok Leyland Ltd.
nnai -Trib.) e AO was not e pre-amended hted component allowed.
wed.
in Chennai.
/-
वक
)
ARKEY)
AL MEMBER