M/S. BANCO PRODUCTS (INDIA) LTD.,VADODARA vs. THE DY.CIT., CIRCLE-1(1)(1), VADODARA

PDF · subscribers
ITA 2820/AHD/2015Status: DisposedITAT Ahmedabad13 December 2017AY 2011-125 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, following its own previous decisions and the Gujarat High Court's ruling, partly allowed the disallowance under Section 14A and allowed the deduction under Section 80IA(4). The issue regarding re-computation of sales value of power was also allowed.

What were the facts?

The appeals concerned disallowance under Section 14A and denial of deduction under Section 80IA(4) for assessment years 2011-12 and 2012-13. The assessee argued that these issues were decided in its favor in a previous assessment year.

What were the issues?

Whether disallowance under Section 14A and denial of deduction under Section 80IA(4) were justified, considering previous tribunal decisions. The re-computation of sales value of power was also an issue.

Which sections of the Income-tax Act were involved?

Section 14A,Section 80IA(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: SHRI N.K. BILLAIYA & SHRI S. S. GODARA

For Appellant: Shri Sanket Bakshi, AR

PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. ITA Nos. 2820 & 2821/Ahd/2015 are appeals by two separate appellants preferred two separate orders of the Ld. CIT(A)-1, Vadodara dated

ITA Nos. 2820 & 2821/Ahd/2015 2 . A.Ys. 2011-12 & 2012-13 21.08.20015 & 20.08.2015 respectively for A.Ys. 2011-12 & 2012-13 respectively.

2.

Since the issues are common in both these appeals, they were heard together and are disposed of by this common order for the sake of convenience and brevity.

We will first take up ITA No. 2820/Ahd/2015 for 2011-12

3.

The assessee has raised three substantive grounds of appeal. Ground no. 1 & 2 relates to the disallowance made u/s. 14A of the Act and ground no. 3 relates to the denial of deduction u/s. 80IA(4) of the Act.

4.

At the very outset, the ld. counsel pointed out that the issues have been considered and decided by the Tribunal in assessee’s own case in A.Y. 2008-09. Copy of the order was furnished. The ld. D.R. fairly conceded to this.

5.

We have given a thoughtful consideration to the orders of the authorities below vis-à-vis the order of the Tribunal in ITA No. 75/Ahd/2012. We find force in the contention of the ld. counsel. Issue raised vide ground no. 1 was considered by the Tribunal in A.Y. 2008-09 and the relevant findings of the Tribunal read as under:- 5. We have heard both the sides and perused the material on record. We have also gone through the orders of the authorities below as well as the judgment relied upon by the ld. counsel. We find that assessee has not given details as to when shares were acquired and what was the source of financing cost of acquisition of shares in the earlier year and in the current year. We observed that It is also not disputed that the assessee has earned exempt income

ITA Nos. 2820 & 2821/Ahd/2015 3 . A.Ys. 2011-12 & 2012-13 because of which the expenditure related to earning of such income would be disallowable in terms of the provisions of sec. 14A of the act. After considering the totality of the facts of the case about availability of sufficient own funds, we exclude interest components of Rs. 88,991/- out of the total disallowance of Rs. 3,19,784/- and restrict the disallowance to Rs. 2,30,793/-. Therefore, this ground of the assessee is partly allowed.

6.

In the light of the afore-stated findings of the Co-ordinate Bench this year, the disallowance shall be restricted to Rs. 128880/-. Ground no. 1 & 2 are partly allowed.

7.

Issues raised vide ground no. 3 was considered by the Tribunal at Para 7 of its order and the relevant findings read as under:- 9. We have heard both the sides and perused the material on record. We have noticed that the ld. CIT(A) reported in his decision that the case of Claris Life Sciences Ltd. was distinguishable from the case of the assessee as the facts are different in as much as in the case of the assessee the approval was received in F.Y. 2008-09 i.e. after F.Y. 2007-08 was already over .He has also reported that even the application seeking the approval was made by the assessee in the F.Y. 2008-09. During the course of appellate proceedings before us the assessee has furnished paper books.We have perused the paper book furnished by the assessee and find that as per page no. 146 of this paper book the assessee claim that application for approval of in-house research and development was made on 22-12-2006. In order to verify the same we have gone through the pages of paper book and find that as per para 43 of page no. 235 It was stated that application to the prescribed authority was made on 26-06-2008. We have further verified from page no. 162 in the paper book that a letter dated 24-10-2008 was addressed to the assessee from the Ministry of Science and Technology Department of

ITA Nos. 2820 & 2821/Ahd/2015 4 . A.Ys. 2011-12 & 2012-13 Scientific and Industrial Research Training providing reference of the application of the assessee dated 26.06.2008. The claim of the assessee that it had applied on Dec 22, 2006 could not be substantiated in view of supporting material indicating that assessee had applied on 26/06/2008. We observed that above findings throw lights on the contentions that the facts of the case of the assessee are distinguished from the decision of the case of Claris Life Sciences Ltd., In view of contradictory facts and supporting evidential material found to be existing as elaborated supra, we considered it will be more appropriate to restore the issue of applicability of the decision in the case of the Claris Life Sciences Ltd to the file of the assessing officer to decide a fresh after requisite verification and examination of materials as stated supra after providing due opportunities to the assessee.

8.

Respectfully following the findings of the Co-ordinate Bench (supra), we direct accordingly. Ground no. 3 is allowed for statistical purpose.

9.

Ground no. 4 & 5 relates to the re-computation of sales value of power.

10.

Similar issue arose in assessee’s own case in A.Y. 2008-09 which was considered by the Tribunal in ITA No. 75/Ahd/2012 and the relevant observations of the Co-ordinate Bench read as under:- 6.1 We have already decided the similar matter in favour of assessee in the A.Y.2008-09 in the case of Banco Aluminium Ltd.. In view of the above stated facts and legal findings, respectfully following the Hon’ble Gujarat High Court in the case of Alembic Ltd. as supra we allow this ground of the assessee.

ITA Nos. 2820 & 2821/Ahd/2015 5 . A.Ys. 2011-12 & 2012-13 11. Respectfully following the same, ground no. 4 & 5 are allowed.

12.

In the result, the appeal of the assessee is partly allowed.

ITA No. 2821/Ahd/2015 for A.Y. 2012-13.

13.

Grievance raised vide ground no. 1 is identical to the grievance raised vide ground no. 3 of ITA No. 2820/Ahd/2015 (supra). For our detailed discussion therein, we order accordingly.

14.

Grievance raised vide ground no. 2 & 3 are similar to the grievance raised vide ground no. 4 & 5 of ITA No. 2820/Ahd/2015 (supra). For our detailed discussion therein, we order accordingly.

15.

In the result, the appeal filed by the Assessee is allowed.

Order pronounced in Open Court on 13 - 12- 2017 Sd/- Sd/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad: Dated 13/12/2017 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →