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2023 (7) TMI 1378 - AT - Income TaxDisallowance u/s 14A - claim of interest - HELD THAT - Both the parties submitted that this issue is squarely covered in assessee s own case by Co-ordinate Bench of this Tribunal in 2020 (10) TMI 1021 - ITAT AHMEDABAD wherein the Hon ble ITAT remanded the matter back to the Assessing Officer for fresh adjudication to examine the facts and figures of the case in the light of our observations made above in order to arrive at a final conclusion as to whether disallowance u/s 14A is to be made and if so then the amount thereof which in no case should exceed the exempted income earned by assessee during the year under appeal. Nature of expenses - Guarantee fees paid to Govt. of Gujarat related to capital work-in-progress which needs to be capitalized - assessee submitted that the certificate of utilization was already furnished before the Ld. CIT(A) stating that the loans on which guarantee fees was paid were utilized for construction of power plant and there was no capital work-in-progress in respect of such loans borrowed - HELD THAT - As decided in own case in 2020 (10) TMI 1021 - ITAT AHMEDABAD wherein CIT(A) directed to verify the certificate filed during the appellate proceedings that the loans on which guarantee fees was paid were utilized for construction of power plants at that time and there was no capital work-in-progress in respect of such loans during the Financial Year 2014-15. Both the assessee counsel as well as the Ld. D.R. could not place on record what is the giving effect order passed by the A.O. thereafter pursuant to the direction of the Ld. CIT(A). Therefore this ground no. 2 is also set aside to the Assessing Officer for proper verification and adjudication. Disallowance of prior period expenses and prior period income - HELD THAT - Respectfully following the order passed by the Coordinate Bench of this Tribunal for A.Ys. 2010-11 2011-12 we are disposing of these grounds by setting aside the issue to the file of the Ld. AO for de novo adjudication by giving an opportunity of being heard to the assessee and upon considering the evidence which the assessee may choose to file at the time of hearing of the case Addition being 15% of capital grant received by the assessee - HELD THAT - This issue is now in settled in favour of the assessee by the Hon ble High Court of Gujarat in assessee s own case for A.Y. 2010-11 2020 (3) TMI 232 - GUJARAT HIGH COURT we are in agreement with the concurrent finding of fact arrived at by the CIT(A) as well as the Tribunal as the assessee did not acquire any fixed assets on which depreciation has been claimed and therefore grants cannot be reduced from cost of fixed asset of the assessee. Therefore appeal stands dismissed. Correct head of income - treatment of interest income and miscellaneous income business income or income from other sources - HELD THAT - Respectfully following the Jurisdictional High Court judgment in 2020 (3) TMI 232 - GUJARAT HIGH COURT which has confirmed Tribunal s decision in assessee s own case we hereby held that the interest income and miscellaneous income earned by the assessee were directly related to the business of the assessee and assessable as business income only and not as income from other sources . Thus the Ground raised by the Revenue is hereby rejected. Disallowance u/s 14A r.w.r. 8D while determining the income under the provisions of MAT - HELD THAT - Ground raised by the Revenue to include the disallowance u/s. 14A for the purpose of computation of book profit u/s. 115JB of the Act is hereby deleted.
Issues Involved:
1. Disallowance under Section 14A of the Income Tax Act, 1961. 2. Guarantee Fees paid to the Government of Gujarat. 3. Disallowance of prior period expenses and income. 4. Deduction of dividend income while computing Book Profit under Section 115JB. 5. Initiation of penalty proceedings under Section 271(1)(c). 6. Charging of interest under Sections 234B, 234C, and 234D. Summary: 1. Disallowance under Section 14A: The Tribunal remanded the issue back to the Assessing Officer (AO) for fresh adjudication, directing the AO to recompute the disallowance under Section 14A as per Rule 8D, excluding interest on working capital borrowings. The Tribunal followed its earlier decision in the assessee's case for the Assessment Year 2009-10. 2. Guarantee Fees: The Tribunal upheld the CIT(A)'s direction to verify whether the guarantee fees paid to the Government of Gujarat were related to capital work-in-progress. The issue was remanded back to the AO for verification and adjudication, following the Tribunal's earlier decisions in the assessee's case. 3. Disallowance of Prior Period Expenses and Income: The Tribunal remanded the issue back to the AO for fresh adjudication, directing the AO to verify the facts and material as per the ratio laid down by the Hon'ble Gujarat High Court in the case of Adani Enterprises Ltd. The Tribunal followed its earlier decision in the case of Gujarat Energy Transmission Corp. Ltd. 4. Deduction of Dividend Income under Section 115JB: The Tribunal remanded the issue back to the AO for verification, directing the AO to allow the submission of the assessee if found in order. The Tribunal noted that the assessee had already included the dividend income in the computation of book profit. 5. Initiation of Penalty Proceedings under Section 271(1)(c): The Tribunal did not separately adjudicate this issue as it was consequential in nature and left it open. 6. Charging of Interest under Sections 234B, 234C, and 234D: The Tribunal did not separately adjudicate this issue as it was consequential in nature and left it open. Appeal by Revenue: The Tribunal partly allowed the Revenue's appeal for statistical purposes, remanding the issues of disallowance under Section 14A and guarantee fees back to the AO. The Tribunal dismissed the Revenue's grounds related to the addition of capital grants, treatment of interest income, and adjustment under Section 14A for computing book profit under Section 115JB, following the Jurisdictional High Court's judgment in the assessee's own case. Appeals for Assessment Year 2014-15: The Tribunal applied its decisions from the appeals for Assessment Year 2013-14 to the appeals for Assessment Year 2014-15, partly allowing both the assessee's and the Revenue's appeals for statistical purposes. Order Pronounced: The order was pronounced in the open court on 31-07-2023.
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