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TMI Blog2011 (9) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... - Held that:- The total dividend income received by the assessee was ₹ 4,00,410/- against which disallowance of ₹ 12,73,462/- by invoking the provisions of section14A of the Act is not warranted. - Decided in favor of assessee. Deduction u/s 80P - held that:- if the return of income is revised and deduction u/s 80P (2) (e) is recomputed, it ultimately effects other deductions as well. - The Assessing Officer has nowhere stated that the deduction was not allowable or wrongly claimed by the appellant. Not filing a revised computation cannot lead to denial of a genuine claim where the return was duly revised and claim duly recomputed. - Decided in favor of assessee. - ITA No.548/Chd/2011, ITA No.579/Chd/2011 - - - Dated:- 30-9-2011 - O R D E R PER SUSHMA CHOWLA, J.M, : The cross appeals filed by the Revenue and the assessee are against the order of the Commissioner of Income-tax(Appeals), dated 02.02.2011 relating to assessment year 2007-08 against the order passed under section 143(3) of the I.T. Act, 1961. 2. The Revenue has raised the following grounds: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as details of amounts on which tax has been deducted at source. The A.O. as well as CIT (A) erred in arriving at total amount of Rs.7321700/- by calculating rate of tax @ 1% as against details furnished along with the written submissions. The rate of tax of 1% has been calculated on mere assumption and estimate. Thus the principles of natural justice have been violated by the A.O. and Learned. CIT (A). 4. These cross appeals were heard together and are being disposed of by this consolidated order for the sake of convenience. ITA No. 579/Chd/2011 (assessee s appeal): 5. Ground No.1 raised by the assessee is not pressed by the learned A.R. for the assessee. It was pointed out by the learned A.R. for the assessee that as the issue raised vides ground No.1 has been decided by the Tribunal in assessee s own case and in view thereof the said ground is not pressed. 6. We find that the issue of disallowance of interest u/s 36(1)(iii) on interest free loan advanced to Sugarfed arose before the Tribunal in assessee s own case relating to assessment year 2006-07. The Tribunal in assessee s appeal being ITA No.802/CHD/2009 and Revenue s appeal being ITA No.875/CHD/2009, vide order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS payable relates to period from 01.04.2001 to 31.03.2004. 9. The CIT (Appeals) observed that I find that although it seems that the TDS payable relates to the period 1.4.2001 t 31.3.04, no details were furnished before the Assessing Officer . The contention of the assessee to furnish additional evidence was rejected and it was observed that the information was old and was available with the assessee, but no cogent reasons were given for not furnishing the same before the Assessing Officer. 10. The learned A.R. for the assessee placed reliance on the submissions before the CIT (Appeals) and pointed out that TDS of Rs.73,217/- was deducted out of payment of Rs.5,44,940/- and related to the period prior to 3 1.3.2004 and the provisions of section 40 (a)(ia) of the Act inserted w.e.f. 1.4.2005 were not applicable to such amounts. 11. The learned D.R. for the Revenue placed reliance on the order of the CIT (Appeals). 12. We have heard the rival contentions and perused the record. The assessee in its balance sheet had shown a sum of Rs.73,217/- as payable on account of TDS as on 3 1.3.2007. The plea of the assessee before the CIT (Appeals) was that as the aforesaid details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that the issue raised by the Revenue vide ground Nos.4 to 6 of appeal are identical to the issue raised in Revenue s appeal before the Tribunal relating to assessment year 2005-06. 16. The learned D.R. for the Revenue placed reliance on the order of the Assessing Officer. 17. The issue in ground No.4 is in connection with the deletion of interest on amount receivable from Punjab Government. The assessee had shown recovery of Rs.1,73,85,59,612/- from State Government. The Assessing Officer was of the view that the assessee was not doing any business with the Punjab State Government, instead had paid amount on behalf of the State Government, which was shown recoverable in form of ID Cess, Guarantee fee, paddy claim out of turn ration of paddy. The Assessing Officer observed that the assessee had diverted its funds to State Government interest free and at the same time was paying interest to various banks on loans raised by it. The Assessing Officer further observed that even the State Government charges costs/interest from the Markfed. Applying the ratio laid down by the Punjab Haryana High Court in Abhishek Industries Ltd. Vs. CIT [(286 ITR 1)(P H)], in the absen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount receivable from FCI. The AO during the course of assessment proceedings noted that guarantee fee, interest structure development, Cess and such other liabilities of FCI were borne by the assessee and the amount recoverable from FCI was also increasing. On the other hand, the assessee was paying interest by raising loans to run the business. The Assessing Officer disallowed the interest @ 7.25% on advance of 862.20 crores amounting to Rs.62.50 crores and added the same to the income of the assessee. The facts in the present case are identical to the facts relating to assessment year 2006-07 and following the order of the Tribunal (supra) in assessee s own case, the order of CIT (Appeals) is upheld. The CIT (Appeals) had decided the issue in line with the issue raised in relation to the amount due from State Government. Following the ratio laid down by the Tribunal as referred to by us in paras hereinabove, we are in agreement with the order of the CIT (Appeals) and dismiss the ground No.5 of appeal raised by the Revenue. 21. The issue in ground No.6 raised by the Revenue is against the deletion of addition of Rs.21,68,942/-. The Assessing Officer on perusal of the advertis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The CIT (Appeals) in view of the investments being old and not related to the period under consideration and following the ratio laid down by the Hon ble Punjab Haryana High Court in CIT Vs. Winsome Textiles India reported in 319 ITR 204 and CIT Vs. Hero Cycles Ltd. reported in 323 ITR 518 held that where there was no nexus between borrowed funds and investments made in purchase of shares, no disallowance u/s 14A was warranted . 24. The Revenue is in appeal; against the aforesaid order of the CIT (Appeals). 24. The learned D.R. for the Revenue placed reliance on the ratio laid down by the Hon ble Bombay High Court in Godrej Boyce Mfg. Co. Ltd. Vs. DCIT Another (328 ITR 81) (Bom)] and also placed reliance on the findings of the Assessing Officer. 26. The learned A.R. for the assessee pointed out that the onus is upon the Revenue to establish the nexus which the Revenue failed to do so in the present case. Reliance was placed on the ratio laid down in CIT Vs. Metalman Auto P. Ltd., 336 ITR 434 (P H)]. It was further pointed out by the learned A.R. for the assessee that the dividend income received by the assessee was Rs.4,00,410/- against which disallowance of Rs.12,73,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 912/-. Accordingly, the same was added to the total income of the assessee and was held that the claim of deduction u/s 80P(2)(e) of the Act would remain the same. It was further observed by the Assessing Officer that deduction can be raised through revised return and though the assessee revised its return of income, but did not revised its computation to the extent of excess claim of depreciation, hence addition of Rs.98,52,912/- was made to the income of the assessee. 29. Before the CIT (Appeals) the assessee claimed that it had credited Rs.45,14,49,575/- as storage income and depreciation on godowns relating to the storage income. As per the assessee storage income was separately computed in the computation chart and depreciation should have been reduced from the said income which was inadvertently omitted at the time of filing the return of income. The learned A.R. for the assessee further pointed out that the storage income would stand reduced by the amount of depreciation and it would not have any impact on the gross total income of the assessee , however, shall reduce the amount of deduction claimed u/s 80P(2)(e) of the Act by Rs.98,52,912/-. The assessee had furnished rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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