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TMI Blog2013 (9) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. - ITA No.1503,1624/Mds/2012 - - - Dated:- 17-7-2013 - Dr. O. K. Narayanan And Vikas Awasthy , JJ. For the Appellant: Shri S Jayaraman, CIT For the Respondent : Shri A K Gupta, FCA ORDER:- PER : Vikas Awasthy The appeals have been filed by the assessee as well as the Revenue against the order of the Commissioner of Income Tax(Appeals)-III, Chennai dated 11-05-2012 relevant to the Assessment Year (AY) 2008-09. 2. The brief facts of the case are; the assessee is a Public Limited Company and is engaged in the business of luxury hotels. The assessee filed its return of income for the AY. 2008-09 on 26-09-2008 declaring its income as NIL. The Book profits u/s. 115JB of the Income Tax Act, 1961 (herein after referred to as the Act ) were computed at ₹ 24,43,51,173/- and the assessee paid tax under the provisions of Minimum Alternate Tax (MAT). The case of the assessee was selected for scrutiny and notice u/s. 143(2) of the Act was issued to the assessee on 12-08-2009. During the course of assessment proceedings, the Assessing Officer made certain dis-allowances/additions in the income returned by the assessee. Aggrieved a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Revenue in its appeal No. 1624/Mds/2012 are as under: 1. The order of the learned Commissioner of Income Tax(Appeals) is contrary to the Law and facts of the case. 2. The ld. CIT(Appeals) erred in deleting the disallowance made u/s. 40a(i) on other payments amounting to ₹ 12.29 lakhs. 2.1 The ld. CIT(Appeals) ought to have appreciated the fact that the assessee did not produced any evidence that reimbursement in quantum are equal to actual expenditure incurred; 2.2 The ld. CIT(Appeals) ought to have appreciated the fact that the assessee did not make any submissions at the time of scrutiny proceedings as well as at the time of remand proceedings; 3. The ld. CIT(Appeals) has erred in restricting the disallowance made u/s. 14A from ₹ 4.32 crores to ₹ 34.20 lakhs. 3.1 The CIT(Appeals) ought to have seen that the additions were made on the basis of fresh investments of ₹ 9.44 crores made during the year alleged out of interest bearing funds. 3.2 The CIT(Appeals) ought to have appreciated that examination of bank statements filed during the remand proceedings showed that there had been transfer of funds to account No. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .w.r. 8D and addition of dis-allowance u/s. 14A while calculating book profits under the provisions of Section 115JB have been assailed by both the sides. 4. Shri A.K. Gupta, appearing on behalf of the assessee submitted that the CIT(Appeals) has wrongly sustained addition to the tune of ₹ 34.20 Lakhs u/s. 14A r.w.r. 8D of the Act. The assessee has not received any dividend during the relevant AY. The assessee has investments to the tune of ₹ 64 Crores. In the relevant period the assessee has made investments of ₹ 9.4 Crores. The entire investments have been made by the assessee either in subsidiary or associated companies. The investments have been made in the companies not for the purpose of earning dividend but out of business expediency. The assessee is not into the business of investments. The ld. AR further submitted that the investments were not made from borrowed funds bearing interest. The assessee had sufficient own funds to make such investments. Therefore, the provisions of Section 14A are not attracted. The ld. AR further contended that the CIT(Appeals) has erred in holding that ₹ 34.20 Lakhs computed under deeming provision of Section 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first issue in the appeal of the assessee relates to dis-allowance made u/s. 14A r.w.r. 8D. The Assessing Officer has made dis-allowance to the tune of ₹ 4,32,66,500/-. The contention of the assessee is that the assessee has earned dividend income of ₹ 4.6 Lakhs which is fully exempt u/s. 10(34) of the Act. The assessee has made voluntarily dis-allowance of ₹ 45,927/- u/s. 14A. The assessee has made fresh investments to the tune of ₹ 9.4 Crores during the year. The Assessing Officer held that the investments have been made from the fresh secured loans obtained during the year by the assessee. The CIT(Appeals) after going through the submissions made by the parties has come to the conclusion that the assessee has made investments from its own funds except for the short term investments made in HDFC Cash Management Fund and DSPML Cash Plus Fund in respect of which the amounts were invested from interest bearing funds borrowed from HBSC. The Revenue has not been able to controvert the findings of CIT(Appeals). We are of the considered opinion that the investments made by the assessee in the subsidiary company are not on account of investment for earning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT Vs. K.Y. Pillaiah Sons reported as 63 ITR 411 (SC), we need not repeat the reason given by CIT(Appeals). No interference is called for in the findings of the CIT(Appeals) with regard to inclusion of the amount dis-allowed u/s. 14A r.w.r. 8D while computing book profit u/s. 115JB. Accordingly, this ground of appeal of the assessee as well as that of the Revenue is dismissed. 9. The fourth ground of appeal of the assessee is against remitting the following issues back to the Assessing Officer for further verification: i) MAT credit entitlement available u/s. 115JAA; ii) Claim towards carry forward of un-absorbed loan/depreciation; iii) Claim towards tax credit available and against TDS/TCS certificates. We find that complete facts regarding all these issues could not be culled out from the submissions or the documents available before the CIT(Appeals). The CIT(Appeals) has remitted the issues back to Assessing Officer to verify the claim of the assessee and allow the same in accordance with law. We do not find any error in the findings of the CIT(Appeals). The CIT(Appeals) has merely remitted these issues back to the Assessing Officer to verify th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Pg.No. 124 to 146 of the Paper Book. Relevant extract of the circular is re-produced herein below: Whether expenditure incurred by the employer for the purposes of providing free or subsidized transport for journeys to employees from their residence to the place of work or such place of work to the place of residence would attract FBT? 104. The free or subsidized transport provided to employees for journeys from their residence to the place of work or such place of work to the place of residence is in lieu of conveyance/transportation allowance, which is not liable to FBT. Accordingly, the expenditure incurred by the employer for the purposes of providing free or subsidized transport for journeys to employees from their residence to the place of work or such place of work to the place of residence will not be liable to FBT . The AR in support of his contentions has further relied on the order of the Tribunal in the cases of ITO Vs. Vintage Distillers Ltd. (supra) and ASB International (P) Ltd. Vs. Dy.CIT (supra) wherein, similar view has been taken. The DR has not been able to controvert the submissions made by the assessee on the issue. We find force in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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