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TMI Blog2015 (9) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... /- 2. That the CIT(A) erred in upholding addition of Rs. 260.00 lacs and Rs. 75.53 lacs made u/s 41(1) of the Act in respect of payment to Builders and liability for vacation of squatters allowed in assessment year 2004-05 on accrual basis without appreciating that since the department is disputing allow ability of these liabilities on accrual basis in assessment year 2004-05 amounts cannot be included in the taxable income in this year u/s 41(1) of the I.T. Act. 3. That the CIT(A) erred in disallowing an amount of Rs. 11.79 lacs on account of administrative expenses u/s 14A of the Income Tax Act as against disallowance made by the appellant company of Rs. 2.00 lacs in its return of income. 4. That the CIT(A) erred in upholding addition on account of disallowance under section 14A read with Rule 8D of Rs. 9.79 lacs in determination of book profit for the purpose of section 115JB of the Income Tax Act. 5. That the CIT(A) erred in upholding the initiation of penalty proceedings u/s 271(1)(c) of the Act in the facts and circumstances of the appellant. 6. That the order passed by the AO and upheld by CIT(A) is bad in law. 7. That the Appellant Company craves leave to alter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1983/Del/09 for A.Y. 2005-06 dated 17.11.2009, a copy of which has been placed in the paper book on page nos. C-3 to C-10. In this order, reliance has been placed on the orders of the Tribunal for earlier years in the case of the assessee. Therefore, we think it fit to reproduce the paragraph from that order, which as discussed the issue in detail. In regard to ground no. 2 regarding interest of Rs. 67.20 lacs payable to MCD for nonpayment of flyover cost in time, the decision has been as under: "We have considered the rival submissions. In regard to the issue of disallowance of Rs. 12.21 crores being the expenses which had been disallowed by the AO as also the issue of disallowance of flyover cost of Rs. 13.50 crores and the issue of interest payable to MCD in respect of outstanding flyover cost, it is noticed that for the assessment year 1993-94 to 1996-97 the revenue has included the income on the sale of property rights on the entering into agreement with the buyers and the expenses on account of land and development incurred by the assessee has been allowed in proportion to the area sold but applying the matching principle. It is also noticed that in the later years, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is squarely covered by the decision of the Coordinate Bench of this Tribunal in the assessee's own case for the A.Y. 2003-04 referred to supra and consequently respectfully following the decision of the Coordinate Bench of this Tribunal in the assessee's own case for the A.Y. 2003-04, the findings of the ld. CIT(A) on this issue stand upheld." 10. The facts and circumstances of the issue being identical, we are also inclined to follow the orders Tribunal in the preceding assessment years in assessee's own case. 11. Accordingly ground no. 1 & 2 of Revenue is dismissed. 12. We now deal with the appeal filed by the Assessee in; ITA No. 4467/D/2012 13. It is submitted by the ld. AR that ground no. 1 & 2 of the assessee's appeal are incidental in nature to ground no. 1 & 2 of the Revenue's appeal. As we have dismissed the ground no. 1 & 2 of the Revenue's appeal, ground no. 1 & 2 of the assessee's appeal stand infructuous. 14. The only issue left for adjudication is addition in respect of Sec.14A disallowance. Both the Assessee as well as Revenue is in appeal (being ground no.3 ) before us on this issue. Facts germane to deal with this issue are as under: 15. On perusal of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration. Therefore, no disallowance on account of administrative expenses is warranted. In any case, it noticed that the appellant has offered a disallowance of Rs. 2 lacs over and above the interest expenses. 18. On the other hand, the ld. DR present supported the stand of the CIT (A) on the issue. The Ld. D.R. placed reliance on the decision of coordinate bench in the case of T&T Motors Ltd., in ITA no. 6490/Del/2010 for assessment year 2009-10. 19. We have verified the above submissions and perused the Statement of accounts submitted by the assessee in paper book. As per the computation the assessee has offered disallowance on account of interest amounting to Rs. 8.23 lacs and has further offered disallowance on account of administrative expenses to an extent of Rs. 2 lacs. Thus, the total disallowance u/s 14A as offered by the assessee amount to Rs. 10.23 lacs. 20. It is further observed that as per the scheme of restructuring and arrangement approved by the Hon'ble Delhi High Court, the assets and liabilities(including loans) were transferred to a new company and shares were allotted against the same(clause 3, 11 of the Schedule to the Accounts). In respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. 24. The Hon'ble Delhi High Court in the case of Joint Investment Pvt.Ltd., Vs. CIT, vide its order dated 25.02.2015, has held that disallowance u/s.14A cannot exceed the amount of exempt income. Ths Delhi High Court in the case of Holcim India Pvt.Ltd., reported in (2014) 272 CTR 282(Del), has held that there can be no disallowance u/s. 14A in the absence of any exempt income. The rationales behind these judgments are that, the amount of disallowance should not exceed the exempt income. 25. In view of the aforesaid discussion and on the basis of material and evidence on record, to meet the ends of justice, we find no perversity in the calculation of 14 A, disallowance by the assessee. This ground no.3 in the assessee's is allowed and that of Revenue is dismissed. 26. Ground no 4:This ground raised by the assessee is in respect of inclusion of the addition u/s.14A made by the ld. A.O in determining the book profits u/s115JB. As the addition made by the A.O u/s.14A stands deleated in view of the aforesaid reasoning, this ground no.4 of the assessee's appeal becomes consequential in nature. 27. Ground no.5: This ground is in respect of initiation of penalty proceedings u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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