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TMI Blog2014 (10) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... med by the assessee. 4. The ld CIT(A) has deleted the addition made by AO amounting to Rs. 1,72,82,880/- on account of disallowance of reduction of the claim of deduction u/s 8oIA of the IT Act on account of synchronization charges not reduced by assessee from profits of eligible units. 5. On the facts and circumstances of the case the ld CIT(A) has erred in deleting the addition of Rs. 8,40,000/- made by the AO being expenses paid out of undisclosed sources. 6. The ld CIT(A) has deleted the addition made by the AO amounting to Rs. 1,15,00,000/- in books profits on a/c of provision for FBT reduced by assessee from books profits without appreciating the facts that it is not permissible accordingly to explanation no.1 to section 115JB of the IT Act. 3. At the outset, the ld AR pointed out that the issues involved in ground No.2 to 4 and 6 of the Revenue's appeal are identical to the issues raised in the immediate preceding assessment year 2007-08. In the said year the coordinate bench vide order's dated 07.06.2010 and 22.09.2011 in ITA No.1487/Del/2010 & ITA No.706/Del/2010 respectively decided the issues as under:- 4. In respect to ground No.2 it was held as under:- We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's own case for all the earlier years i.e. 1994-95 to 2005-06 has decided the issue in favour of the assessee by following the decision of the Hon'ble Supreme Court in the case of Poddar Cement Ltd. 226 ITR 625 and Mysore Minerals Ltd. 239 ITR 775. 3.2 After hearing both the sides we find that the CIT.(A) has not committed any error in following the decisions of the ,ITAT in assessee's own case which themselves are based upon the binding precedent of the Apex Court, as cited supra. We decline to interfere." 6. In respect to ground No.4 it was held as under:- "5. Apropos ground No.1, it was submitted that ground No.1 has to be decided against the assessee and reference in this regard has been made to the ITAT orders dated 28th August, 2009 in ITA No.2104/DeI/2008 for Assessment Year 2005-06 vide para 6.4 and also order dated 13th November 2009 in ITA NO.807/DeI/2009 in respect of Assessment Year 2006-07 vide para No.S.4. The grounds relate to computation of deduction u/s 80lA after reduction of a sum of 1,72,82,880/- on account of synchronization charges. Copies of the aforementioned orders of the Tribunal are also filed along with the chart. For the sake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.6 it was held as under:- "12. After hearing both the parties, so as it relates to the amount of Rs. 21,55,44,187/-, we decide the issue against the assessee in view of aforementioned retrospective amendment in the provisions of Section 115JB. For the remaining amount of Rs. 1,17,68,617/-, we decide the issue in favour of the assessee respectfully following the aforementioned decision of coordinate Bench in the case of ITO vs. Vintage Distillers Ltd. (supra). It may be mentioned here that no contrary decision was brought to our notice. Therefore, ground No.4 is partly allowed in the manner aforesaid." 9. Ld DR relied on the orders of the AO and submitted that the appeals of the department against the order of the Tribunal are pending before the Hon'ble High Court. 10. We have heard both the parties and find that there is no change in facts and circumstances of the case as compared to the preceding assessment year 2007-08. Therefore respectfully following the order of the coordinate bench we reject the ground Nos. 2 to 4 & 6 raised by the Revenue. 11. Ground No.5 of the Revenue's appeal is related to addition of Rs. 8,40,000/- on account of alleged perks paid out of un-disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 15.06.2010. Thus, the retraction was made in the case immediately after receipt of copy of the statement. As already stated, the aforesaid perquisite can be taxed, if at all, in the hands of the employee and not in the hand of the employer company unless there is evidence that such perquisite has been paid out of unaccounted sources or not recorded in the books of account. No such evidence appears to have been found in the search against the appellant. In the circumstances the addition made cannot be legally sustained and is, therefore, deleted. Appellant gets relief of Rs. 8,40,000/-." 14. Having considered the rival submissions we find that there is no material with the Revenue to make the impugned addition. Since statement was retracted by Shri Mehendru on 18th June 2010, wherein Shri Mahendru had stated as under:- "I have been provided with a copy of the statement recorded during the course of search u/s 132 at the premises of M/s Bhushan Steel Limited on 03-03-2010. In this connection, I wish to submit as follows:- (1) I am an old man aged more than 70 years-and was in very tense frame of mind and shocked at the sudden turn of events on 03-03-2010 when a large number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Learned Assistant Commissioner of Income Tax, Central Circle-13, New Delhi in adding back a sum of Rs. 89,00,000/- under Section 14-A of the Income Tax Act, 1961 on account of expenditure incurred in relation to exempt income while computing income under the normal provisions of the Income Tax Act, 1961. 2. That the order dated 27-11-2012 passed u/s 250 of the Income Tax Act, 1961 by the Learned Commissioner of Income-Tax (Appeals) I, New Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Assistant Commissioner of Income Tax, Central Circle-13, New Delhi in making an adjustment of Rs. 89,00,000/- on account of expenditure on earning of exempt income to the Book Profit for the purpose of computation of MAT liability u/s 115JB of the Income Tax Act, 1961. 3. That the order dated 27-11-2012 passed u/s 250 of the Income Tax Act, 1961 by the Learned Commissioner of Income-Tax (Appeals) I, New Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Assistant Commissioner of Income Tax, Central Circle-13, New Delhi in as much as the Ld Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses (as calculated as per rule 80) have been incurred shall be reduced from that exempt income and there will be loss in exempt income head, where such loss (loss in exempt income head) cannot be claimed from non-exempt income. In this context, the decision of IT AT, Delhi in the case of ACIT vs Cheminvest Ltd 317 ITR 86 is relied upon. In the above mentioned case, the ITA T has observed that the disallowance U/S 14A can be made even if there is no exempt income generated from that investment." 5.3 The case laws relied upon by the AR relate to the law as it existed before introduction of Rule 80. The ITAT (Delhi) ruling in the case cited by the Assessing Officer is specifically in the context of instances were no exempt income is generated from the investments. In the present case, admittedly investments have been made that would yield incomes which will not part of total income of the appellant. If Rule 8D is to be applied, it cannot be applied in part. Accordingly, and following the ruling of Hon'ble ITAT (Delhi) in ACIT vs Cheminvest Ltd., this ground of appeal is dismissed." 21. In the instant case, it is an admitted position that assessee had made investments of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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