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TMI Blog2016 (6) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... f by this common order. ITA No.2128/PN/2014 (By Assessee) (A.Y. 2004-05) : ITA No.2094/PN/2014 (By Revenue) (A.Y. 2004-05) : 2. Ground of appeal Nos. 1.1 and 1.2 by the assessee and Ground of appeal Nos. 2(a) and 2(b) by the Revenue read as under : Grounds by Assessee : "1.1 The Ld.CIT(A) erred in confirming the disallowance u/s.14A of the Act to the extent of 2.5% of the exempt income. 1.2 In the facts and circumstances of the present case, the Ld.CIT(A) should have appreciated that disallowance u/s.14A of the Act should be restricted to Rs. 50,000/- as confirmed by the Revenue authorities for the preceding as well as subsequent years upto A.Y. 2007-08." Grounds by Revenue : "2(a) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in restricting the AO's disallowance u/s.14A of the Act to Rs. 50,000/- by relying on the Hon'ble ITAT's decision in assessee's own case for A.Y. 2008-09 2(b) Whether the Ld.CIT(A) was further justified in considering that disallowance of Rs. 50,000/- u/s.14A as offered by assessee was reasonable when the AO had rightly disallowed the amount of Rs. 23,40,344/- u/s.14A after estimating 10% of exempt income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,85,084/-. Accordingly, the appellant relief of Rs. 17,55,250/- (23,40,334/- - 5,85,084) while disallowance of Rs. 5,85,084/- is upheld. Thus, the ground is partly allowed." 5. Aggrieved with such order of the CIT(A) the Assessee as well as the Revenue are in appeal before us. 6. The Ld. Counsel for the assessee referring to the order of the Tribunal in assessee's own case for A.Y. 2008-09 vide ITA Nos. 1676 and 1709/PN/2012 order dated 30-06-2014 drew the attention of the Bench to Para 48 of the Tribunal's order and submitted that the Tribunal has restricted such disallowance to Rs. 57,600/- which includes Demat charges of Rs. 7,600/-. Thus, in effect Rs. 50,000/- has been disallowed. Referring to pages 71 to 81 of the paper book the Ld. Counsel for the assessee drew the attention of the Bench to the order of the Tribunal in assessee's own case for A.Y. 2009-10 and 2010-11 vide ITA Nos. 560 and 561/PN/2014 and ITA Nos. 578 and 579/PN/2014 and submitted that the Tribunal for A.Y. 2009-10 has sustained the amount of Rs. 76,951/- which includes Demat charges of Rs. 26,951/-. Similarly, for A.Y. 2010-11 the Tribunal at Para 30 of the order followed the order for A.Y. 2009-10 and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal No. 1(a) and 1(b) by the Revenue reads as under : "1(a) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in disregarding the judgment of Hon'ble Supreme Court given in the case of Southern Technologies Ltd. Vs. JCIT 320 ITR 577 (SC) which says that provisions of RBI Act cannot override the provision of Sec.145 of the Income Tax Act, since both the Acts operate in different fields and therefore assessee cannot recognize interest income on NPA and yet not offer it in profit and loss account. 1(b) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was justified in not considering the fact that the special provisions of section 43D are applicable only to Financial Institutions and Co-op. Banks whereas the assessee falls under the category of Domestic Company." 10. Facts of the case, in brief, are that the assessee is a Non- Banking Finance company engaged in the business of Auto Finance, Leasing of two wheelers and some durables and also granting assets on lease. In the order passed u/s.143(3) on 31-10- 2006 the AO had made addition of Rs. 1,76,99,057/- being interest on Non Performing Assets (in short 'NPA') w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogies Ltd. (supra) and also allowing the assessee to demonstrate the justification and criterion for identification of NPAs and non-accrual of income on such advances. Subsequently, when similar issue came up before the Tribunal is assessee's case for assessment years 2004-05 to 2006-07, the Tribunal by way of a common order dated 31.08.2012 (supra) again restored the matter back to the file of the Assessing Officer not only in terms of the decision of the Tribunal dated 31.03.2010 (supra) but also requiring the Assessing Officer to take into consideration "such other legal position as prevailing at the time of ensuing remand proceedings". The aforesaid direction was in the context of the judgements of the (i) Hon'ble Delhi High Court in the case of M/s Vasisth Chay Vyapar Ltd. (supra) and Brahamputra Capital Financial Services Ltd. (supra); and, (ii) decision of the Pune Bench of the Tribunal in the case of Alfa Laval Financial Services Ltd. (supra), which was cited before the Tribunal. The aforesaid precedents were not available when the Tribunal considered the issue on the earlier occasion vide order dated 31.10.2010 (supra). 28. In the course of the impugned appellate proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 561/PN/2014 and ITA Nos. 578 and 579/PN/2014 order dated 11-04-2016 for A.Yrs. 2009-10 and 2010-11 has decided the issue in favour of the assessee, copies of which are placed in the paper book. 16. Since the facts of the impugned assessment year are identical to the facts decided by the Tribunal in the subsequent assessment years, therefore, respectfully following the order of the Tribunal and in absence of any contrary material brought to our notice, we uphold the order of the CIT(A) on this issue. The ground raised by the Revenue is accordingly dismissed. ITA No.2095/PN/2014 (By Revenue) (A.Y. 2005-06) : 17. Grounds of appeal No. 1(a) and 1(b) by the Revenue read as under: "1(a) Whether on the facts and circumstances of the case and in law, the CIT(A) was correct in disregarding the judgment of Hon'ble Supreme Court given in the case of Southern Technologies Ltd. Vs. JCIT 320 ITR 577 (SC) which says that provisions of RBI Act cannot override the provision of Sec.145 of the Income Tax Act, since both the Acts operate in different fields and therefore assessee cannot recognize interest income on NPA and yet not offer it in profit and loss account. 1(b) Whether on the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rightly disallowed the amount of Rs. 3,11,028/- u/ s 14A after applying rule 8D in his assessment order and also in not appreciating that the A.O. had rightly observed that the assessee company was incurring substantial amount of expenditure on persons involved in investment portfolio and that the assessee company was not maintaining any record through which such expenditure could be identified." 22. After hearing both the sides, we find the above grounds are identical to grounds of appeal No.2(a) and 2(b) in ITA No.2094/PN/2014 for A.Y. 2004-05 filed by the Revenue. We have already decided the issue and the grounds raised by the Revenue have been dismissed. Following the same reasonings, the above grounds by the Revenue are dismissed. 23. Grounds of appeal No.2(a) and 2(b) by the Revenue read as under : "2(a) Whether on the facts and the circumstances of the case and in law, the CIT(A) was correct in disregarding the judgment of Hon'ble Supreme Court given in the case of Southern Technologies Ltd Vs JCIT 320 ITR 577(SC) which says that provisions of RBI Act cannot override the provision of Sec. 145 of the Income Tax Act, since both the Acts operate in different fields and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same has been deposited before the due date of filing of the return u/s.139(1) of the I.T. Act. Since the assessee in the instant case has admittedly deposited the Employees' contribution to PF before the due date of filing of the return u/s.139(1) of the I.T. Act, therefore, we do not find any infirmity in the order of the CIT(A) deleting the addition made by the AO. Accordingly, the same is upheld and the ground raised by the Revenue is dismissed. CO No.22/PN/2016 (By Assessee) (A.Y. 2011-12) 28. Grounds of appeal No.1 and 2 by the assessee in the Cross Objection read as under : "1. CLAIM FOR DEDUCTION IN REESPECT OF EMPLOYEE STOCK OPTIONS ('ESOP') EXPENDITURE The Respondent submits that the deduction in respect of ESOP of Rs. 2,60,65,287/- ought to be allowed as a deduction u/s.37(1) of the Act. 2. ADDITIONAL CLAIM FOR DISCOUNT ON ISSUE OF ESOP u/s.37(1) OF THE ACT BASED ON EXERCISE OF OPTIONS OF Rs. 2,29,063/-. The Respondent submits that the incremental expenditure of Rs. 2,29,063/- in respect of the excess amount charged in the hands of employees as perquisite on exercise of stock options during A.Y. 2011- 12 (Rs.3,55,687/-) as compared to the fair value of discou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal for claiming ESOP expenditure as a tax deductible expense. 33. On the other hand ld. DR submitted that the assessee raised this issue first time before the Tribunal. The ld. DR submitted that the expenditure was never claimed by the assessee. Therefore, the same is not allowable. 34. Both sides heard. It is an admitted fact that the assessee has claimed ESOP expenditure for the first time before the Tribunal. The Hon'ble Supreme Court of India in the case of Goetze (India) Ltd. Vs. CIT has held that the powers of the Appellate Tribunal are not impinged to accept the claim of assessee which has not been made before the Assessing Officer. We deem it appropriate to remit this issue back to the file of Assessing Officer to consider the claim of the assessee in the light of decision of Special Bench of the Bangalore Tribunal in the case of Biocon Limited (supra). The assessee shall file fresh computation of income before the Assessing Officer. The Assessing Officer shall consider the same and decide the claim of assessee in accordance with law. Accordingly, this ground of appeal of the assessee is allowed for the statistical purpose." 32. Since the facts of the impugned as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -10. We have remitted 34 ITA Nos. 560, 561, 578 & 579/PN/2014, A.Ys. 2009-10 & 2010-11 this issue back to the file of Assessing Officer for fresh adjudication in the light of the judgment of Hon'ble Bombay High Court in the case of Commissioner of Income Tax Vs. M/s. Lord Krishna Bank Ltd. (supra). Accordingly, in assessment year 2010-11 also we remit his issue back to the file of Assessing Officer to decide this issue afresh in similar terms. In the result, the appeal of the assessee is partly allowed." 37. Since the facts of the impugned assessment year are identical to the facts in the case for A.Y. 2010-11, therefore, following the order of the Tribunal in assessee's own case in the immediately preceding assessment year, we restore the issue to the file of the AO with a direction to adjudicate the issue in the light of the direction of the Tribunal in A.Y. 2010-11. The ground raised by the assessee in the Cross Objection is accordingly allowed for statistical purposes. 38. In the result, ITA No.2128/PN/2014 filed by the assessee is partly allowed, ITA Nos. 2094 to 2097/PN/2014 filed by the revenue are dismissed and the Cross Objection No.22/PN/2016 filed by the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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