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TMI Blog2017 (10) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi Tribunal in ACIT Vs. Vireet Investment Pvt. Ltd.[2017 (6) TMI 1124 - ITAT DELHI] held that computation under Clause-(f) of Explanation-1 to section 115JB(2) of the Act is to be made without resorting to computation as contemplated u/s 14A r.w. Rule 8D of the Act. We may note that lower authority was not having the benefit of decision of Special Bench while passing the order impugned in the present appeal. Income from Oil Bonds to be taxed as Business Income - Held that:- Considering the decision of Co-ordinate Bench in assessee’s own case wherein the similar ground of appeal was restored to the file of CIT(A), hence, keeping in view, the principle of consistency, this ground of appeal is also restored to the file of ld. CIT(A) to decide it afresh, with similar directions. In the result, this ground of appeal is allowed for statistical purpose. Contribution to Rajiv Gandhi Institute of Petroleum Technology - Held that:- The contribution was made by assessee as per the directive of Ministry of Petroleum and Natural Gas. Rajiv Gandhi Institute of Petroleum Technology is an organization set up by Government of India for promoting quality and excellence in education and resea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case and in law and without prejudice to above, the learned CIT(A) erred in not holding that since the tax free investments are made by the assessee out of its own funds, no amount of the interest of ₹ 247,41,36,975 paid on borrowings qualifies for disallowance u/s 11A of the Income Tax Act, 1961. 5. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not admitting the additional grounds of appeal filed by assessee. The assessee submits that the learned CIT(A) ought to have admitted the additional grounds and adjudicated them on merits. 6. On the facts and in the circumstances of the case and in law, the appellant submits that the net loss on sale of oil bonds of ₹ 80,90,000/- is not a capital loss and the same is allowable as 'Business Loss' in computing the income of the assessee and allowed to carried forward under section 72 of Income Tax Act, 1961. 7. On the facts and in the circumstances of the case and in law, the assessee submits that in calculating the book profits u/s 115JB of the Income Tax Act 1961, no notional disallowance is permissible u/s 14A of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d land of ₹ 1,57,59,706. The Ld. A.R of the assessee argued that this ground of appeal is covered in favour of assessee by the decision of Tribunal in assessee own case for A.Y 2004-05 and 2005-06. 5. We have considered the submission of the Ld. A.R of the assessee and perused the order of Tribunal for A.Y 2004-05 in ITA no. 5963/um/2011. The coordinate bench of the Tribunal in identical ground of appeal has passed the following order:- 14. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material produced before us. We find that as stands gathered from the records, the revenue in the assessment framed in the hands of the assessee corporation for A.Y. 2014-15 had allowed the registration and stamp duty charges of ₹ 2,47,98,757/- as a revenue expenditure, as claimed by the assessee corporation in its revised return of income for A.Y. 2014-15, by relying on the judgment of the Hon ble High Court of Bombay in the case of CIT-3 Vs. Reliance Industrial Infrastructure Ltd. (2015) 379 ITR 0340 (Bom). The Hon ble High Court in its aforesaid judgment had held as under:- In fact during the hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered view that the leasehold premium amortized by the assessee corporation, being in the nature of rent, was therefore allowable as a revenue expenditure in the hands of the assessee. We are of the considered view that our aforesaid view stands fortified by an analogy that can safely be drawn from the judgment of the Hon ble Jurisdictional High Court in the case of Reliance Industrial Infrastructure Ltd. (supra), on the basis of which the claim of the assessee corporation towards registration and stamp duty charges of ₹ 2,47,98,757/-, as observed by us hereinabove, had been allowed as a revenue expenditure in the assessment framed in the case of the assessee corporation for A.Y. 2014-15. We are further of the considered view that the claim of the assessee corporation that the lease premium paid to the landlords in order to facilitate payment of nominal rent, can safely be characterized as a revenue expenditure in the light of the judgment of the Hon ble Supreme Court in the case of : Commissioner of Income Tax Vs. Madras Auto Service (P) Ltd. (1998) 233 ITR 468 (SC), wherein it was held as under:- 5. In order to decide whether this expenditure is revenue expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as Ground of appeal No. 5 in its appeal for A.Y. 2004-05. That in the backdrop of our observations and reasonings adopted while adjudicating the Ground of Appeal No. 5 raised by the assessee before us in its aforesaid appeal for A.Y. 2004- 05, viz. Bharat Petroleum Corporation Ltd. Vs. Additional CITRange- 2(1), Mumbai, marked as ITA 5963/Mum/2011, our decision passed in the context of the issue under consideration shall apply mutatis mutandis in the present appeal also. We thus going by our observations and reasonings adopted while disposing of the Ground of appeal no. 5 raised before us in assesses own appeal for A.Y. 2004-05, therein allow the Ground of appeal no. 1 raised by the assessee before us in the present appeal. Considering the order of Tribunal for AY 2004-05 2005-06 and following the principle of consistency, the ground no. 1 of appeal raised by assessee is allowed. 7. Ground no. 2 to 4, relates to disallowance u/s. 14A read with Rule 8D. The Ld. A.R of the assessee argued that these grounds of appeal are also covered in favour of assessee in assessee s own case for A.Y 2002-03 and 2003-04 and further in appeal for A.Y 2004-05 and 2005-06. On the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal ground of appeal holding that the assessee has not revised the return nor such claim was made before the AO during the assessment proceeding. It was argued that similar loss on Oil Bonds was allowed as business loss by the Tribunal in assessee s own appeal for AY 2004-05 2005-06. 11. Considering the contention of ld. AR of the assessee and the decision of Co-ordinate Bench in assessee s own case in ITA No. 5963 5966/M/2004-05 2005-06. We admit this ground of appeal and restored the matter to the file of CIT(A) to verify the fact and allow the claim in accordance with law and considering the decision of Tribunal in assessee s own case for AY 2004-05 2005-06. In the result, the ground no. 5 6 are allowed for statistical purpose. 12. Ground No. 7 relates to calculating the book profit under section 115JB and disallowance under section 14A. The ld. AR of the assessee argued that this ground of appeal is also covered in favour of assessee by the decision of Tribunal in case of Reliance Industrial Infrastructure Ltd. vs ACIT in ITA No. 69 70/M/2009 dated 05.04.2013. The ld. DR for the Revenue not disputed the contention of ld. AR of the assessee. 13. We have con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um Corporation Ltd. Vs. Additional CIT-Range-2(1), Mumbai , marked as ITA 5963/Mum/2011. We find that the identical issue raised by the assessee in the present appeal before us was also raised in its aforesaid appeal for A.Y. 2004-05, marked as ITA 5963/Mum/2011, wherein in the backdrop of the order of the ITAT passed in the case of Mangalore Refineries and Petro Chemicals Ltd.(Supra) Vs. DCIT (ITA No. 776/Mum/2004), which thereafter had been affirmed by the Hon ble High Court of Bombay in the case of Manglore Refineries and Petro Chemicals Ltd.(Supra) , we had restored the matter to the file of the CIT(A) for re-adjudication. We thus in the backdrop of our aforesaid observations and on the same reasoning, therefore in all fairness restore the matter to the file of the CIT(A), with a direction to readjudicate the same in the backdrop of the aforesaid judgment of the Hon ble High Court of Bombay in the case of Mangalore Refineries and Petro Chemicals Ltd.(supra). Needless to say, the CIT(A) during the course of readjudicating the aforesaid issue shall afford reasonable opportunity of being heard to the assessee. The additional ground of appeal raised by the assessee us is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive petroleum products are not capital assets consequently learned CIT (A) erred in confirming Assessing Officer's action of treating loss on sale of oil bonds as capital loss and not as business loss. 7. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming disallowance of prior period expenditure made by Assessing officer amounting to ₹ 4,32,53,288/- 8. On the facts and in the circumstances of the case and in law, the assessee submits that Interest income earned on Oil Bonds ought to be taxed as 'Profits and gains from Business and Profession' instead of 'Income from other sources'. 9. On the facts and circumstances of the case and in law the assessee submits that the contribution of ₹ 1,55,00,000/- to the Rajiv Gandhi Institute of Petroleum Technology made by the Corporation is allowable as deduction under section 37 of the Income Tax Act, 1961 and the learned CIT(A) erred in not allowing the same in entirety. 10. The Appellant craves leave to amend, alter and delete any of the above grounds and add any Additional ground(s) either before or at the time of hearing. 20. Ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. DR for the Revenue not disputed the contention of ld. AR of the assessee. We have considered the submission of both the parties and find that the Co-ordinate Bench of Tribunal in assessee s own case for AY 2002-03 have passed the following order: Ground No. 4. 10. This ground is against the disallowance of ₹ 5,33,97,234/- held to be prior period expenses. Similar issue was decided by coordinate bench in ITA No.1013/Mum/2001 and the operative para is reproduced below:- 2. Ground No.1 of the appeal is regarding disallowance of prior period expenses amounting to ₹ 34,51,324/-. 3. Learned Departmental Representative of the revenue supported the orders of authorities below. 4. It is submitted by ld. AR of the assessee that the amount of prior period expenses of ₹ 34.51 lakhs arises on account of various expenses for the reason that there was some mistake in making provisions in the relevant year and it constitutes only 0.03% of the turnover of the assessee, which is ₹ 1045.22 crores. It is submitted that under these facts, this issue is covered in favour of the assessee by the Tribunal judgment rendered in the case of Escorts L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowed for statistical purpose. 28. Ground No.9 relates to contribution to Rajiv Gandhi Institute of Petroleum Technology. The ld. AR of the assessee argued that the assessee contributed a sum of ₹ 1,55,00,000/- to Rajiv Gandhi Institute of Petroleum Technology. The contribution was made for promotion of efficient human resources and to meet the growing requirement of Petroleum and Energy sector. The contribution is allowable deduction under section 37 of the Act. On the other hand, the ld. DR for the Revenue supported the order of authority below. 29. We have considered the rival submission of the parties and perused the record of the case. Rajiv Gandhi Institute of Petroleum Technology was set up by the Government of India by enacting law with the object to promote research and development for benefit of Oil, Gas and Petrochemical Industry through integration of teaching and research. The Chairman and Managing Director of assessee-company is one of the ex-officio, member of General council of Institute. The assessee has claimed the contribution of ₹ 1,55,00,000/-. The Rajiv Gandhi Institute of Petroleum Technology is promoted by eminent Petroleum Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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