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TMI Blog2017 (5) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 Rs. 10. 26 crores ITA/3998/Mum/2010 (AY 2000-01):- 2. First Ground of appeal, raised by the assessee is about development expenditure of Rs. 12. 22 crores. It was brought to our notice that while deciding the appeal for the AY. 1999-2000 the matter was restored back to the file of the AO by the Tribunal (ITA/2344/Mum/2009- para-6 at Pg-10 dt. 24/07/2015 ), that similar directions were given by the Tribunal for the AY 2006-07 also (ITA/8597/Mum/2010, Dt. 06/06/2012). Respectfully following the above we are restoring back the issue to the file of the AO and follow the direction of the Tribunal given for the AY 2006-07. First Ground stands partly allowed. 3. Second Ground is about technical services fee paid to various parties, amounting to Rs. 28. 98 crores The representatives of both the sides stated that while deciding the appeal for AY. s 2006-07 and 2007-08 (ITA/8597/Mum/2010, (supra) para 3-4 at pages-12-23 and ITA/7999/ Mum/2011, 08th June 2012, Pg-8)the Tribunal had held that expenditure was capital in nature and the assessee was entitled to depreciation. Following the above orders of the Tribunal we hold that the expenditure was of capital nature and the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rores. The AR fairly conceded that issue stands covered against the assessee by the Special Bench decision in the case of Avadh Trading (100ITD131). Respectfully following the above order of the Special Bench seventh ground is decided against the assessee. 10. Next Ground is about disallowance made u/s. 14A of the Act amounting to Rs. 21. 87 crores. During the assessment proceedings the AO had disallowed Rs. 7. 72 crores while computing the disallowance under the said section. In the appellate proceedings the First Appellate Authority (FAA) invoked the provisions of Rule 8D of the Income tax Rule, 1962 (Rules)and directed AO to enhance the disallowance by applying the decision of Daga Capital. 10. 1. Before us, the AR argued that Rule 8D was not applicable for the year under consideration in view of the judgment of Hon'ble Bombay High Court delivered in the case of Godrej and Boyce Mfg. Co. Ltd. (328ITR81), that enhancement made by FAA should be disallowed, that in the subsequent years the matter was sent back to the AO, that the investment in subsidiaries, being strategic investment should be excluded from investments. He relied upon the cases of JM Financial Ltd. (ITA/4521/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue against the AO. Respectfully following the above, we decide the issue against the AO. 17. Next Ground deals with remission of liability on prepayment of trade advances of Rs. 4. 54 crores in respect of capital assets. It was brought to our notice that the Tribunal while deciding the appeal for AY 1999-2000 (ITA 3070/Mum/2009- para 14 - 14. 3 pg14-17) has dismissed the said ground . Respectfully following above we dismiss Ground No. 7. 18. Ground No. 8 is in respect of liability on account of special pension of Rs. 2. 93 crores. Both the representatives agreed that identical issue was decided against the AO by the Tribunal, (at para -16 of pg-18-19 , ITA/3070/Mum/2009) while deciding the appeal for 1999- 2000. Following the same Ground No. 8 is decided as against the AO. ITA/7846/Mum/2011-AY. 01-02: 19. First ground of appeal, raised by the assessee, was not pressed before us in view of the smallness of tax effect. Hence, same stands dismissed as not pressed. 20. Next ground is about development expenditure of Rs. 17. 93 crores and staff cost of Rs. 3. 49 crores. Following our order for the earlier year, we restore back the matter to the file of the AO. 21. Development e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as of capital nature and was entitled for depreciation at the rate of 25%. The FAA, during the appellate proceedings, held that expenditure on acquiring software was a capital expenditure, that the assessee could not have differing treatment for its books of accounts and for tax computation. 25. 1. During the course of hearing before us, the AR argued that the payments made by the assessee were pure consultancy charges for business-related advice, that it did not result in acquisition of any IPR or tangible asset, that same were revenue in nature, that in the case of Shreyas Shipping expenditure on drydock repairs and survey expenses were held allowable over 2. 5 years in the manner accounted by the assessee, that in the case of Taparia Tools Ltd. (372 ITR 605) the honorable Supreme Court had rejected the spread over theory and held expenditure allowable in the year of immigrants, that the accounting entries could not determine ambit of taxable income. The DR relied upon the order of the FAA. 25. 2. We have heard the rival submissions. We find that the assessee had made payment in connection with transport solution group for consultancy. The AO has not brought on record anything ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made for MAT purposes. Disallowance under section 14A is not part of the section 115 JB. We allow the ground raised by the assessee. ITA/4524/Mum/2010-AY. 2001-02: 33. Grounds of appeal No. s 2, 3 and 4 deal with payment to clubs, provision for reliability arising out of labour demands under negotiation and admission of liability on prepayment of trade advances of Rs. 35. 80 lakhs, Rs. 6. 46 crores and Rs. 3. 97 crores respectively. Identical issues have been decided by us in the earlier year(GOA-2, 6 and7). Following earlier year's order, we decide all the 3 grounds against the AO. 34. Last ground of appeal is about depreciation on item sold as slum sale during the AY. s 1995-96 and 1996-97. It is were purely consequential claim following the orders of the Tribunal for the above-mentioned two AY. We find that to give consequential effect to the order of the Tribunal, the FAA directed the AO to exclude the sale proceeds of assets from block of assets while calculating depreciation. We are of the opinion that there is no need to disturb the finding given by the FAA. GOA-5A stands dismissed. As a result, appeals filed by the assessee for both the AY. s. stand partly allowed. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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