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TMI Blog2018 (8) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 2,33,55,558/made u/s 145A of the Act? Whether the Appellate Tribunal was right in law and on facts in confirming the decision of the CIT(A) in deleting the addition u/s 145A of the Act, 1961? as disallowed by the AO? - R/TAX APPEAL NO. 808 of 2018 With R/TAX APPEAL NO. 809 of 2018 With R/TAX APPEAL NO. 810 of 2018 With R/TAX APPEAL NO. 811 of 2018 With R/TAX APPEAL NO. 250 of 2018 With R/TAX APPEAL NO. 251 of 2018 With R/TAX APPEAL NO. 252 of 2018 - - - Dated:- 16-7-2018 - MR. M.R. SHAH AND MR. A.Y. KOGJE, JJ. With R/TAX APPEAL NO. 646 of 2018 And R/TAX APPEAL NO. 647 of 2018 16-07-2018 For The Petitioner : Mr Manish Bhatt, SR. Advocate for Mrs Mauna M Bhatt(174) COMMON ORAL ORDER ( PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] As common question of law and facts arise in this group of Tax Appeals and as such with respect to the same assessee but different assessment years and as such arise out of the impugned common order passed by the learned Income Tax Appellate Tribunal, Ahmedabad (hereinafter referred to as Tribunal ), all these Tax Appeals are heard together and present common order is passed. [2.0] Feeling aggrieved and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 passed by the learned Tribunal in ITA No.2921/Ahd/2012 for AY 200910, the Revenue has preferred the Tax Appeal No.811/2018 with the following proposed questions of law. [ A] Whether the Income Tax Appellate Tribunal has substantially erred in law and on facts in deleting the addition of ₹ 2,31,36,464/made u/s. 145A of the Income Tax Act, 1961? [ B] Whether the Income Tax Appellate Tribunal has substantially erred in law and on facts in deleting the the disallowance of excess payment on Director s remuneration of ₹ 4,31,56,827/u/ s 40A(2)(b) of the Income Tax Act, 1961? [2.4] Feeling aggrieved and dissatisfied with the impugned common order dated 14.09.2017 passed by the learned Tribunal in ITA No.707/Ahd/2015 for AY 201011, the Revenue has preferred the Tax Appeal No.250/2018 with the following proposed questions of law. [ A] Whether the Appellate Tribunal has erred in law and on facts in deleting the disallowance made u/s. 14A r.w. Rule 8D? [ B] Whether the Appellate Tribunal has erred in law and on facts in deleting the disallowance of ₹ 1,26,09,556/made on account of Directors remuneration u/s 40A(2)(b) of the Act? [2.5] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the impugned order dated 15.01.2018 passed by the learned Tribunal in ITA No.3340/Ahd/2015 for AY 201213, the Revenue has preferred the Tax Appeal No.647/2018 with the following proposed questions of law. [ A] Whether the Appellate Tribunal was right in law and on facts in deleting the disallowance u/s. 40A(2)(b) of the Act, 1961 as disallowed by the AO? [ B] Whether the Appellate Tribunal was right in law and on facts in confirming the decision of the CIT(A) in deleting the addition u/s 145A of the Act, 1961? as disallowed by the AO? [3.0] At the outset it is required to be noted that in most of the appeals the proposed question viz. deleting the disallowance under Section 40A(2)(b) on account of excess remuneration to the Directors; deleting the disallowance under Section 14A deleting the addition under Section 148A of the Income Tax Act, 1961 (hereinafter referred to as IT Act ) with respect to the unutilized CENVAT credit would be common. [4.0] For the sake of convenience the facts in Tax Appeal No.808/2018 arising out of the ITA No.857/Ahd/2012 for AY 200809 are narrated which in nutshell are as under: [4.1] That the assessee filed the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of the aforesaid amount under Section 14A of the IT Act. During the course of the assessment proceedings and from the statement of computation of income the Assessing Officer noticed that the assessee has declared short term capital gain of ₹ 1,61,40,648/and long term capital gain of ₹ 82,15,286/. The Assessing Officer noticed that the assessee has continuously been trading in shares in past years also. On analysis of the transaction of purchase and sale of shares traded by the assessee, the Assessing Officer was of the opinion that nature of the profit earned by the assessee on sale and purchase of shares was not capital gain but it was business profit earned by the assessee in trading activities of shares carried out by the assessee and therefore, the sum shown by the assessee under the head capital gain be treated as incme chargeable under the head profits and gains of business from business or profession . [4.3] It appears that during the course of assessment proceedings the assessee was requested to explain whether at the time of valuing the closing stock, the amount of tax paid or incurred by the assessee to bring the goods to the place of its location ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the appeal being ITA No.1213/Ahd/2012 for the AY 200809. That by impugned common order the learned Tribunal has allowed the appeal preferred by the assessee being ITA No.857/2012 and has dismissed the appeal preferred by the Revenue and has deleted the disallowance under Section 40A(2) (b) made by the Assessing Officer on account of excess remuneration to Directors of ₹ 3,21,96,765/and also directed to delete the disallowance under Section 14A of ₹ 14,57,995/out of the total disallowance of ₹ 31,17,765/and also observed and held that the assessee s profit earned on sale of shares shall be treated as capital gain instead of business income. [4.8] Feeling aggrieved and dissatisfied with the impugned order passed by the learned Tribunal deleting the impugned order passed by the learned Tribunal deleting the disallowances under Section 40A(2)(b) of the IT Act on account of excess remuneration to the Directors; deleting the disallowance under Section 14A read with Rule 8D and holding that the assessee s profit earned on the sale of shares shall be treated as capital gain instead of business income, the Revenue has preferred the Tax Appeal Nos.808/2018 and 809/2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2921/2012 811/2018 200910 1. 145A CENVAT 2. 40A(2)(b) 5. 707/2015 250/2018 201011 1. Disallowance u/s.14A r.w. Rule 8D 2. Disallowance u/s.40A(2) (b) 6. 953/2015 251/2018 200910 1. 40A(2)(b) 2. 145A unutilized CENVAT 7. 708/2015 252/2018 201112 1. 14A r.w. Rule 8D 2. 40A(2)(b) 8. 974/2015 253/2018 201112 1. 40A(2)(b) 2. 145A CENVAT 9. 3158/2015 646/2018 201213 1. Disallowance u/s.14A 2. Disallowance u/s.40A(2) (b) 10. 3340/2015 647/2018 201213 1. Disallowance u/s.40A(2) (b) 2. Addition u/s.145A [5.2] Now, so far as the impugned order passed by the learned Tribunal deleting the disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of sec. 14A r.w. Rule 8D of the IT Act. I have also perused various case laws cited by the appellant but the ratio of these case laws will not apply in the year under consideration since provisions of Rule 8D are applicable for the AY 200809. Since the A.O. Had scrupulously followed provisions of rule 8D accordingly, I do not have any hesitation in agreeing with the contentions of the ld. A.O. In view of above, disallowance of ₹ 31,17,765/made by the A.O. u/s.14A of the I.T. Act is confirmed. This ground of appeal is dismissed Heard both sides. Relevant records perused. There is no dispute about the fact that the above stated direct expenditure already stands accepted. Ld. Authorized representative draws our attention to assessee s P L account demonstrating assessee s interest income in the impugned assessment year as ₹ 2,59,32,546/with interest expenditure of ₹ 9,33,696/resulting in net positive figure. A coordinate bench of the Tribunal in ITA 1277/Kol/2011 DCIT vs. Trade Apartment Ltd. decided on 30032012 holds that such an interest disallowance is not to be made in absence of any net interest expenditure upon setting off interest credited to P L acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ADMITTED to consider the following substantial question of law Whether the Appellate Tribunal is right in law and on facts in holding that the assessee s profit earned on the sale fo shares shall be treated as capital gain instead of business income? 2. Tax Appeal No.809/2018 is DISMISSED so far as proposed question No.[A] is concerned. However, the Tax Appeal No.809/2018 is ADMITTED to consider the following substantial question of law. Whether the Income Tax Appellate Tribunal has substantially erred in deleting the addition made u/s 145A of the Income Tax Act, 1961? 3. Tax Appeal No.810/2018 is DISMISSED for the reasons stated above. 4. Tax Appeal No.811/2018 is DISMISSED so far as proposed question No.[B] is concerned and is ADMITTED to consider the following substantial question of law. Whether the Income Tax Appellate Tribunal has substantially erred in law and on facts in deleting the addition of ₹ 2,31,36,464/made u/s. 145A of the Income Tax Act, 1961? 5. Tax Appeal No.250/2018 is DISMISSED for the reasons stated above. 6. Tax Appeal No.251/2018 is DISMISSED qua proposed question No.[A] and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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