9911796707
TMI Blog2018 (9) TMI 1743X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Income Tax Act, 1961 (the Act). The Revenue has also filed appeal for AY 2010-11 against the order of the CIT(A)-VI, Ahmedabad dated 13.08.2014 arising in the assessment order dated 30.03.2013 passed by the AO under s.143(3) of the Act. As some of issues are stated to be common, all the appeals as captioned have been heard together for adjudication thereof. 2. We shall first take up the appeal of the Revenue and Cross Objection of the assessee thereon concerning AY 2009-10 for adjudication purposes. ITA No. 1623/Ahd/2013-AY 2009-10-Revenue's appeal 3. The grounds of appeal raised by the Revenue in the captioned appeal concerning AY 2009-10 reads as under:- "1. The CIT(A) has erred in law and on facts in deleting the disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 145A of the Act as well as perused the orders of the lower authorities. While it is the case of the AO that the element of excise duty / CENVAT etc. would represent part of the closing stock of the assessee in terms of Section 145A of the Act, it is the case of the assessee, on the other hand, that Section 145A of the Act has no application to the facts of the case. It is further case of the assessee that it follows exclusive method of accounting for valuation of inventory and therefore, entire exercise would be tax neutral. We notice that Section 145A falls under the Chapter XIV - procedure for assessment. It essentially deals with method of accounting and is in the nature of machinery provision. Section 145A inter alia provides that inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee against the aforesaid action of proportionate disallowance of interest of the AO and deleted such disallowance. 12. Aggrieved, the Revenue preferred appeal before the Tribunal. 13. We have carefully considered the rival submissions on the issue. We notice the plea on behalf of the assessee on gross outgo of interest is Rs. 126.49 Crores whereas the assessee has also earned interest income simultaneously of a bigger sum of Rs. 130.02 Crores. Thus, essentially, there is excess of interest earned over interest expenditure. It is the contention on behalf of the assessee that in view of these facts it cannot be said that the assessee has claimed any expenditure on interest per se. It is thus the case of the assessee that netting o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.40(a)(ia) of the I.T. Act under the assumption that the aforesaid amount represented expenditure on payment of rent." 17. Learned AR for the assessee fairly submitted in the course of the proceedings that he does not seek to press the aforesaid Cross Objection filed by the assessee. 18. In the result, assessee's cross objection in CO No.190/Ahd/2013 concerning AY 2009-10 is dismissed as not pressed. ITA No. 2895/Ahd/2014-AY 2010-11-Revenue's appeal 19. The grounds of appeal raised by the Revenue in the captioned appeal concerning AY 2010-11 reads as under:- "(1) The CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 31,46,467/- made on account of un-utilized CENVAT credit by holding that the same as revenue neu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s computed under Rule 8D(2)(ii) of the IT Rules. The assessee has earned dividend income of Rs. 4,86,440/- which is tax free. As per the statement of facts as well as submissions before the CIT(A) (in para no. 3.4 page no.24 of the order of the CIT(A)), the assessee has asserted that as against the interest expenditure of Rs. 67.97 Crores considered for making disallowance, the assessee has earned taxable interest income of Rs. 68.71 Crore. It is thus the case of the assessee that the assessee has not incurred any interest expenditure effectively which calls for disallowance under Rule 8D(2)(ii) of the IT Rules. The assessee has also contended before the CIT(A) that the interest free funds available at the disposal of the assessee far exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equivalent amount of disallowances as found attributable to exempt income under normal provisions or not. While it is the case of the assessee that in view of long line of judicial precedents, such adjustment in 'book profit' is not permissible, it is the case of revenue that in view of codified law in this regard, the 'book profit' under 115JB has been rightly increased by the revenue. 6. We notice that issue is evolved and developed by certain judicial precedents. We find at the first instance that the identical issue came up for consideration before the Hon'ble Gujarat High Court in the case of Alembic Ltd. (supra) where the substantial question of law on the point as to whether adjustment made on account of disallowance under s.14A of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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