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TMI Blog2018 (8) TMI 1772X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue afresh. Treating the receipt of shares received as a gift in treating as taxable income under the head “Business income” OR “Income from other sources” - HELD THAT:- Definition of ‘gift’ as defined in the Transfer of Property Act, 1882; that "Gift is a transfer of certain existing moving or immovable property made voluntarily and without consideration by one person, called the donor, to another, called the donee and accepted or on behalf of the donee." As the issue was equalization of wealth which was made in pursuance of a family arrangement, it was held that the transfer could not be called voluntary and without consideration and therefore not a valid gift. The facts of the said decision are not applicable to the present case. Further, in the said case the receipt of gift was credited to the Profit and Loss account and not to Capital Reserve. However, the gift of share in the present case is shown as Capital receipt. The transfer of property was done pursuant to a family arrangement. This decision does not lay down the proposition that a Company cannot make a gift. They only state that a company cannot be part of a family arrangement. Accordingly, the facts of the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, we admit the additional claim of the assessee and direct the assessing officer to verify the facts and delete the disallowance under section 43B, if the contribution of EPF was deposited before filing the return of income under section 139(1). In the result this ground of appeal is allowed for statistical purpose. - ITA No. 4423, 4585, 4850/Mum/2014(Assessment Year- 2009-10, 2010-11, 2011-12) - - - Dated:- 31-8-2018 - Shri R.C. Sharma And Shri Pawan Singh, JJ. Assessee by: Sh. P.J. Pardiwala Sr. Advocate with Sh. Jos Sinhgwi Advocate Sh.Kirit Kamdar-CA Revenue by: Sh. Girish Dave Special Counsel/ Advocate with Sh. Suman Kumar Sr. DR also assisted by Ms. Kadamabri Advocate Pawan Singh, 1. This group of three appeals by assessee under section 253 of Income tax Act are directed against the separate orders of Commissioner (Appeals)- 54, Mumbai for assessment year 2009-10, 2010-11 and 2011-12. The assessee has raised one common ground of appeal in all assessment years, on disallowance under section14A, thus on the request of parties all appeals were clubbed together, heard and are decided by common order for avoiding conflicting decision and for the sake of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,11,620 shares of Uniphos Enterprises Ltd (DEL) without consideration as a capital receipt not chargeable to tax. 2.2 On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the receipt of 8,73,01,770 shares of UPL and 1,08,11,620 shares of UEL, without consideration, by the appellant is a benefit in the ordinary course of its business and is taxable under section 28(iv) of the Act. Taxed as income from other sources under section 56(1): 2.3 On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in alternatively taxing an amount of ₹ 1464,54,53,232/- being the market value of shares of UPL and UEL received by the appellant without consideration as 'Income from Other Sources' under section 56(1) of the Act. 2.4 On the facts and in the circumstances of the case and in law, the CIT(A) erred in making various observations, comments and issuing directions which are beyond the powers of the CIT(A) and in giving findings wholly irrelevant to the issues in appeal. 2.5 Without prejudice to the above grounds of appeal, the CIT(A) having observed that the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were reflected in the books of the appellant. Gift of UPL and UEL shares is a colourable device : 2.12 On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the action of the AO in holding the aforesaid transaction as a colourable device to avoid tax by applying the decision of the Supreme Court in the case of McDowell Co Ltd (154 ITR 148) 2.13 The CIT(A) further erred in making the following observations: (i) it is indisputable that through concerted and coordinated action, the Shroff family/Group entered into a web of transactions of transfer of shares of UPL and UEL held in individual capacity/through firms/companies/trusts to the appellant so as to enable them to raise their controlling interest in UPL and UEL; (ii) by this dubious methodology, the persons who transferred their shares in UPL and UEL to the appellant have reassumed power over the assets and management of the companies in which they earlier had control; (iii) the transfer of shares made by the partnership firms/trusts is not in consonance with the terms of respective Partnership Deeds and Trust Deed and the whole exercise was nothing but a sham or a colourable d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (UEL), received without consideration as income of the assessee under section 28(iv) and in alternative under section 56(1) and brought the market value of shares of ₹ 1464,54,53,232/-as taxable income of the assessee. On appeal before Commissioner (Appeals) the action of assessing officer was confirmed. The ld Commissioner (Appeals) the Commissioner (Appeals) further held that the market value of shares of UPL and UEL gifted by various donors be taxed as deemed dividend under section 2(22)(a) of the Act in the hands of assessee and that transfer of shares are colorable device. The ld. Commissioner (Appeals) further added the market value of shares to the book profit under section 115 JB and thereby enhances the book profit and directed assessing officer accordingly. Therefore, aggrieved by the order of Commissioner (Appeals) the assessee has filed present appeal before us raising the basically three grounds of appeal as referred above. 3. We have heard learned Counsel Shri PJ Pardiwala Senior Advocate assisted by Mr. Jos Sinhgwi Advocate for assessee and learned Special Counsel Shri Girish Dave Advocate assisted by Shri Suman Kumar learned Joint Commissioner of income ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship of ₹ 2,41,092/-, both the income were claimed as exempt income. The assessee had voluntarily made disallowance under section 14A of ₹ 34,215/-. The assessing officer was not satisfied with the disallowance made by assessee. Accordingly, the assessee was asked to explain as to why expenditure should not be disallowed by invoking the provisions of Rule 8D. The assessee furnished its reply, in the reply the assessee contended that no interest expenditure had been incurred for the purpose of investment in shares generating exempt income. However, the assessing officer was not satisfied with the working of disallowance under section 14A read with Rule 8D furnished by assessee. For the reasons that the assessee had not considered all investment as appearing in the balance-sheet. The assessing officer invoked the provision of Rule 8D. The assessing officer worked out the disallowance under Rule8D ₹ 18,61,105/-, which consist of Demat charges of ₹ 34,215/- under Rule 8D(2)(i) and administrative expenses of ₹ 18,26,890/- under Rule 8D(2)(iii). As the assessee voluntary disallowed demat charges in the computation of income, the assessing officer granted set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (UEL) received as a gift in treating as taxable income under the head Business income and as Income from other sources . The learned Sr. Counsel for the assessee summits that the assessee is a wholly owned subsidiary of Demuric Holding Private Limited ( DHPL ). All the shares of DHPL are held by various members of the Shroff family and enterprises of the Shroff group. The members of the Shroff group are the promoters of and have a substantial shareholding in United Phosphorus Limited ( UPL ) and Uniphos Enterprises Limited ( UEL ) which are companies whose shares are listed on recognized stock exchanges in India. Assessee Company was set up to manufacture Chemical products and trade in industrial salts, Chemicals and other products and during the relevant previous year was engaged in the business of trading in industrial salts, chemicals and other products and during the previous financial year related with this assessment year under consideration, the assessee received 87301770 shares of United Phosphorus Ltd (UPL) and 10811620 Shares of Uniphos Enterprises Ltd (UEL) by way of gift from various group entities including individuals. No consideration was paid by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the head income from other sources . As there is no explicit provision for taxing receipt of share of a listed company by way of gift, the same would not be chargeable to tax at all. 9. The ld Counsel further summits that the receipt of share is also not taxable as a business income of assessee under section 28(iv) of the Act as the business of the assessee is manufacturing of chemical products and trading in industrial salts, chemicals and other products. There is no dispute about the nature and business activities of the assessee. The assessee has not received the gift of shares in its business activities. The shares were gifted by the family members of promoters of the assessee company. The shares were transferred after payment of requisite stamp duty. 10. On the taxability under section 2(22(a) of the Act, the ld Counsel for assessee submits that the addition in respect of deemed dividend under section 2(22)(a) of the Act is based on a wrong appreciation of facts. It was submitted that assessee is not a shareholder of DHPL and, accordingly, the question of taxing the receipt of gift from DHPL as deemed dividend under section 2(22)(a) does not arise. The fact that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was placed on the Tribunal order passed in the case of the individual donors Jaidev Shroff Vs ACIT and other donors (ITA No. 4660/Mum/2015), Ultima Search Vs ACIT (ITA No. 4646/M/2015) and Bloom Packaging (ITA No. 4663/M/2015). 13. On the other hand, the ld. Special Counsel for the Revenue submitted that whole Gamut of transaction of transfer of share by way of gift by the related entity is a colourable device. The ld. DR submits that there was two tranches in which share of UPL and UEL were allegedly gifted by various group entity. In first tranche on 18.09.2009 Demuric Holdings Pvt. Ltd. gifted 5,84,42,700 shares to assessee and 2nd tranche on 26.02.2010 various other entities of group of assessee gifted 2,88,59,070 shares to assessee. Therefore, total 8,73,01,770 shares were gifted to the assessee. The assessee got the share by way of transfer deed dated 26.02.2010 wherein 45036344 share in UPL and 450565 share of UEL by Shri Jai R. Shroff and Sandra R. Shroff, however, the said transfer deed does not bear the signature of Jai R. Shroff, where the share were gifted jointly by the two persons. Such transfer is not a valid transfer in the eyes of law. 14. It was further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined on the nature of document and intention of the parties has to be seen. In support of his submission, the ld. DR relied upon the decision of Mahant Ramdhanpuri V/s Banke Bihari Sharan Ors. AIR 1958 SC 941, DLF Universal Ors V/s Director Town Country Planning, Haryana (2010) 14 SCC 1. 16. It was submitted that it is within the domain of Assessing Officer to decide the genuineness of transaction and relied upon the decision of Hon ble Madras High Court in case of ITO V/s K. Jayaram 161 ITR 557. The gift by one company to another company is not valid and ld. DR relied upon the decision of ACIT V/s Bilakhia Holdings (49 taxman.com 91) (Ahd Trib.), B.A. Mohota Textile Traders (P.) Ltd. V/s. DCIT (82 taxmann.com 397 (Bom). It was further submitted that amendment in Memorandum of Association and Article of Association of donor companies was made in order to validate the gift to the assessee. The assessee entered into gamut of transaction which was shown as re-organization of the group but the real motive was something different. The apparent was not real. 17. The ld. Special Counsel further submits that the Bombay High Court while hearing the stay application of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g stay and accordingly stay was granted. The High Court further observed that benefit arising to assessee is not a benefit arising from the busienss of the assessee and it goes to say that the reliance placed on the decision of Tribunal in case of DP Word vs. DCIT (supra) is well founded and the assessee has just more than strong prima facie case. In reply to the submssion of ld. DR that Gujarat High Court in case of Prakriya Pharmacham (supra) was decided in light of section 45 and was a case of validity of reopening. The ld. Sr. Counsel for assessee submits that Hon ble Gujarat High Court has made relevant observation regarding taxability of gift transaction wherein it was held that without any consideration, gift shall be an exempt transfer under section 47(iii) and section 48 would not apply. For submission related to the order of Tribunal in Bloom Packagingn and Uniphos International Ltd was not decided the issue on merits. The ld. Sr. Counsel replied that the submission is factually incorrect. In the order passed by the Tribunal in the case of Bloom Packaging (ITA No. 4663/Mum/2015) and Uniphos International (ITA No. 4676/ Mum/2015), the gift transaction which was treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, there can be two possibilities viz., the transaction may be treated as void or voidable at the option of the aggrieved party. Further, if the transaction is held to be void, then there is no transfer of shares and, accordingly, the question of its taxability under section 56(1) or section 28(iv) of the Act would not arise. Secondly, no objection has been taken by any of the concerned parties seeking to annul the transaction till date in respect of the alleged defaults and thus, the said transactions have to be treated as validly executed. 22. For the reliance on decision in case of John Tinson Co Pvt Ltd Vs Surjit Malhan (supra) relied upon by the DR, it is submitted that the facts of the said decision does not apply to the present case. In the aforementioned decision the transferor did not have authority to transfer the shares since the ownership did not lie with the transferor. The sequitur of the decision as laid down by the Supreme Court was that there is no transfer at all and if that were so, then, there is no income chargeable to tax. Application under Rule 29 of Income Tax (Appellate Tribunal) Rules 23. The ld. Special Counsel for the Revenue submits that the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporated in Singapore and have its independent Board of Directors and that UPL has no control over the affair of said company. Further, in the course of penalty proceeding under section 271(1)(c) in case of assessee for AY 2010-11, it came to the notice that loan of ₹ 212 Crore were guaranteed by M/s Timberlane. The loan of ₹ 106 Crore were taken by assessee and its holding company, DHPL from Credit Suisse Finance (I) Pvt. Ltd. The Revenue authorities had obtained the copy of loan agreement, bank statement between the different entities, perusal of which reveals that M/s Timberlane could exercise put option to acquire all share which were pledged against grant of loan. Therefore, on the above referred fact, the Revenue intends to file the additional evidence which consist of Stand-by Facility Agreement dated 04.08.2017 and the other documents filed in the form of set of Paper Book No. I, II III. 25. The ld. Special Counsel for the Revenue further submits that the Revenue has threefold prayer for admission of additional evidence. The ld. Special Counsel filed a written prayer dated 16.02.2018 wherein it is prayed that (i) the additional evidence filed by Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... error in assessment order as framed, the same may be cured either by a rectification of the order in exercise of the powers under section 154 or by a reassessment in exercise of the powers vested with Assessing Officer in section 147 or by way of a revision in exercise of the powers vested in a Commissioner of Income-tax under section 263. Each of these provisions requires certain jurisdictional conditions to be fulfilled and the exercise of power under each of the provisions is subject to a time limit within which it can be exercised. By permitting the prayers of the Revenue to lead additional evidence and enable a further enquiry to be conducted not only would the Tribunal set at naught the jurisdictional conditions postulated in the aforesaid sections but would also be giving a go-by to the limitation that has been provided for under the Act. The reliance was placed on the decision of Special Bench of the Tribunal in the case of D.H.L Operations B.V.(13 SOT 581) (Mum SB) wherein the Tribunal rejected the application of the Revenue for seeking to admit an additional ground for these very same reasons. If the Revenue s application is at all accepted, it would tantamount to permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh evidence in an appeal filed by the assessee unless it is so required by the Tribunal. Thus, the admission of the additional evidence is the discretion of the Tribunal. No doubt the Tribunal is required to exercise its discretion with sound reasoning, guided by various judicial pronouncements. 29. The Jurisdictional High Court in CIT Vs Kamal C Mehboobbani (214 ITR 15) (Bom) held as under: 7. --------------, we are of the opinion that rule 29 does not confer any right on the parties as such to produce any additional evidence either oral or documentary before the Tribunal. On the other hand, such a right has specifically been taken away by prohibiting the production of the additional evidence by the parties. The power has been vested only in the Tribunal to require production of any document or evidence if it is of the opinion that it is necessary to do so to enable it to pass order or for any other substantial cause. For doing this also, the Tribunal has to record reasons. In the present case, the Tribunal has not issued any such direction. On the other hand, it has stated that it is not satisfied that any such direction should be issued. In that view of the matter, we do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition made on account of unexplained credit under section 68 of the Act. The observations of the Court were enumerated in Para 42. The observations of the Court are reproduced as under: 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT (Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements reveal a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a further inquiry in exercise of the power under Section 250(4). This approach not having been adopted, the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observe that the loan taken by DHPL and assessee, and the capital infusion by Timberlane in DHPL are in no way related to the gift transactions. The said loan transactions were completed before the gifts of shares were transferred / gifted. We are in agreement with the submission of ld. Sr. Counsel for assessee that by allowing the prayer of revenue to lead additional evidence and unable a further enquiry would tantamount to provide the revenue an opportunity of re-opening of the case which is not permissible under the garb of prayer for seeking admission of additional evidence, when the revenue has not filed any appeal, cross objection or exercise power conferred under section 147, 154 or 263 on various authorities under the Act. 35. In view of the discussion of various case law relied by the parties, we are of the view that the additional evidence is necessarily not required by the Tribunal to arrive at a conclusion in respect of the issue before Tribunal. Considering the nature of the documents and the prayer made in the application under Rule 29, we do not find any substances in the application of the revenue to allow them to file the additional evidence as the said additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or to himself and one or more other living persons; and to transfer property is to perform such act.' In this section living person includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals . Section 122 of the Transfer of Property Act provides for making of a gift and permits transfer of moveable or immovable property but without any consideration. The shares or interest in a company is a moveable asset as per the Companies Act. Further as per section 5 of the Transfer of Property Act, a company is a living person, competent to transfer a property and therefore the Transfer of Property Act permits a company to be a transferor (donor). In DP World (P) Ltd vs. DCIT (140 ITD 694) (Mum) the coordinate bench of Tribunal while considering the taxability of the Gift held that when, the assessee received three residential flats by way of gift of shares of the concerned housing society from its sister concern and in absence of any specific provision taxing a gift as a deemed bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary requirement. It was held that the only requirement for company is to make gifts as per respective Memorandum and Article of association, which authorize the company for the same. Applying the proposition of law laid down in the above decision to the facts of the instant case, it is found that the assessee and the donor companies are authorized in this regard for receiving and making gifts respectively by their Memorandum and Articles of association. 40. The Hon ble jurisctional High Court in assessee s own case (Nerka Chemicals Vs Union of India 371 ITR 280) while hearing the writ petition against the refusal of stay of recovery held that the assessee has more than just a strong prima facie case in this regard. The title given to a document is not determinative of its true character. The purport of the document must be ascertained on a consideration of the contents thereof. The respondents do not deny that no consideration in the terms of money or money(s) worth was paid by the assessee to the transferors. The High Court further referred the decision of Mumbai Tribunal in DP world Ltd Vs DCIT and held that the receipt of gift has been held as not taxable under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or perquisite arising from business or exercise of a profession, as income from business or profession. 82. A new clause (iv) has been inserted in section 28, with effect from 1-4- 1964, by section 7 of the Finance Act, 1964, under which the value of any benefit or perquisite (whether convertible in money or not) arising from business or the exercise of a profession will be chargeable to tax under the head Profits and gains of business or profession. 83. The effect of the above-mentioned amendment is that in respect of an assessment for the assessment year 1964-65 and subsequent years, the value of any benefit or amenity, in cash or kind, arising to an assessee from his business or the exercise of his profession, e.g., the value of rent-free residential accommodation secured by an assessee from a company in consideration of the professional services as a lawyer rendered by him to that company , will be assessable in the hands of the assessee as his income under the head Profit and gains of business or profession . 45. Further the coordinate bench in Rupee Finance Management (P) Ltd Vs ACIT (supra) held that when as a part of memorandum of understanding between group compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under :- '2. Definitions. - In this Act, unless the context otherwise requires,- (18) company in which the public are substantially interested -a company is said to be a company in which the public are substantially interested- (a)** ** ** (b) if it is a company which is not a private company as defined in the Companies Act, 1956 (1 of 1956), and the conditions specified either in item (A) or in item (B) are fulfilled, namely :- (A) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) were, as on the last day of the relevant previous year, listed in a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder ; (B) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by- (i) the Government, or ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation to clause (vii);' 49. Now we deem it appropriate to refer the legislative history of section 56 and the amendments made to the said provisions from time to time in order to widen its ambit and cover transfer of specific assets by certain persons without consideration or for inadequate consideration. sub section 2 clause (v) was inserted w.e.f. 1 April 2005 to tax the receipt of any sum of money exceeding ₹ 25,000 without consideration by any individual or HUF subject to certain exclusions. sub section 2 clause (vi) was inserted w.e.f. 1 April 2007 to tax the receipt of any sum of money exceeding ₹ 50,000 without consideration by any individual or HUF subject to certain exclusions. sub section 2 clause (vii) was inserted w.e.f. 1 October 2009 to tax the receipt of money or any property whose value exceeds ₹ 50,000 without consideration or for inadequate consideration by any individual or HUF subject to certain exclusions. sub section 2 clause (viia) was inserted w.e.f. 1 June 2010 to tax the receipt of shares of a closely held company whose value exceeds ₹ 50,000 without consideration or for inadequate consideration by any firm or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preventing the practice of transferring unlisted shares at prices much below their fair market value or without any consideration. It is pertinent to mention that after amendment to section 56(2)(viia), only the transfer of shares of unlisted company without consideration or for inadequate consideration is deemed to be income chargeable to tax. It is not in dispute that the assessee has received gift of shares of UPL and UEL being listed company, which cannot be treated as income chargeable to tax. In the present case the shares were gifted even prior to the proposal made in the Finance Act 2010 w.e.f. 01.06.2010. We are in agreement with the submission of ld. Sr. Counsel for the assessee that the Gift tax Act,1958 has been repealed and there is no tax on the Gift either on the donor or on the donee in any form under Income tax Act or any other Act. The contention of the ld. Sr Counsel so far as it relates to repealing the Gift tax Act was not disputed by the Revenue. Further it is the contention of the ld. Sr Counsel for the assessee that the taxability of gift remained outside the tax net for a long time until section 56(2) was brought on statue book for bringing to tax gift r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok profit under section 115JB of the Act. 56. The case laws relied by ld. Special Counsel for revenue is not applicable on the facts of the present case. Reliance was placed on the decision in ACIT Vs Bilakia Holding (supra), the said case deals with the family arrangement wherein three brothers of a family held equal interest and shareholding in the assessee company. The various members of the Bilakhia family entered into a deed of family arrangement with a view to consolidate and equalize values of the assets held by each of the parties. The question before the Tribunal was whether the transfer of shares of Nestle Ltd. and Hindustan Lever Ltd. held by members of the family to the assessee company as per the family arrangement claimed to have been transferred without any monetary consideration can be held to be a gift or not? The Tribunal referred to the definition of gift as defined in the Transfer of Property Act, 1882; that Gift is a transfer of certain existing moving or immovable property made voluntarily and without consideration by one person, called the donor, to another, called the donee and accepted or on behalf of the donee. As the issue was equalization of wealt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand the ld. Special Counsel relied on the order of the authorities below. 59. We have considered the rival submissions of the parties and have gone through the orders of authorities below. We have noted that the assessing officer has passed assessment order on the basis of original return of income, thereby not considered the claim of interest expenses of ₹ 10.17,230/-. However, the ld CIT(A) dismissed the ground of appeal the claim of the assessee holding that the assessee is in appeal for AY 2009-10, it could only be allowed if assessee had accepted the action of assessing officer in AY 2009-10 and not challenged the same in further appeal. We have noted that in assessee s appeal for AY 2009-10, the assessee has not raised similar ground of appeal related with the same disallowance of interest. In our considered view the assessee can raise this issue only in the year, under consideration as the assessee the corresponding interest expenditure has been offered by the assessee during the previous year related with AY 2010-11. Therefore, we find convincible force in the submission of ld. Sr. Counsel for assessee. Thus, this ground of appeal is restored to the file of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stored to the file of assessing officer with similar direction. In the result all the grounds of appeal in this appeal is allowed for statistical purpose. 62. In the result the appeal of the assessee for assessment year 2011-12 is allowed for statistical purpose. ITA 4423/Mum/2014 for A.Y. 2009-10 The grounds of appeal raised in this appeal read as under: 1. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) ['CIT(A)'] erred in upholding the action of the Assessing Officer ('AO') in disallowing a sum of ₹ 50,89,507/- under section 14A read with Rule 8D. 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not excluding investments in companies which yielded dividend wherein such dividend has suffered tax under the provisions of section 115-O. 3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating that investment in subsidiary/ associate company is done on account of business expediency in order to promote business and profits of the Group Companies and not to earn dividend income. 4. On the facts and in the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghtly rejected by assessing officer as the same was deposited beyond the due date as per clause (va) of sub-section(1) of section 36. The facts related with this issue are not in dispute that the contribution of the EPF was deposited after due date; but before the filing of the return of income. 67. The CBDT vide its circular No. 22/2015 dated 17.12.2015 clarified that the first proviso, being curative in nature, is retrospectively applicable w.e.f. 01.04.1988. It was further clarified that in case contribution of EPF is paid on or before due date of return of income under section 139(1) no disallowance can be made. Therefore, by invoking the power vested with appellate authority, we admit the additional claim of the assessee and direct the assessing officer to verify the facts and delete the disallowance under section 43B, if the contribution of EPF was deposited before filing the return of income under section 139(1). In the result this ground of appeal is allowed for statistical purpose. 68. Ground No. 5 relates to deduction of interest expenditure of ₹ 10,17.230/-. We have noted that the similar relief is claimed by the assessee in appeal for AY 2010-11, which we ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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