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TMI Blog2019 (4) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... is involved. Disallowance of interest and other expenses under section 14A to 0.5% of the total interest and expenditure - HELD THAT:- Dis-allowance of the interest worked out by the Commissioner of Income Tax [Appeals] on the basis of the loan taken and for the period in which it was held. It was after referring to the facts and figures, that a definite finding was rendered by the Tribunal, interdicting disallowance of interest on other expenses to an extent of 0.5% of the total interest and the expenditure. The said aspect is more a question of fact, than any question of law and as such, even if the additional ground and the question of law mooted by the Department are permitted to be raised by allowing the I.A., it will not tilt the balance in any manner projecting any substantial question of law. Loss sustained on IRFC bonds - capital loss OR business loss - version of the Department, with reference to the loss sustained on IRFC bonds is that it is a 'capital loss' and not a business loss - HELD THAT:- The verdict passed by the Tribunal, in favour of the assessee under this head is perfectly within the four walls of law and does not warrant any interference, as n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The respondent assessee is engaged in the business of manufacture and sale of automotive tyres, tubes etc., who filed return in respect of the assessment year 1997 - '98 on 28.11.1998, which was followed by the revised return dated 29.09.1999. The assessment was finalized by the assessing officer under section 143 (3) of the Income Tax Act, as per Annexure A order dated 30.03.2000, assessing a total income of ₹ 14,21,00,850/-. This was sought to be challenged by the assessee by filing an appeal before the Commissioner of Income Tax (Appeals), who granted some reliefs. This was the subject matter of challenge before the Income Tax Appellate Tribunal. The assessee had claimed liability of sale of IRFC bond of ₹ 48,06,898/- as revenue expenditure in the revised return of income, which was considered by the assessing officer as 'capital loss' and this came to be confirmed by the Commissioner of Appeals as well. But the Tribunal, placing reliance on the verdict passed by the Apex Court in assessee's own case Appolo Tyres Ltd. Vs. Commissioner of Income Tax, Kochi [255 ITR 273] held that the business of trading shares and securities is an eligible busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the employees, paid to the Employees' Welfare Trust. This was disallowed by the assessing officer and also by the Commissioner holding that it was diversion of income. After examining the facts and figures, the Tribunal held that there was force in the version of the assessee that it was only towards the transportation cost of the employees as arranged by the Welfare Trust. If it was not undertaken by them, the transportation would have to be arranged by the assessee company and this being the position, it was part of the actual expenses incurred by the assessee being transportation cost of the employees. It was accordingly, that the claim was allowed, which is now sought to be interdicted. 8. I.A. No. 1898 of 2010 has been filed raising an additional ground and a question in the following terms : Ground G : The Tribunal should have confirmed the order of CIT (A) on the above issue without remanding the same to the Assessing Officer. Question No. 3 : Whether, on the facts and in the circumstances of the case and in the light of the cogent reasons given by the CIT (A) the Tribunal is right in law in restricting the disallowance of interest and other expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tyres and sale and purchase of units of the UTI are common in nature and both the businesses are intertwined and interlaced. This finding is accepted by the High Court also. We also find that this business of the assessee company of buying and selling of units is a business as contemplated under S.32 AB of the Act. The question the is: is it an eligible business under the said section? The term eligible business is defined under sub-s. (2) of S.32AB. As per that definition, all business of an assessee company will be an eligible business unless it falls under the type of business enumerated in sub clauses (a) and (b) of S.32AB(2). It is nobodys case that this business of the assessee Company is one of those businesses which fall under businesses enumerated in clauses (a) and (b) of sub-s. (2) of S.32AB. Therefore, there is no doubt that the business of the assessee company is an eligible business. The fact that is shown under a different head of income would not deprive the company of its benefit under S.32AB so long as it is held that the investment in the units of the UTI by the assessee company is in the course of its eligible business. Therefore, in our opinion, the dividend i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fare Trust created by the assessee is in respect of transportation of the employees, the assessee is entitled to claim deduction of the contribution of ₹ 22,65,580/- made to the trust ? ( b) Whether, on the facts and in the circumstances of the case and in the light of Section 40A (9) read with Section 36 (1) (iv) (v) read with ground (F) the assessee is entitled to claim the deduction of ₹ 11,31,385/- due to foreign exchange fluctuation ? 3. Whether, on the facts and in the circumstances of the case and when Section 43A of the I.T. Act provides for adjustment of actual cost of capital asset only on settlement of the liability, that is, on actual payment, the assessee is entitled to claim the deduction of ₹ 11,31,385/- due to foreign exchange fluctuation ? 4. Whether, on the facts and in the circumstances of the case and also in view of the omission of first proviso to clause (ii) of Sub section (1) to Section 32 with effect from 1/4/1996 by finance Act which provided for 100 % depreciation - ( i) the ITAT is right in remitting of the issue to the Assessing Officer ? ( ii) The assessee is entitled to claim the deduc ..... 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