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TMI Blog2018 (4) TMI 1696X X X X Extracts X X X X X X X X Extracts X X X X ..... peals under section 253 of Income Tax Act out of which two appeal by assessee and one cross appeal by Revenue are directed against the order of Ld. Commissioner of Income-Tax (Appeals)-6, Mumbai, [for short the ld. CIT(A)] dated 29.01.2019 13.12.2011 for Assessment Years 2005-2006. In ITA No. 3336/Mum/2011 the assessee has raised the following grounds of appeal: Disallowance u/s.14A The learned Commissioner of Income-tax (Appeals) [ CIT (A) ] has erred both in law and on facts in concluding that disallowance under section 14A is applicable without verification of the details and evidences submitted by the Appellant in support of the claim that the appellant had not incurred any expenditure in relation to exempt income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely proved to have been spent during the previous year. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding the expenses towards issue of Foreign Currency Convertible Notes as revenue expense ignoring the fact that the same should be treated as capital expenditure. 6. Brief facts of the case are that the assessee filed return of income for relevant Assessment Year on 31.10.2005 declaring total income of ₹ 851,02,26,690/-. The assessment was completed on 26.12.2008 under section 143(3) of the Act. The Assessing Officer besides the other addition/disallowance disallowed warranty expenses of ₹ 15,39,00,000/- and expenses on issue of foreign currency convertible debt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order shows that similar disallowance was made against the assessee for AY 1997-98 and for AY 1998-99, however on appeal before CIT(A) the disallowance was deleted. The revenue filed appeal before the Tribunal and the same was dismissed vide order dated 06.01.2017 by following the order for AY 1996-97. The appeal of the revenue was dismissed by the coordinate bench of the Tribunal with the following order; Next ground is about provision for warranty of ₹ 35.61 crores. It is found that identical ground raised by the AG, was dismissed by the Tribunal, while deciding the appeal for AY 1996-97. We are reproducing paragraph no.2 of the pg. 10 of the said order and it reads as under:- Ground No.7 in revenue's appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rajasthan High Court in CIT Vs. Secure Meters Ltd. (321 ITR 611) and the decision of Hon'ble Bombay High Court in Tata SSL Ltd. in ITA No. 449 of 2011 dated 05.11.2012. The ld. AR of the assessee also relied upon the decision of Hon ble Supreme Court in case of India Cements Ltd. Vs CIT 60 ITR 52, CIT Vs ITC Hotel Ltd. 334 ITR 109 (Kar), CIT Vs Havells India Ltd. 352 ITR 376 (Del.), CIT Vs Instrumentation Ltd. (37 taxmann.com 271 (Raj.) and CIT Vs Sukhjit Starch Chemicals Ltd. 326 ITR 29 (P H). The ld. DR for the Revenue fairly conceded that this ground of appeal is also covered in favour of assessee. 10. We have considered the submission of ld. representative of the parties and find that similar ground of appeal was rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t find any merit in the grounds of appeal raised by Revenue. 13. In the result, appeal of the Revenue is dismissed. ITA No. 630/Mum/2013 by assessee 14. The assessee has raised the following grounds of appeal: (1) Disallowance under section 14A The learned Commissioner (Appeals) has erred in law and facts in confirming the disallowance made by assessing officer on ad hoc basis of 5% of the attempt income under the provisions of section 14 A of the income tax act, disregarding the facts of the case that no expenditure had been incurred in relation to exempt income. The learned Commissioner (Appeals) has erred in law and facts in confirming the disallowance under section 14A witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dividend income of ₹ 15.82 Crore. The AO while giving effect to the order of ld CIT(A) disallowed 5% of dividend income u/s 14A of the Act. We have perused the financial statement of assessee as on 31.03.2002. The assessee was having Capital of ₹ 319.82 Crore and Reserve Surplus of ₹ 2145.24 Crore. Thus, the assessee has total Capital, and Reserve Surplus fund of ₹ 2465.06 Crore. The assessee during the relevant financial year has made the investment of ₹ 1189.92 Crore. From the perusal of financial statement, we have noted that the interest free funds available with the assessee are more than the investment made during the year. The Hon ble Bombay High Court in Reliance Utility and Power Ltd (supra) held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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