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TMI Blog2019 (11) TMI 1357X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of a given case. In the above facts, the expenses on replacement of electricity meters would be on revenue and not on capital account. The Counsel for the Respondent has not been able to point out that how the conclusion of the Tribunal in the earlier years will not be applicable to the present Assessment Year. Respectfully following the aforesaid decision, we do not find any infirmity in the order of the Ld. CIT(A). Accordingly the ground No.1, raised by the revenue is dismissed Deduction u/s 80IA - proportionate apportionment and allocation of Head Office expenses amongst Goa and Windmill Units respectively while calculating profits eligible for deduction u/s 80IA of the Act in respect of the said units - HELD THAT:- We find that the Ld. CIT(A) had granted relief to the assessee in respect of impugned issue by placing reliance on various decisions of this Tribunal in assessee s own case passed up to A.Y 2010-11 and also on the decisions of Hon ble Jurisdictional High Court in the assessee s own case passed up to A.Y 2008-09. We find that the Ld. CIT(A) had also relied on the order passed his predecessor for A.Y 2012-13 and granted relief to the assessee. In asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 115JB - HELD THAT:- We find that Ld. CIT(A) had deleted the said disallowance by following the decision of Hon ble Special Bench of Delhi Tribunal in the case of Vireet Investments [ 2017 (6) TMI 1124 - ITAT DELHI] . But we find that the Special Bench had only held that the computation mechanism provided in Rule 8D(2) of the Rules cannot be imputed in clause (f) of Explanation (1) to Sec. 115JB(2) of the Act. The special Bench also held that the actual expenses debited to profit and loss account which are incurred for the purpose of earning exempt income need to be disallowed u/s 14A of the Act for the purpose of 115JB - Since, in the instant case, the assessee had already worked out the actual disallowance of ₹ 81,47,392/- as indirect expenses incurred for the purpose of earning exempt income, we direct the Ld. AO to adopt the same figure for the purpose of disallowance u/s 14A of the Act while computing the book profits u/s 115JB of the Act. Accordingly, the ground No. 7 raised by the Revenue is partly allowed. - ITA Nos. 1839 & 1840/Mum/2018, CO Nos. 82 & 83/Mum/2019 - - - Dated:- 6-11-2019 - Shri M Balaganesh, Accountant Member And Shri Ramlal Negi, Judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Ld. AO. We find that the Hon ble Jurisdictional High Court in assessee s own case for the A.Y 2002-03 in Income Tax Appeal No. 277 of 2009 dated 01.07.2013, had considered this issue. The question raised before the Hon ble High Court is as under: (a) Whether on the facts and circumstances of the case and in law, the ITAT is right in holding that the expenditure incurred by assessee on replacement of electricity meters is not a capital expenditure? The Hon ble High Court held as under:- 3.(i) So far as question (a) is concerned, the Tribunal allowed the claim of the respondentassessee by following its order for the Assessment Years 19992000, 200001 and 200102. In response to our specific query whether revenue has challenged the order of the Tribunal for the Assessment Years 199900, 200001 and 200102 in respect of the issue raised in question (a), the learned Counsel for the revenue states that in spite of having sought information on the above aspect from the revenue by his letter dated 15 April 2013, he has received no response from the department. (ii) In any view of the matter, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard the rival submissions. We find that the Ld. AO had called for explanation from the assessee company as to why the head office expenses should not be allocated among the various units to arrive at the correct profits derived from the eligible undertakings for the purpose of computing deduction u/s 80IA of the Act. The assessee submitted that this issue has already been decided in its favour in earlier years. Since the department had not accepted the decision of appellate authorities and appeals preferred before the higher appellate forum were pending, the Ld. A.O in order to maintain judicial consistency and in order to keep the issue alive resorted to reduce the claim of deduction u/s 80IA of the Act in respect of these two eligible units to the extent of allocation of head office expenses. At the outset, we find that there is no dispute that these units are eligible for claiming deduction u/s 80IA of the Act. We find that the Ld. CIT(A) had granted relief to the assessee in respect of impugned issue by placing reliance on various decisions of this Tribunal in assessee s own case passed up to A.Y 2010-11 and also on the decisions of Hon ble Jurisdictional High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - ₹ 87,60,48,230/- Less: Amount disallowed by the assessee - ₹ 81,47,392 /- Total disallowance u/s 14A - ₹ 86,79,00,838/- 4.2 We find that the Ld. CIT(A) had given a categorical finding that assessee s share capital and reserves and surplus were ₹ 18650.43 crores and ₹ 20235.65 crores at the beginning and closing of the year respectively as against total investments of ₹ 12,785.06 crores and ₹ 13301.43 crores at the beginning and closing of the year respectively. We find that the Ld CIT(A) observed that the assessee s own interest free funds were in far excess of total investments made. Accordingly by placing reliance on the decisions of Hon ble Jurisdictional High Court in the case of Reliance Utilities and Power Ltd., reported in 313 ITR 340 and in the case of HDFC bank, reported in 366 ITR 505, the Ld. CIT(A) deleted the interest disallowance made by the Ld. A.O under Rule 8D(2)(ii) of the Rules. We find that the factual findings given by the ld CITA on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the actual expenses debited to profit and loss account which are incurred for the purpose of earning exempt income need to be disallowed u/s 14A of the Act for the purpose of 115JB of the Act. Since, in the instant case, the assessee had already worked out the actual disallowance of ₹ 81,47,392/- as indirect expenses incurred for the purpose of earning exempt income, we direct the Ld. AO to adopt the same figure for the purpose of disallowance u/s 14A of the Act while computing the book profits u/s 115JB of the Act. Accordingly, the ground No. 7 raised by the Revenue is partly allowed. 6. In the result the appeal of the Revenue for the A.Y 2013-14 in ITA No. 1839/Mum/2018 is partly allowed. CO No. 82/Mum/2019, A.Y: 2013-14 Assessee CO 7. The only ground raised by the assessee in its CO is with regard to action of the Ld. CIT(A) directing the Ld. A.O to re-compute the disallowance u/s 14A of the Act by considering only those investments (excluding investments in subsidiaries) which have yielded tax free income during the year for computation of disallowance u/s 14A of the Act r.w.r 8D of the Rules. We find that this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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