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TMI Blog2020 (7) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition of Rs. 51,72,597/- u/s 14A r.w.r. 8D, in respect of investments from which the appellant has not earned any exempt income, disregarding the orders passed by Commissioner of Income Tax (Appeals) in earlier years and also disregarding the decision of Hon'ble Gujarat High Court in the case of Corrtech Energy Private Limited reported at 45 taxman.com 116 (Gujarat). 2. On facts and circumstances of the case, your appellant submits that the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts by confirming the addition in respect of river diversion expense and HT line shifting expenses of Rs. 23,03,770/- by treating the same as of capital expenses & not following the ration as specified in the decision of Hon'ble Supreme Court in the case of Bikaner Gypsums Ltd. vs. Commissioner of Income Tax (1991 AIR 227, 1990 SCR Supl. (2) 313). 3. Your petitioner craves leave to add, to alter on to amend the grounds of appeal, if the occasion arises." Ground No. 1:- 3. The short point involved in this particular ground is this as to whether the confirmation of addition of Rs. 51,72,597/- under Section 14A r.w.r 8D in respect of investment from which the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the Paper Book filed before us. He, therefore, prays for the relief in regard to the disallowance for computing average value of investment by restricting it to the investments which has only yielded exempt income during the year under. 5. On the other hand, the Ld. DR relied upon the order passed by the authorities below. However, he has failed to controvert such submissions made by the Ld. Senior Counsel appearing for the assessee. 6. We have heard the respective parties, we have also perused the relevant materials available on record and also the judgments relied upon by the Ld. AR, including the judgment passed by the Special Bench of Ld. Tribunal Delhi Bench in the matter of ACIT vs. Vireet Investment Pvt. Ltd. (2017) 82 taxmann.com 415 (Delhi - Trib.) (SB). While deciding the identical issue the Hon'ble Special Bench has been pleased to observe as follows:- "11.16 Therefore, in our considered opinion, no contrary view can be taken under these circumstances. We, accordingly, hold that only those investments are to be considered for computing average value of investment which yielded exempt income during the year. 11.17. As far as argument relating to be ascribed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. CIT(A) treating it as capital expenditure. Hence, the instant appeal before us. 9. At the time of hearing of the matter, the Ld. Senior Counsel appearing for the assessee submitted before us that under no stretch of imagination, the expenditure can be treated as capital expenditure particularly in view of the judgment passed by the Hon'ble Apex Court in the matter of Bikaner Gypsums Ltd. vs. CIT (1990) 53 taxman 279 (SC). Furthermore, the revenue expenditure cannot be stretched over a period for a specified number of years. The expenditure should be allowed for the year it has been specifically incurred. On this respect he has relied upon the judgment passed by the Supreme Court in the matter of Taparia Tools Ltd. vs. JCIT, Nasik (2015) 55 taxmann.com 361 (SC). A copy whereof has also been submitted before us. In view of the said judgment the Ld. Senior Counsel prays for allowing entire expenditure. 10. On the other hand, the Ld. DR relied upon the orders passed by the Revenue. We have heard the respective parties, we have also perused the relevant materials available on record. 11. It appears from the records that before the Ld. AO, the assessee submitted that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment relied upon by the Ld. AR passed by the Hon'ble Apex Court in the matter of Taparia Tools Ltd. vs. JCIT (2015) 55 taxmann.com 361 (SC) wherein the deduction of upfront interest charges paid during the relevant year was shown as deferred expenditure in the books of account to be written off over a period of 5 years whereupon the AO allowed only 1/5th of the payment as deduction, the Hon'ble Apex Court allowed the claim of expenditure of the assessee as deduction on the basis of this particular fact that the assessee made actual payment and the course of action adopted by the assessee inconsonance with the provision of the Act; though a different treatment was given in the books of account the same could not be a factor which would deprive the assessee from claiming entire expenditure as a deduction. The relevant discussion on the issue made by the Hon'ble Apex Court is as follows:- "18. What follows from the above is that normally the ordinary rule is to be applied, namely, revenue expenditure incurred in a particular year is to be allowed in that year. Thus, if the assessee claims that expenditure in that year, the IT Department cannot deny the same. However, in thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of Rs. 2,72,25,000/- and Rs. 55,00,000/- respectively in the year in which the amount was actually paid. The appeals are allowed in the aforesaid terms with no orders as to costs." 12. In the case in hand we find that the assessee has also not spreaded particular expenditure over a period of years as it reflects from the return filed by it and it has claimed the entire expenditure as deductable in the same year. The assessee has claimed the expenditure in this particular year in which it has been incurred and, therefore, when it has chosen to claim the entire expenditure spent it is justifiable to allow such claims for the year under consideration invoking the provision of Sec. 36(1)(iii) of the Act and also the ratio laid down by the judgment cited above. Respectfully, relying upon the judgments passed by the Hon'ble Apex Court we allow the entire claim of the assessee. The addition is, therefore, deleted. 13. In the result, the ground of appeal is allowed. ITA No. 2278/Ahd/2018 A.Y. 2015-16:- 14. The appeal has been filed by the assessee with the following grounds:- "1. In facts & circumstances of the case, your appellant, most respectfully submits that the Ld. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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