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TMI Blog2020 (11) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... the both method of calculation and in order to apply provision of section 14A, he should consider the amount calculated above said two methods whichever is less. Accordingly, ground no. 1 raised by assessee is allowed for statistical purposes. TDS u/s 194J/194H - disallowance under section 40(a)(ia) in respect of commission on credit card companies paid to various banks for non-deduction of tax at source - HELD THAT:- Since facts of the case are exactly similar [ 2017 (5) TMI 1745 - ITAT MUMBAI] for which we have already given our finding. Accordingly the disallowance made by the Assessing Officer cannot be sustained and the Order of the CIT (Appeals) deleting the aforesaid disallowance, is upheld. Accordingly these grounds stands dismissed. Addition of amount forfeited by assessee on share warrants u/s 43(5) - HELD THAT:- As decided in own case[ 2017 (5) TMI 1745 - ITAT MUMBAI] basic nature of the transaction relates to raising of capital through convertible warrants. The amount forfeited on account of non payment of subsequent amounts cannot be treated as a income of the assessee in view of the various judicial pronouncements as well as the basic nature of the receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submission of assessee, AO completed the assessment order u/s 143(3) of the Act after making the various disallowances/additions. 4. Aggrieved with the above order, assessee preferred an appeal before Ld CIT(A) and made before him a detail submission. Ld. CIT(A) after considering the submission of assessee, partly allowed the appeal of assessee. 5. Aggrieved with the above order, assessee and revenue are in appeal before us. 6. With regard to disallowance u/s 14A of the Act, Ld. AR appearing on behalf of the assessee brought to our notice para 8 of AO and para 6.2 of order of Ld. CIT(A) and submitted before us that this ground is squarely covered by the order of Coordinate Bench of Hon ble ITAT in ITA 5594/Mum/2013 5476/Mum/2013 for AY 2010-11 in assessee s own case, which is reproduced below:- We have heard the counsels for both the parties on this ground and we have also perused the material placed on record as well as the orders passed by the revenue authorities. Since facts of the case are exactly similar to the A.Y. 2008-09 A.Y. 2009-10 for which we have already given our finding inorder of A.Y. 2008-09. Therefore, we hereby hold that in the case of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the investments were made out of such owned / interest free funds and not borrowed funds. In such a situation, no disallowance u/s 14A r.w.r. 8D (2) (ii) could be made. Ref: CIT v/s Reliance Utilities and Power Ltd. - [(2009) 313 ITR 340 (Bom)] and CIT v/s HDFC Bank Ltd. -[(2014) 366 ITR 0505 (Bom)] 3. Almost entire investments made by the Assessee are in subsidiary companies / group concerns with which the assessee had entered into joint venture / strategic alliance for strategic business purposes in order to promote the Assessee's business and also help the Assessee gain certain market share in the business so as to streamline the operations of the group as a whole. Neither the AO nor the CIT (A) have disputed these basic facts. Investments made in associates / subsidiaries for strategic business purposes cannot be considered for the purpose of disallowance u/s 14A read with Rule 8D. 4. Further the Assessee has not incurred any expenditure for earning exempt income since the entire dividend was received through ECS and hence no disallowance can be made for administrative expenditure. - Canara Bank v/s. ACIT - [(2014) 99 DTK 0036 (Kar)]: [(2015) 228 Taxman 0212 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investment as per rule 8D(2)(iii) of the rule, in applying the rules, he should consider only those investments which has actually earned dividend /exempt income. Then compare the both method of calculation and in order to apply provision of section 14A, he should consider the amount calculated above said two methods whichever is less. Accordingly, ground no. 1 raised by assessee is allowed for statistical purposes. 13. With regard to disallowance u/s 40(a)(ia) of the Act on account of non-deduction of TDS on credit card commission charged by bank on credit card transactions, Ld. AR appearing on behalf of the assessee brought to our notice para 7 of AO and para 6.3.2 of order of Ld. CIT(A) and submitted before us that this ground is squarely covered by the order of Coordinate Bench of Hon ble ITAT in ITA 5594/Mum/2013 5476/Mum/2013 for AY 2010-11 in assessee s own case, which is reproduced below:- We have heard the counsels for both the parties on this ground and we have also perused the material placed on record as well as the orders passed by the revenue authorities. At the outset, we find that the Assessee has correctly placed reliance on the decision of the co-ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinate Bench of ITAT in ITA No. 5594/Mum/2013 5476/Mum/2013 for AY 2010-11 and ITA No. 1826 1435/Mum/2015 for AY 2011-12 in assessee s own case. 17. Therefore, respectfully following the above decision of Coordinate Bench of ITAT in assessee s own case which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Accordingly, ground no. 2 to 3 filed by the revenue are dismissed. 18. With regard to addition of amount forfeited by assessee on share warrants u/s 43(5) of the Act, Ld. AR appearing on behalf of the assessee brought to our notice para 6 of AO and para 6.4.4 to 6.4.5 of order of Ld. CIT(A) and submitted before us that this ground is squarely covered by the order of Coordinate Bench of Hon ble ITAT in ITA 5594/Mum/2013 5476/Mum/2013 for AY 2010-11 in assessee s own case, which is reproduced below:- We have heard the counsels for both the parties on these grounds and we have also perused the material placed on record as well as the orders passed by the revenue authorities. Ld. DR relied upon the order of the AO. Whereas on the contrary Ld. AR submitted that the aforesaid amount received on the issue of optiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Petrochemicals Copn. Ltd. V/s. DCIT [(2009) 116 ITD 372 (Mum)] e. DCIT V/s. Brijlaxmi Leasing Finance Ltd. [(2009) 118 ITD 546 (Ahd)] f. Graviss Hospitality Ltd. V/s. Dy. CIT [(2015) 53 taxmann.com 63 (Mum Trib.)] g. Sunita Gupta Share Borkers Limited vs. ACIT in ITA No.4188/Del/2010 vide order dated 7.12.2011. The above case laws amply support the proposition that amount received as a capital receipt toward financial instruments like warrants, share capital etc. cannot be treated as revenue receipts. Since the assessee company is not in the business of selling of shares. It has been held in the judicial pronouncements that in the case of any such forfeiture made, the same cannot be taxed as a revenue receipt if this amount has been transferred to the capital reserve account in the balance sheet. In the present set of facts it is observed that the various facts related to issue of warrant part payment of the amounts by the investors, notice for forfeiture etc. have not been disputed by the Assessing Officer. The basic nature of the transaction relates to raising of capital through convertible warrants. The amount forfeited on account of non payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of JSW Ltd in ITA Nos. 6264 6103/Mum/2018 dated 14.5.2020, wherein this issue has been addressed in detail allowing time to pronounce the order beyond 90 days from the date of conclusion of hearing by excluding the days for which the lockdown announced by the Government was in force. The relevant observations of this tribunal in the said binding precedent are as under:- 7. However, before we part with the matter, we must deal with one procedural issue as well. While hearing of these appeals was concluded on 7th January 2020, this order thereon is being pronounced today on 14th day of May, 2020, much after the expiry of 90 days from the date of conclusion of hearing. We are also alive to the fact that rule 34(5) of the Income Tax Appellate Tribunal Rules 1963, which deals with pronouncement of orders, provides as follows: (5) The pronouncement may be in any of the following manners:- (a) The Bench may pronounce the order immediately upon the conclusion of the hearing. (b) In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date forpronouncement. (c ) In a case where no date of pronouncemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown . Hon ble Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed while calculating the time for disposal of matters made time- bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly . The extraordinary steps taken suomotu by Hon ble jurisdictional High Court and Hon ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words ordinarily , in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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