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TMI Blog2021 (10) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... correct in restricting the disallowance to such exempt income. 2] That on the facts and circumstances of the case, the Ld.CIT(A)-4, Kolkata erred in holding that Rs. 6,lS,27,170/-, being payment of premium on redemption of FCCB and claimed by the appellant is allowable expenses subject to disallowance u/s 43A of the Act, whereas FCCB issue proceeds were utilized towards funding of capital expenditure and related issue expenses and it was also observed that no such provision had been made in the Profit and Loss Accounts. 3] That on the facts and circumstances of the case, the Ld.CIT(A)-4, Kolkata erred in holding that the sum of Rs.S9,91,093/- from Renukoot unit claimed as bad debts written off may be taken into consideration in calculation of net worth of Renukoot unit when the unit was already transferred through slump sale. 4] That the appellant craves to add, delete or modify any of the grounds of appeal before or at the time of hearing. Ground no. 1 : 4. The department through ground no. 1 has contested the action of the Ld. CIT(A) in deleting the disallowance made by the Learned Assessing Officer ( in short, the Ld. AO) u/s. 14A of the Income-tax Act, 1961 (hereinafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses. 8. Before us, the Learned Counsel for the assessee has relied upon the provisions of section 36(1) (iii) of the Act and submitted that the amount of interest paid in respect of capital borrowed for the purpose of the business or profession is allowable as deduction. He has further drawn our attention to the relevant part of the assessment order and submitted that the Ld. AO has also mentioned that the assessee has paid premium on the capital borrowed by issuance of FCCBonds, which was in the nature of interest paid. He has further submitted that the Ld. AO has disallowed the aforesaid interest/premium only on the ground that the assessee has not routed the said expenditure through P & L account. The Ld. Counsel in this respect has submitted that it has been held time and again that irrespective of the accounting entries, the allowability of the claim is to be examined as per provisions of the Income Tax Act. The Learned Counsel for the assessee in this respect has also relied on the decision of the Co-ordinate Bench in the own case of the assessee dt. 16-11-2018 in ITA No. 1880/Kol/2014 & Ors. 9. We have head the Ld. DR on this issue. The Ld. DR has fairly admitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/Kol/2018 for the A.Y 2012-13. 13. The assessee in this appeal (ITA No.2184/Kol/2018 for the AY 2012-13) has taken also following grounds:- 1. For that in view of the facts and in the circumstances, the Ld CIT(A) erred in affirming the action of the AO in not allowing the claim as bad debt written off amounting to Rs. 59,91,093/- and in view of the facts and in the circumstances it may kindly be held accordingly. 2. Without prejudice to Ground No. 1, above, the Ld CIT(A) erred in not appreciating the, fact that the sum of Rs. 59,91,093/- was considered as income in the preceding years and hence it is allowable as bad debts being written off and in view of the facts and in the circumstances it may kindly be held accordingly. 3. For that in view of the facts and in the circumstances, the Ld CIT(A) failed to appreciate the fact that the Capital Gain so offered by the appellant in respect of the slump sale under section 50B of the "Renukoot Unit" needs to be recomputed due to the adjustments in the costs of the corresponding Plant & Machinery of such unit in Assessment years 2008-09 to 2011-12 and in view of the facts and in the circumstances it may kindly be held accordingly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground that there has been no material change in the provisions of section 10(4) of the Old Act and Section 40(a)(ii) of the new Act. 2. The view of the Income Tax Officer is not correct. Clause 40(a)(ii) of the Income Tax Bill, 1961 as introduced in the Parliament stood as under:- "(ii) any sum paid on account of any cess, rate or tax levied on the profits or gains of any business or profession or assessed at a proportion ot, or otherwise on the basis of, any such profits or gains". When the matter came up before the Select Committee, it was decided to 'omit the word 'cess' from the clause. The effect of the omission of the word 'cess' is that only taxes paid are to be disallowed in the assessments for the years 1962-63 and onwards. - 3. The Board desire that the changed position may please be brought to the notice of all the Income Tax Officers so that further litigation on this account may be avoided.{Board's F . No.91/5B/66-ITJ(19), dated 18-5-1967. 18. The Learned Counsel for the assessee in this respect has further relied upon the decision of the Hon'ble Bombay High Court in the case of "Sesa Goa Limited Vs. JCIT" (2020) 117 taxmann.com 96 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent rates which may be described as (i) the basic charge or rate (In part I of the First Schedule); (ii) Sur- charge; (iii) special surcharge and (iv) additional surcharge calculated in the manner provided in the Schedule. Read in this way the additional charges form a part of the income tax and super tax". 21. The Hon'ble Supreme Court, therefore, has decided the issue in favour of the revenue and held that surcharge and additional surcharge are part of the income-tax. At this stage, it is pertinent to mention here that 'education cess' was brought in for the first time by the Finance Act, 2004, wherein it was mentioned as under:- " An additional surcharge, to be called the Education Cess to finance the Government's commitment to universalise quality basic education, is proposed to be levied at the rate of two per cent on the amount of tax deducted or advance tax paid, inclusive of surcharge." 22. The provisions of the Finance Act 2011 relevant to the Assessment Year under consideration i.e. 2012-13 are also relevant. For the sake of ready reference, the same is reproduced hereunder:- 2(11) The amount of income-tax as specified in sub-sections (1) to (10) and as increase ..... X X X X Extracts X X X X X X X X Extracts X X X X
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