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TMI Blog2021 (5) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... to the exempt income of the assessee in case the disallowance exceeds the exempt income while computing the same as per direction of the coordinate Bench given in assessee s case for the assessment year 2010-11 discussed above. We therefore do not find any merit in the first ground of appeal of the revenue. Claim filled during assessment proceedings - Additional depreciation during the assessment proceedings - As per DR since the assessee had not claimed carry forward of additional depreciation in its return of income, there is no provision under the Income Tax Act to make amendment in the return of income at the assessment stage without revising the return - HELD THAT:- As in the case of Budhewal Cooperative Sugar Mills Ltd. [ 2009 (5) TMI 63 - PUNJAB AND HARYANA HIGH COURT] following the ratio laid down by the Hon ble Jurisdictional High Court in the case of CIT vs Ramco International [ 2008 (12) TMI 413 - PUNJAB AND HARYANA HIGH COURT] allowed the identical claim of the assessee made on the basis of a letter filed after the last date on which the revised return could have been filed u/s 139 (5) and not filing revised return. - Decided against revenue. Non application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 41,22,58,328/- under the normal provisions and Rs. 55,39,18,266/- under section 115JB of the Act. Later on, the assessee revised its return and declared its income at Rs. 40,78,82,513/- The case was selected for scrutiny and the AO passed assessment order u/s 143(3) of the Act determining the total income of the assessee at Rs. 43,26,29,567/- under the normal provisions after making addition of Rs. 1,27,78,174/- on account of disallowance u/s 14A of the Act read with rule 8D of the Income Tax Rules, addition of Rs.29,49,499/-on account of disallowance u/s 36(1)(iii), addition of Rs. 41,96,383/- on account of disallowance u/s 36(1)(iii) proviso and addition of Rs. 48,23,000/- on account of disallowance of carbon credits. Further, the AO determined the income of the assessee and section 115JB at Rs.57,15,19,440/- after making addition of Rs. 1,27,78,174/- on account of disallowance u/s 14A read with Rule 8D and addition of Rs. 48,23,000/- on account of carbon credits disallowance. The assessee challenged the assessment order before the ld. CIT(A). The ld. CIT(A) after hearing the assessee partly allowed the appeal of the assessee. The ld. CIT(A) restricted the disallowance u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing effective grounds: - 1. a) That the worthy CIT(A)-3, Ludhiana erred in law and on facts in upholding the applicability of rule 8D in spite of fact that the appellant itself computed the disallowance on proportionate basis u/s 14A of the Act. Directions may be given to compute the disallowance u/s 14A on proportionate basis as held in appellant own case in Assessment Year 2010-11. b) Without prejudice in alternative, Worthy CIT(A)-3, Ludhiana, i) further erred in law and on facts in not giving directions to compute the disallowance by taking the average total investment on which the dividend exempt income accrued instead of total average investments. Directions be given to compute the disallowance by considering only those investments on which exempt income is earned, as held by Hon'ble ITAT Special Bench in Vireet Investment Ltd...165 ITD 0027 (SB). ii) further erred in law and on facts in not giving directions to compute the disallowance u/s 14A read with rule 8D, by excluding interest paid on term loan of Rs 17,44,95,000/-, interest on working capital loan of Rs 14,16 44,000/- as well as other borrowing cost of Rs. 15,31, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 37/Chd/2015 for the assessment year 2010-11, wherein the Tribunal has restricted the disallowance to Rs. 9,36,183/- computed by the assessee on proportionate basis as against the addition of Rs. 1,18,64,346/- made by the AO. The Ld. Counsel further submitted that in the present case, the assessee has submitted working of disallowance on proportionate basis computed in accordance with the order of the jurisdictional Tribunal rendered in assessee s appeal for the assessment year 2010-11, as per which the disallowance for the assessment year under consideration comes to Rs. 3,10,650/-. The Ld. Counsel accordingly submitted that since the action of the Ld. CIT(A) is not in accordance with the decision of the Tribunal, the same is liable to bet aside. Without prejudice, the Ld. Counsel submitted that the disallowance may be computed by taking average investment on which dividend income accrued instead of average of total investment. The Ld. Counsel relied on the decision of the special Bench of the Delhi Tribunal in the case of ACIT vs. Vireet Investment Ltd. ITA No. 165 ITD 27 (Spl. Bench), decisions of the Chandigarh Bench of the Tribunal in the case of Ramtech Software Solutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT(A) did not agree with the above contention of the assessee and upheld the disallowance made by the Assessing Officer. 5. Before us, the Ld. Counsel for the assessee has submitted a chart to show that the assessee was having sufficient interest free own funds in the shape of capital, reserves surplus and cash accrual to meet the investments in question. A perusal of the said chart revels that the total capital reserves and surplus of the assessee during the financial year under consideration 2009-10 were at Rs. 19405.71 lacs and the total cash accruals of the assessee during the year were at Rs. 11071.90 lacs. The total investment during the year including the own old investments were only at Rs. 5809.29 lacs, which shows that the own / interest free funds of the assessee were sufficient to meet the investments. The issue is, thus, covered by the various decisions of the Hon'ble High Courts including that of the Hon'ble Jurisdictional High Court in Bright Enterprises Ltd vs CIT (ITA No. 224 of 2013) dated 24.7.2015, wherein, it has been held that if assessee has funds / interest free funds available with it to make investment, the presumption will be th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for earning of tax-exempt income. The Assessing Officer in this respect has not recorded any dissatisfaction taking into consideration the accounts of the assessee. The Hon'ble Bombay High Court in the case of Godrej Boyce Manufacturing Co. 328 ITR 81 has held that under section 14A of the Act, resort can be made to Rule 8D of the Income Tax Rules for determining the amount of expenditure in relation to exempt income, if, the AO is not satisfied with the correctness of the claim made by the assessee in respect of such expenditure. The satisfaction of the Assessing Officer has to be arrived at, having regard to the accounts of the assessee. Sub section (2) does not ipso facto enable the Assessing Officer to apply the method prescribed by the rules straightaway without considering whether the claim made by the assessee in respect of such expenditure is correct. The satisfaction of the Assessing Officer must be arrived at on an objective basis. In a situation where the accounts of the assessee furnish an objective basis for the Assessing Officer to arrive at a satisfaction in regard to the correctness of the claim of the assessee, there would be no warrant for taking recour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was that it had sufficient own interest free funds to meet the investment in question. Contention of the assessee in respect of disallowance under Rule 8D(iii) was that it had not incurred any administrative expenses for earning exempt income. Since the AO had not recorded any dissatisfaction taking into consideration the accounts of the assessee, the coordinate Bench directed the AO to restrict the disallowance to the proportionate amount computed by the assessee after including the personal expenditure and certain other expenses. The contention of the Ld. Counsel is that there is no change in the facts of the present case and the assessee has submitted the working in this case in accordance with the order passed by the Tribunal in asssessee s own case for the assessment year 2010-11. 10. The Ld. DR did not controvert the contention of the Ld. Counsel that there is no material change in the facts of the present case. During the course of arguments, the Ld. DR submitted that even if the disallowance is to be computed as per the order of the Tribunal rendered in assessee s appeal for the assessment year 2010-11, the working submitted by the assessee cannot be accepted as cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no provision under the Income Tax Act to make amendment in the return of income at the assessment stage without revising the return. The Ld. DR relied on the judgement of the Hon ble Supreme Court in the case of Goetze (India) Ltd. Vs CIT 284 ITR 323 to substantiate his contention. 12. On the other hand, the Ld. counsel for the assessee submitted that this issue is covered in favour of the assessee by the decisions of Chandigarh Bench of the Tribunal in the case of ACIT Vs Budhewal Cooperative Society Ltd, ITA No. 1077/Chd/2012 and the judgement of the Hon ble Punjab Haryana High Court in the case of CIT Vs Ramco International 332 ITR 306 (P H). Since, the Ld. CIT(A) has decided this issue in favour of the assessee by following the decision of the Tribunal and the ratio laid down by the Hon ble jurisdictional High Court, there is no merit in the contention of the Revenue. 13. We have perused the material on record including the cases relied upon by the Ld. Counsel for the assessee. As pointed out by the Ld. Counsel, the coordinate Bench in the case of Budhewal Cooperative Sugar Mills Ltd. Vs ACIT (supra) following the ratio laid down by the Hon ble Jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. However, the claim of the assessee was rejected as the assessee had failed to furnish a revised return of income in respect of the said claim of deduction. 10. The case of the assessee before us is that the revised claim of deduction was made before the CIT (Appeals) also and the same should have been entertained in view of the settled position of law. The claim by way of letter dated 15.12.2004 was rejected by the authorities below in view of the ratio laid down by the Hon'ble Supreme Court in Goetze (India) Limited Vs. CIT (Supra) wherein it has been laid down that any claim made otherwise than in the return of income or the revised return of income cannot be entertained by the Assessing Officer. However, the plea of the assessee is that it had made the said claim even before the CIT (Appeals) as the issue had been settled in favour of the assessee b y t h e Larger Bench of the Hon'ble Punjab Haryana High Court in assessee's own case reported in 315 ITR 351(P H) and the same should have been allowed by the CIT(Appeals). 11. We find that the Hon'ble Punjab Haryana High Court in CIT Vs. Ramco International (supra) allowed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied and adjudicated on case-to-case basis. It depends on the type of product which ultimately emerges from a given operation. In our view, this aspect has not been examined by the Courts below. The matter was set aside to the file of the CIT (Appeals) with directions to decide and ascertain whether the operation undertaken by the assessee was or was not manufacture. In view of our admitting the claim of the assessee vis-a-vis deduction under section 80P(2)(a)(iii) of the Act and following the ratio laid down by the Hon'ble Supreme Court in assessee's own case, we remit the present issue also back to the file of the CIT (Appeals) to decide the issue in line with the directions of the Hon'ble Apex Court. The ground No.2 raised by the assessee is allowed for statistical purposes. 14. The Ld. CIT(A) has decided this ground of appeal in favour of the assessee by following the decision of the coordinate Bench in the case of Budhewal Cooperative society Ltd. (supra) and the other cases relied upon by the assessee. In our considered view, the findings of the Ld. CIT(A) are based on the decision of the coordinate Bench discussed above. We further notice that the case la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee by the decision of the Chandigarh Tribunal in assessee s own case ITA No. 1122/Chd/2014 for the AY 2010-11. 19. On the other hand, the Ld. CIT(A) admitted that the Chandigarh Bench decided the identical issue in favour of the assessee in its own case for the AY 2010-11. 20. We have perused the material on record. We notice that the Coordinate Bench has already decided the identical issue in favour of the assessee in assessee s own case for the AY 2010-11 by following the decision of the coordinate Bench in ITA No. 389/Chd/2013 in the case of DCIT Vs Kotla Hydro Power Pvt Ltd. Since the findings of the Ld. CIT(A) are based on the decision of the coordinate Bench, we do not find any reason to interfere with the findings of the Ld. CIT(A). Accordingly, we uphold the findings of the Ld CIT(A) and dismiss this ground of appeal of the Revenue. ITA No. 1211/Chd/2019 AY 2013-14 The facts of the present case are identical to the facts of the assessee s case for the AY 2012-13, decided above except the amount the additions made by the AO. Further, the issues raised by the parties are common in both the cases. Hence, we do not consider it necessary nar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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