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TMI Blog2023 (5) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition made on account of disallowance u/s 14A of Rs.16,77,36,896/-." 3. The grounds of appeal taken by the assessee read as under :- "1. That the order passed by the CIT(A) upholding the additions made by the AO is illegal and bad in law and the additions sustained should be deleted. 2. That the AO and CIT(A) have erred in law and on facts in not providing a reasonable and adequate opportunity to the appellant to be heard. The orders are passed in gross violations of principles of natural justice. 3. That the CIT(A) has grossly erred on facts and in law in upholding addition of Rs.9,81,86,182/- made by the AO on account of foreign exchange. loss. The addition is illegal and bad in law and should be deleted. 4. That the CIT(A) has grossly erred in ignoring the important aspects of the case while upholding the addition of Rs.9,81,86,182/- on account of foreign exchange loss. 5. That the CIT(A) has grossly erred on facts and in law in sustaining the addition of Rs.57,66,026/- under See 14A. The addition of Rs.57,66,026/- sustained by the CIT(A) is illegal and bad in law and should be deleted. 6. That the AO and CIT(A) have grossly erred on facts and in law in invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of disallowances of depreciation on investment made in wind mills : At the outset, ld. Counsel of the assessee submitted that the same issue has been decided in favour of the assessee by this Tribunal in assessee's own case in ITA No.1268/Del/2015 for AY 2011- 12 vide order dated 14.03.2023. He submitted that facts are identical. Ld. DR for the Revenue could not dispute that the facts are not identical. 8. We find that this Tribunal has decided the identical issue in assessee's own case in AY 2011-12 vide order dated 14.03.2023 (supra). We may gainfully refer to the order of the ITAT in that case as under:- 7. We have considered the submission of the parties and perused the records. During the course of assessment proceedings, the Ld. AO raised a query and required the assessee to explain why the activity of power generation be not regarded as other than business activity of the assessee and depreciation etc. be disallowed. The assessee submitted a detailed reply dated 10.01.2014 which has been incorporated by the Ld. AO at pages 2-4 of his assessment order. It is observed that the assessee cited clause 24 of the objects incidental or ancillary to the attainment of the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% of employee cost and 5% of administrative cost. Thus, the findings given by the CIT (A) is just and proper. Therefore, Ground No. 1 is dismissed. As regards Ground No. 2, the details were submitted by the assessee during the assessment proceedings as per the reply/submissions dated 11.12.2012 which is mentioned on page 1 of the Assessment Order itself. There was no new evidence brought on record by the assessee and after the verification of the evidence the CIT(A) has rightly deleted the addition. In fact, the Assessing Officer has totally ignored the reply dated 11.12.2012 submitted by the Assessee. Thus, CIT(A) has given a categorical finding that the assets were owned by the assessee and were put to use for the purposes of its business during the year. Hence, there is no need to interfere with the detailed findings of the CIT(A). Hence, Ground No. 2 is dismissed. As regards Ground No.3, the assessee had borrowed funds which was used for business purposes and was paying interest on these funds and this fact was not controverted through any of the documents on the record by the Assessing Officer as well as by the Revenue at the time of hearing before us, Hence, the findings giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and in fact, the AO has totally ignored the reply dated 11th December, 2012, filed by the Assessee. 7. Consequently, both the appellate authorities below have recorded concurrent findings of fact on both the issues. Accordingly, this Court is of the view that no substantial question of law arises for consideration in the present appeal and the same is dismissed." 10. Following the order (supra) of the Tribunal and the judgment (supra) of the Hon'ble Delhi High Court in assessee's own case for AY 2010-11 on ITA No. 1268/Del/2015 6 both the issues involved in the present appeal of the Revenue, the facts and circumstances remaining the same, we reject both the grounds of the Revenue." 9. Following the precedent as above, we confirm the order of ld. CIT (A) regarding deletion of disallowance of depreciation on investment made on wind mills. 10. Apropos the issue of addition made on account of short deduction of TDS : The AO noted that the assessee had made payment for the services provided by Suzlon Energy Ltd. According to the AO, the services provided by Suzlon Energy Ltd. were in the nature of technical and professional services liable for deduction u/s 194J of the Act @ 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court, ld. CIT (A) directed the AO to limit the disallowance to RS.57.66 lakhs. 17. Against this order, Revenue and assessee are in cross appeals before us. We have heard both the parties and perused the records. 18. We find that ld. CIT (A)'s opinion is that Hon'ble Delhi High Court decision in the case of Joint Investment (P) Ltd. needs to be followed and disallowance be limited to exempt income which is correct. We do not find any infirmity in this. Hence, we affirm the decision of the ld. CIT (A) to the aforesaid extent. 19. As regards assessee's appeal on the same issue, ld. Counsel of the assessee submitted that * No satisfaction was recorded by the Ld. DCIT under section 14A (2) of the Act to reject the amount suo-moto computed and disallowed by the Appellant under section 14A of the Act. Reliance placed upon: i. Maxopp Investment Ltd (347 ITR 272) Delhi HC [Refer Para 42 on Page 20 of case law compilation binder]. ii. Consolidated Photo & Finvest Ltd. [2012] 25 taxmann.com 371 Delhi HC [Refer Page 24 of case law compilation binder] iii. Godrej and Boyce Mfg. co. ltd. Vs. DCIT [2010] 194 taxman 203 Bombay HC [Refer Page 28 of case law compilation binder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority for the general proposition that loss due to exchange rate fluctuation in respect of the value of ECBs is, as a rule, revenue expenditure to be allowed as deduction u/s. 37 (1) of the Act. 23. Upon assessee's appeal, ld. CIT (A) affirmed the order of AO. Ld. CIT (A)'s conclusion in this regard is as under :- " After going through the order of CIT (A) for AY 2013- 14, it is seen that it discusses all aspects along with the decision of Hon'ble Supreme Court in case of Indian Molasses Co. Pvt. Ltd. & in case of Woodward Governor (relied upon by the assessee). The facts being the same, in my opinion the ld. CIT (A) has rightly disallowed the notional loss on ECB liability and I follow the same. The disallowance of Rs.10.2194 crore is upheld. (vi) Further, there is income of Rs.40.07 lac offered by the assessee on derivative contracts. As held by Hon'ble Supreme Court, the same treatment as in loss should apply in case of gain also. It is therefore held that the loss/gain may be computed in year of final settlement. In case the transaction matured in FY 2011-12, the amount may be treated as speculation profit (following the order of Ld. CIT (A)-7 as to nature of transact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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