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TMI Blog2019 (7) TMI 2002X X X X Extracts X X X X X X X X Extracts X X X X ..... the exempt income only to the extent of 8.05 crores. Therefore, the ld.CIT(A) reasonable presumed that assessee has invested only own funds no borrowed funds. By considering the facts and circumstances of the case, we find that there is no error passed in the order passed by ld.CIT(A), in deleting addition - Decided in favour of assessee. Disallowance of commission in respect of turnover of earlier years - assessee has explained before the Assessing Officer that the commission expenditure accounted for as and when debit note is raised by the broker - HELD THAT:- On appeal, the ld.CIT(A) gave a finding that the expenses incurred by the AO is not doubted by the AO and only case of the AO is that these expenses relates to earlier years not related to current year. We find that the ld.CIT(A) after considering the detailed explanation given by the assessee and also observations made by the Assessing Officer gave a find that these expenses are genuine and has to allowed even in current year also. We find no reason to interfere with the order passed by the ld.CIT(A), therefore this ground raised by the Revenue is dismissed. Disallowance of welfare expenses - AO noted that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ER V. DURGA RAO, JUDICIAL MEMBER: 1. These two appeals by the assessee are directed against the order of learned Commissioner of Income Tax (Appeals)-1, Surat, dated 12.06.2017 for the Assessment Years 2013-14 and 2014-15. 2. In both these appeals, facts and circumstances are same. Therefore, these were heard together. First, we are taking the appeal of the Revenue for assessment year 2013-14. ITA No.102/SRT/2017 for A.Y. 2013-14: 3. Grounds raised by the Revenue in ITA No.102/SRT/2017 read as under : "1. Whether, on the facts and circumstances of case and in Laws, the Ld CIT(A) was justified in holding that deduction under section 80IA of Rs. 1,92,34,634/- should be allowed by ignoring the losses of eligible unit of years earlier to the initial year opted"? 2. Whether on the fact and the circumstance of the case and in law, the Ld.CIT(A) was justified in deleting the disallowance of Rs. 1,92,34,634/- in respect of 80IA of the I.T.Act without appreciating the fact that if all windmills were considered as one undertaking and profit and loss of all windwills are worked out after adjusting the losses from the profit of the units, the net result came to loss. 3. Whether on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s against income from business (other than eligible business) and in doing so the Assessing Officer has invoked the provisions of section 80IA(5) for Rs. 1,92,34,634/-. 5. On appeal, the ld.CIT(A) by following the decision of the assessees own case for earlier years in the A.Y. 2012-13 directed the Assessing Officer to allow the claim of the assessee u/s.80IA(5) of the Act. 6. On being aggrieved, the Revenue has carried the matter before the Tribunal. The ld.Departmental Representative has relied on the order passed by the Assessing Officer. The assessee strongly placed reliance on the orders of the CIT's and also assessee's own case for the A.Y. 2012-13 and also the decision of the Hon'ble Supreme Court in the case of ACIT vs. Velayudhaswamy Spinning Mills (P) Ltd., [2017] 244 taxman 58 (SC). 7. We have heard the both the parties and gone through the records and orders of the authorities below. The very same issue came up for consideration before the Hon'ble ITAT in the assessee's own case for A.Y. 2011-12 in ITA No. 1751/Ahd/2013 by order dated 23.10.2017 has considered the issue. The Tribunal by following the assessee's own case for A.Y. 2010-11 in ITA no. 1749 & 1750 of 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above disallowance given by the Assessing Officer as under : II A Financial Expenses 1,68,53,718/- B Average value of investment, income from which does not form part of total income, as appearing in the balance sheet of the Assessee, on the first day and last day of the previous year. 8,05,65,885/- C Average of total assets as appearing in the balance sheet of the Assessee, on the first day and the last day of the previous year. 13,69,98,49,110/- A x B C 1,68,53,718 x 8,058,65,88= 99,113/- 13,69,98,49,110 III Amount equal to half percent of the average value of investment, income from which does not form part of total income, as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year TOTAL 5,01,943/- 11. On appeal, the ld.CIT(A) gave a finding that the assessee is having a share capital + reserves of 436 crores as on 31.03.2013 as against investment in shares / securities generating exempt income was only 8.05 crores. The ld.CIT(A) further gave a finding that the assessee is having a owned funds to the tune of 436 crores. Therefore, it has to be presumed that own funds are used for making investment yielding to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained by the Assessing Officer for the reason that when the expenses approved at the time the company has to make a provision for expenses or debit the same in the books of accounts. However, the same was not done by the assessee, therefore entire incurred by the assessee was disallowed and added back to the total income of the assessee. 17. On appeal, the ld.CIT(A) gave a finding that the expenses incurred by the Assessing Officer is not doubted by the Assessing Officer and only case of the Assessing Officer is that these expenses relates to earlier years not related to current year. We find that the ld.CIT(A) after considering the detailed explanation given by the assessee and also observations made by the Assessing Officer gave a find that these expenses are genuine and has to allowed even in current year also. We find no reason to interfere with the order passed by the ld.CIT(A), therefore this ground raised by the Revenue is dismissed. 18. Ground No.5 relates to welfare expenses. In the assessment order the Assessing Officer has noted that the assessee has not fully vouched and some of the expenses were supported by the handmade vouchers not having complete address and na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed expenses are proper and genuine, looking into the volume of the work the Assessing Officer after considering the explanation of the assessee he has observed that in the absence of the complete details, evidences, genuineness of these expenses cannot be examined and some expenses are partly in personal nature which cannot be denied and the reply of the assessee is not convincing, not accepted. Accordingly, the Assessing Officer has disallowed 15% of these expenses which comes to Rs. 17,97,589/- and the same added back to the total income of the assessee. 28. On appeal, the ld.CIT(A) restricted the disallowance to 10% of such expenses and addition was confirmed to the extent of Rs. 11,58,039/- granted relief of Rs. 6,39,550/- partly allowed the ground raised by the assessee. 29. On appeal, before us, the ld.Departmental Representative(DR) relied on the order passed by the Assessing Officer and DR supported the orders passed by the Assessing Officer. 30. The learned Authorised Representative relied on the orders passed by the ld.CIT(A). 31. We have heard both the sides, we find that the Assessing Officer has disallowed an amount of Rs. 17,97,589/- on the ground that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to the notices the assessee has submitted that the expenses are proper and genuine, looking to the volume on the work. However, the Assessing Officer has not satisfied with the expenses given by the assessee he has disallowed 15% of the expenses which comes to Rs. 4,29,150/- the same is added to the total income of the assessee. 40. On appeal, the ld.CIT(A) has granted relief to the extent of Rs. 2,14,575/- and partly granted relief to the assessee. 41. We have heard both sides we find that the ld.CIT(A) by considering the entire business carried by the assessee and also by considering the nature of the expenses and also considering the expenses incurred in various places restricted the allowance to 50% granted relief to the extent of Rs. 2,14,575/-. We find that no reason to interfere with the order passed by the ld.CIT(A), therefore ground raised by the Revenue is dismissed. 42. Ground No.8 relates to disallowance on account of office expenses Rs. 12,51,000/-. In the assessment order the Assessing Officer has noted that the assessee claimed office expenses of Rs. 83,43,379/- in the Profit and Loss Account. 43. On perusal of the details of the expenses it is seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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