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TMI Blog2023 (12) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AO and subsequently the order of the AO was also upheld by the learned CIT-A. Against the finding of the learned CIT-A, the assessee did not challenge the same before the higher forum. Thus, the finding of the learned CIT-A reached the finality. Now, the controversy arises whether the issue relating to the depreciation can be raised by the assessee in the subsequent year without challenging the initial/ first assessment year as discussed above. The answer stands against the assessee. In simple words, the assessee in its own case has admitted the disallowance of depreciation and therefore the same cannot be agitated in the later years. Hence, the ground of appeal of the assessee is hereby dismissed. Disallowance of deprecation claimed on right to use leasehold land - assessee has been allotted land on lease basis by the Gujarat Maritime Board (GMB). The assessee accounted for the right to use leasehold land in the A.Y. 2011-12 at present value of future annual lease and claimed depreciation on the same @ 25% by treating the same as intangible assets - HELD THAT:- It is pertinent to note that the recognition of the right to use lease hold land as intangible asset as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered which yielded exempted income during the year. Thus amount of disallowance under rule 8D(2)(iii) shall be computed only considering the investment in Kutch Railways Company Ltd of which average value stand at Rs. 4000 Lacs only and accordingly the amount of disallowance shall be at Rs. 20 Lacs only whereas the assessee has already made disallowances of Rs. 25 lacs. Therefore no further disallowance is required to be made - appeal of the assessee allowed. Addition to book profit computed u/s 115JB - We hold that the disallowances made under the provisions of Sec. 14A r.w.r. 8D of the IT Rules, cannot be applied to the provision of Sec. 115JB of the Act as per the direction of Jayshree Tea Industries Ltd. [ 2014 (11) TMI 1169 - CALCUTTA HIGH COURT] Determine the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently - There is no mechanism/ manner given under clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/ determine the expenses with respect to the exempted income. Therefore, we feel that adhoc disallowance will serve the justice to the Revenue and assessee to avoid the multiplicity of the proceedings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and therefore the same has to be benchmarked at the arm length price. We find that in the case of PCIT vs. Redington (India) Ltd. [ 2020 (12) TMI 516 - MADRAS HIGH COURT] has held that corporate guarantee is covered under the limb of international transaction and having bearing on profit and loss account. Thus we hold that the bank/corporate guarantee extended to AE is an international transaction. Therefore, the same has to be bench marked for determining the ALP. Determine the benchmarking for working out the ALP of the impugned international transaction - Coming to the case on hand, we note that assessee has borrowed loan from the Standard Chartered bank at an effective rate of interest at 4.06% per annum whereas the AE has borrowed loan at the rate of 4.92% per annum despite the corporate guarantee furnished by the assessee The assessee has not obtained any saving of the interest/bank charges. Accordingly, the question arises, whether the assessee should be made subject to the addition for the corporate guarantee furnished by it in the given facts and circumstances. To our understanding, on applying the interest saving approach, it is not justifiable to make an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter of assessment order passed under s. 143(3) r.w.s. 144C of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Years as mentioned in the cause title. First, we take up ITA No. 319/AHD/2020, an appeal by the assessee for AY 2012-13 2. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding disallowance of depreciation for Rs. 6,77,38,601 in respect of land development expenditure incurred on leasehold lands towards reclamation of land by the appellant on merits of the case. The CIT(A) has allowed technical ground of Appellant for entitlement of increased deduction u/s 801AB of the Act on such disallowance and he ought to have also decided the issue on merits in favour of appellant. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding disallowance of depreciation of Rs. 1,12,29,956 claimed by the appellant-company on right to use leasehold land , being intangible asset eligible for grant of depreciation u/s 32 of the I.T. Act on merits of the case. The CIT(A) has allowed technical ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for same expenditure in different years. The AO further found that the amortization of expenses under section 35D of the Act is only available for expense incurred before incorporation or set up of new industrial unit after incorporation but in the case of the assessee, the conditions were not fulfilled. The AO also noted that the assessee on one hand is treating the impugned expenditure incurred on infrastructure facility and therefore, the same should be treated as building for the purpose of depreciation but chooses to claim the same as amortization for Rs. 6,77,38,601/- only. Hence, the AO disallowed the claim of the assessee and added to the total income. 5. The aggrieved assessee preferred an appeal before the learned CIT(A). The learned CIT(A) after considering the facts in totality confirmed the disallowance made by the AO by observing as under: I have carefully considered the Assessment Order and the submission filed by the Appellant. It is observed that identical disallowance was made in the case of the appellant for A.Y 2010-11 wherein CIT(Appeals)-6 on identical facts vide order dated 13th November, 2014 has confirmed the disallowance on the ground that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation on land property. The AO further held that the assessee is also not eligible to claim depreciation by treating such leasehold land as intangible asset for the reason that the granting some types of ownership over the land cannot be equated with the phrase Business or Commercial right used under section 32(1)(ii) of the Act. Accordingly, the AO disallowed the claim of the depreciation on right to use leasehold land. 10. On appeal by the assessee, the learned CIT(A) confirmed the disallowance made by the AO by following the order of his predecessor in the own case of the assessee for AY 2011-12. 11. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 11.1 The learned AR for the assessee before us submitted that the issue has been decided in favour of the assessee by the ITAT in its own case in ITA No. 122 167/AHD/2015 for AY 2011-12. 11.2 On the other hand, the learned DR vehemently supported the order of the lower authorities. 12. We have heard the rival contentions of both the parties and perused the materials available on the record. At the outset, we find the issue has been decided in favour of the assessee by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provision of section 115JB of the Act by the amount disallowed u/s 14A of the Act. 15. The aggrieved assessee preferred an appeal before the learned CIT(A) who restricted the disallowance to the extent of exempted income. The learned CIT(A) further directed the AO to increase the amount of eligible profit under section 80IAB of the Act by the amount of disallowance made u/s 14A of the Act. The learned CIT(A) regarding the addition to the book profit held that the amount calculated u/s 14A of the Act cannot be the subject matter of addition to book profit under u/s 115JB of the Act. 16. Being aggrieved by the order the learned CIT(A) both the assessee and the revenue are in appeal before us. The assessee is in appeal against the confirmation of disallowances to the extent of Rs. 1.75 crores. On the other hand, the revenue is in appeal against reduction of disallowances to the extent of exempted income as well as deletion of addition to the book profit under section 115JB of the Act. The relevant ground of revenue s appeal in ITA No. 335/AHD/2020 reads as under: 4. The ld. CIT(A) has erred in law and facts in restricting the section 14A disallowance of Rs. 14,58,94, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt funds for making the investments and it had not used the borrowed funds for such purpose. This aspect of huge surplus funds is not disputed by the revenue which earned it the interest on bonds and dividend income. [Para 7] 17.2 In the case of the present assessee, the interest free fund of the assessee exceeds the amount of the investment yielding the exempted income. Therefore, no disallowance can be made on account of interest expenditure under the provision of rule 8D IT rule in the given facts and circumstances. 17.3 Coming to the issue of disallowance of administrative expenses, in our considered opinion, the contention of the assessee cannot be accepted that no expenditure in relation to the investment was incurred. Therefore, the disallowance of administrative as per rule 8D of the Income Tax Rule needs to be made. As per the provision of rule 8D(2)(iii) the amount of administrative expense shall be equal to 0.5% of average value of the investment, income from which does not or shall not form part of total income. Now, the question arises while computing the average value of investment whether all the investment capable of yielding exempted income shall be consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the disallowance made under section 14A r.w.r. 8D cannot be resorted while determining the expenses as mentioned under clause (f) to explanation 1 to section 115JB of the Act. 17.7 However, it is also clear that disallowance needs to be made with respect to the exempted income in terms of the provisions of clause (f) to section 115JB of the Act while determining the book profit. In holding so, we draw support from the judgment of Hon ble Calcutta High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. in GO No.1501 of 2014 (ITAT No.47 of 2014) dated 19.11.14 wherein it was held that the disallowance regarding the exempted income needs to be made as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. The relevant extract of the judgment is reproduced below: We find computation of the amount of expenditure relatable to exempted income of the assessee must be made since the assessee has not claimed such expenditure to be Nil. Such computation must be made by applying clause (f) of Explanation 1 under section 115JB of the Act. We remand the matter for such computation to be made by the learned Tribunal. We accept the submission of Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and facts in restricting the section 14A disallowance of Rs. 14,58,94,441/- to Rs. 1,75,00,000/- under the general provisions. 5) The ld. CIT(A) has erred in law and facts in deleting the S. 115JB adjustment of Rs. 14,58,94,441/-. 6) The ld. CIT(A) has erred in law and facts in deleting the depreciation disallowance of Rs. 34,54,256/-. 7) The ld. CIT(A) has erred in law and facts in holding that the Corporate Guarantee is not an international transaction and in deleting the upward adjustment of Rs. 4,75,74,829/- made by the TPO. 8) It is, therefore, prayed that the order of ld. CIT(A) may be set aside and that of the Assessing Officer be restored. 20. The first issue raised by the Revenue is that the learned CIT(A) erred in allowing the deduction u/s 80IAB of the Act on account of sale of scrap for Rs. 1,75,46,556/- only. 21. The AO during the assessment proceedings found that the assessee in the profit eligible for deduction under section 80IAB of the Act has included receipt on account of sale of scrap for Rs. 1,75,46,556/- which mainly consist replaced parts, unusable consumables generated due to defects etc. The AO further found that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tfully following the order of the tribunal in the own case of the assessee as discussed above, we do not find any infirmity in the finding of the learned CIT(A) and direct the AO to delete the disallowance made by him. Thus, the ground of appeal raised by the revenue is hereby dismissed. 25. The next issue raised by the Revenue vide ground 2 3 is that the learned CIT(A) erred in holding the gain on foreign currency derivative swap as eligible income under section 80IAB of the Act and further erred in holding derivative swap loss of 54,48,34,433/- as business loss. 26. The assessee, to hedge its interest cost as well as foreign currency exposure, earned/ realized gain on foreign currency swap of Rs. 9,60,24,519/- and further incurred unrealized loss of Rs. 54,48,34,433/- on derivative/foreign currency swap on mark to market basis. Accordingly, the assessee claimed net loss on Derivative/swap contract at Rs. 44,88,09,924/- while computing the eligible profit under section 80IAB of the Act. However, the AO held the gain of Rs. 9,60,24,519 was not derived from the Activity of development of SEZ, hence the same is not eligible for deduction under section 80IAB of the Act. Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t being in respect of circulating/working capital was to be allowed under section 37(1) - Held, yes [Para 4.6] [In favour of assessee] s The above decision was rendered by Hon'ble Ahmedabad ITAT after the decision of my predecessor CIT (Appeals) and facts of the year under consideration continue to remain the same. The disallowance made by AO for Rs. 54,48,34,443/- treating currency swap loss as speculation loss is hereby deleted. 6.7 So far as disallowance of deduction of swap gain under Section 80IAB is concerned, my predecessor CIT (Appeals) has already decided in favour of Assessee. In addition to above, during the course of appellate hearing, ARs of the appellant have relied upon decision of Hon'ble Bombay High Court in the case of PCIT V/s Jindal Drugs Limited [2019] 101 taxmann.com 316, wherein it is held as under: Section 80-IB of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings other than infrastructure development undertakings (Computation of deduction) -Assessment year 2006-07 - Assessee company was engaged in business of manufacturing L-Menthol - Main raw material for said product was an agro-based produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted the settled position that the disallowances made under Sections 32, 40(a)(ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, the deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance................... It is also found that similar disallowance is made in the case of appellant for A.Y. 2013-14 wherein AO himself after relying upon above Circular has allowed higher deduction under Section 80IAB in assessment order dated 16th December, 2016. Even on this ground appellant is entitled for relief as claimed as alternate contention in its written submission. 6.9 In view of detailed discussion made herein above, both the disallowance made by AO are deleted and the related grounds are, thus, allowed. 28. Being aggrieved by the order of the learned CIT(A), the revenue is in appeal before us 28.1 The learned DR before us vehemently supported the order of the AO. 28.2 On the other hand, the learned AR submitted that the issue on hand covered by the order th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act to the extent of exempted income only and further erred in deleting the addition made to the book profit u/s 115JB of the Act. 31. At the outset, we note that the issue raised by revenue in the captioned ground of appeal has been adjudicated along with assessee s ground of appeal raised in ITA No. 319/AHD/2020. We, vide paragraph No. 17 of this order, decided the issue of disallowance under section 14A of the Act against the Revenue whereas issue of addition to book profit under section 115JB of the Act has been partly allowed in favour of the Revenue. For detailed discussion, please refer to the aforementioned paragraph of this order. Hence the ground of appeal raised by the revenue is hereby partly allowed. 32. The next issue raised by the Revenue vide ground No. 6 of its appeal is that the learned CIT(A) erred in deleting the disallowances of depreciation for Rs. 34,54,256/-. 33. The assessee on the block of assets, namely office equipment, claimed depreciation @ 15% on the WDV. The assessee in support submitted that the block office equipment includes assets such as Dome Camera, AC, Radar, CT2 Net Crain connectivity, Binocular etc which were installed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by him. Thus, the ground of appeal raised by the revenue is hereby dismissed. 37. The last issue raised by the Revenue is that the learned CIT(A) erred in holding the corporate guarantee as not an international transaction. 38. The assessee had extended corporate guarantees in respect of borrowings made by its associated enterprise, namely Mundra Port Holding PTY Ltd for USD 800 Million and AUD 51.752 million. The assessee did not charge any consideration from its AE for the issuance of corporate guarantees. During the course of ascertaining the Arm Length Price of impugned guarantee transaction, the TPO was of the view that a reasonable guarantee commission ought to have been charged in respect of issuance of such guarantee. The argument of the assessee to this effect that it does not constitute an international transaction was rejected by the TPO. As such the TPO found that the assessee in extending such guarantee has incurred cost of Rs. 19,26,10,644/- (service fee charged by SBI Ahmedabad @ 1.3%) which later was reimbursed by the AE to the assessee. Thus, the TPO worked out the Arm s Length Price of the corporate guarantee commission at Rs. 4,75,74,829/- based on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of section 92B of the Act define the parameters of what constitute an international transaction. Although, the ambit of international transaction was wide enough, yet due to judicial interpretation, certain classes of transactions were being left out of the transfer pricing net. To tackle the same, by the Finance Act of 2012 an Explanation to Section 92B[2] of the Act was brought in the statute with retrospective effect from 1st April 2002. The explanation is clarificatory in nature and added certain categories of transactions, inter alia, the transaction as specified under clause (c) of explanation (i) to section 92B of the Act within the ambit of international transactions which is reproduced as under: [ Explanation. For the removal of doubts, it is hereby clarified that (i) the expression international transaction shall include (a) *********** (b) ************* (c) capital financing, including any type of long-term or short-term borrowing, lending or guarantee, purchase or sale of marketable securities or any type of advance, payments or deferred payment or receivable or any other debt arising during the course of business; 41.1 The corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that may be a reason that Finance provider insist on non-charging any commission from Associated Enterprise as a commercial principle. Further, it has been observed that his position indicates that provision of guarantee always involves risk and there is a service provided to the Associate enterprise in increasing its creditworthiness in obtaining loans in the market, be from Financial institutions or from others. There may not be immediate charge on profit loss account, but inherent risk cannot be ruled out in providing guarantees. U1 and adjustment are to be made on guarantee commissions on such guarantees provided by the Bank directly and also on the guarantee provided to the erstwhile shareholders for assuring the payment of Associate Enterprise. In the light of the above decisions, the Tribunal committed an error in deleting the additions made against Corporate and Bank Guarantee and the order passed by the DRP is to be restored. [Para 76] 41.3 Thus, in view of the above, we hold that the bank/corporate guarantee extended to AE is an international transaction. Therefore, the same has to be bench marked for determining the ALP. Thus, the issue involved on hand i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e corporate guarantee fee rates, cost of providing the guarantee or any other approach, depending upon the facts and circumstances of each case. 41.6 Coming to the case on hand, we note that assessee has borrowed loan from the Standard Chartered bank at an effective rate of interest at 4.06% per annum whereas the AE has borrowed loan at the rate of 4.92% per annum despite the corporate guarantee furnished by the assessee. The finding to this effect of the ld. CIT-A reads as follows: 12.9 It is further observed that during the course of TP Proceedings, appellant has provided internal CUP and proved that appellant is procuring loan from Standard Chartered Bank @ 4.6% whereas cost of loan obtained by AE is @ 4.92% which also proves beyond doubt that by providing corporate guarantee, no benefit is at all accrued to AE. The appellant has also provided external data regarding borrowings availed of by corporates in Australia using Bloomberg Data Base as MPPL being AE is domicile in Australia. The entire comparative data was provided to TPO and appellant has narrowed down its search to one company being BHP Billiton Finance USA Limited who has borrowed 750 million USD (size of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny on right to use leasehold land , being intangible asset eligible for grant of depreciation u/s. 32 of the I.T. Act on merits of the case. 4. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding addition of transfer pricing adjustment of Rs. 1,21,744/- for benchmarking of interest. 5. On the facts and in the circumstances of the case, the Education Cess and the Secondary and Higher Education Cess is allowable business expenditure u/s 37(1) of the Act and cannot be considered as disallowable expenditure u/s 40(a)(ii) of the Income-tax Act, 1961. The AO may be directed to allow such expenditure while computing taxable income in the case of appellant. 6. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 44. The first issue raised by the assessee is that the learned CIT(A) erred in sustaining to addition under section 14A of the Act for Rs. 5.28 crores. 45. At the outset, we note the issue raised by the assessee is identical to the issue raised by the assessee as well as by the revenue in cross appeal for A.Y. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /AHD/2020 for the assessment year 2012-13. Therefore, the findings given in ITA No. 319/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2013-14. The appeal of the assessee for the assessment 2012-13 has been decided by us vide paragraph No. 12 of this order in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2013-14. Hence, the ground of appeal filed by the assessee is hereby allowed. 50. The next issue raised by the assessee is that the learned CIT(A) erred in confirming the upward adjustment in TP on account of interest for Rs. 1,21,744/- only. 51. The assessee has provided interest free loan to its AE namely Mundra Port Pty. Ltd (Australia) for Rs. 60,32,07,740/- only. In the TP report, the assessee benchmarked the interest at 6 months LIBOR + 280 basis and accordingly offered income of Rs. 3,59,876/- only. As such, the assessee benchmarked the interest amount in accordance with internal cup being rate of interest charged by the SBI for loan directly given to the AE. 51.1 However, the TPO found that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come hence contention of appellant that loan is in the nature of quasi equity and quasi capital loan and no adjustment is required to be made cannot be accepted. 11.4 The appellant has also referred to decision of Hon'ble Mumbai ITAT in the case of Hinduja Globle Solutions Ltd (supra) but said decisions cannot be made applicable in present case as in case before Mumbai ITAT, assessee has already charged higher interest that LIBOR rate whereas in present case, appellant has not charged any such interest in books of account. 11.5 So far as working adopted by AO for arriving at interest rate of 4.327% based upon fact that appellant has given unsecured loan to AE whereas SBI has given secured loan to AE which requires additional mark up of 50 base points and upfront fee is also required to equalized, it is observed that appellant itself has benchmarked entire transactions based upon loan agreement between SBI and AE and considering it to be internal CUP and TPO also has accepted such internal cup subject to adjustment being nature of loan and upfront fees as discussed herein above and appellant has not explained as to why such adjustments are not required to be made for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cylinders Ltd reported in 58 taxmann.com 254 wherein it was held that as under: In the present case, it is assessee-company that is issuing corporate guarantee to the effect that if the subsidiary AE does not repay loan availed of it from ICICI, then in such event, the assessee would make good the amount and repay the loan. The considerations which apply for issuance of a corporate guarantee are distinct and separate from that of bank guarantee and, accordingly, commission charged cannot be called in question, in the manner TPO has done. The comparison is not as between like transactions but the comparisons are between guarantees issued by the commercial banks as against a corporate Guarantee issued by holding company for the benefit of its AE, a subsidiary company. 54.1 The above finding of the Hon ble Bombay High Court is in relation to extension of corporate guarantee, but the principle laid down can be applied here in the case of extension of loans and advances also. Therefore, in our considered TPO was not right in considering the upfront fee charged by the bank as well adjustment of risk associated with unsecured loan. 54.2 We also note that in case of M/s Arvind L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is justified in computing the ALP at 7.69% (i.e. at LIBOR plus 2.5%) and the appeal of the assessee is allowed with respect to this Ground of Appeal. 54.3 In view of the above discussion and finding by the tribunal that the reasonable rate of interest shall be LIBOR + 2%, we hereby hold that suo-moto notional interest offered by the assessee at LIBOR + 2.8 % is ALP and no further adjustment is required to be made. Hence, we hereby set aside the finding of the learned CIT(A) and direct the AO to delete the upward adjustment made on account of benchmarking of interest free loan to AE. Thus, the ground of the appeal filed by the assessee is hereby allowed. 55. The last issue raised by the assessee in relation to allowance of deduction of Cess under section 37 of the Act has not been pressed by the learned AR of the assessee. Hence the same is hereby dismissed as not pressed. 56. In the result the appeal of the assessee is hereby partly allowed for statistical purposes. Coming to ITA No. 471/AHD/2020, an appeal by the Revenue for A.Y. 2013-14 57. The Revenue has raised following grounds of appeal: (1) The ld. CIT(A) has erred in law and facts In allowing d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue in its grounds of appeal for the AY 2013-14 is identical to the issue raised by the Revenue in ITA No. 335/AHD/2020 for the assessment year 2012-13. Therefore, the findings given in ITA No. 335/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2013-14. The appeal of the revenue for the assessment 2012-13 has been decided by us vide paragraph No. 24 of this order against the revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2013-14. Hence, the ground of appeal filed by the revenue is hereby dismissed. 62. The next issue raised by the Revenue vide ground Nos. 4 5 of its appeal is that the learned CIT(A) erred in restricting the disallowance under section 14A of the Act to the extent of 5.28 crores from actual disallowance of Rs. 28.30 crores further erred in deleting the addition made under book profit by the same amount. 63. At the outset, we note that the issues raised by the revenue in its grounds of appeal for the AY 2013-14 are identical to the issues raised by the revenue in ITA No. 335/AHD/2020 for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and , being intangible asset eligible for grant of depreciation u/s.32 of the I.T. Act on merits of the case. 4. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding addition of transfer pricing adjustment of Rs. 29,95,877/- for benchmarking of interest. 5. On the facts and in the circumstances of the case, the appellant is entitled for deduction of education cess and higher education cess paid while computing income from business and profession in view of the CBDT CIRCULAR F.No. 91/58/66-ITJ(19) DT. 18th May, 1967;. Hon'ble IT AT may direct for allowing deduction for education cess and higher education cess as allowable expenditure in view of binding CBDT circular and in view of decision of Hon'ble Rajasthan HC in the case of Income Tax Appeal No. 52/2018 Pr. Commissioner Of Income Tax Vs. M/s. Chambal Fertilizers And Chemicals Ltd and decision of Hon'ble Bombay High court in the case of Sesa Goa Limited in Tax Appeal No 17 18/2013. 6. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 68. The first issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 has been decided by us vide paragraph No. 12 of this order in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the ground of appeal filed by the assessee is hereby allowed. 74. The next issue raised by the assessee is that the learned CIT(A) erred in confirming the upward adjustment in TP on account of interest for Rs. 29,95,877/- only. 75. At the outset, we note that the issues raised by the assessee in its grounds of appeal for the AY 2014-15 are identical to the issues raised by the assessee in ITA No. 446/AHD/2020 for the assessment year 2013-14. Therefore, the findings given in ITA No. 446/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2014-15. The appeal of the assessee for the assessment 2013-14 has been decided by us vide paragraph No. 54 of this order in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2013-14 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the ground of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the ground of appeal filed by the revenue is hereby dismissed. 81. The next issue raised by the revenue vide ground Nos. 2 5 of its appeal is that the learned CIT(A) erred in holding the gain/loss on derivative/currency swap as non-speculative and eligible for deduction under section 80IAB of the Act. 82. At the outset, we note that the issues raised by the revenue in its grounds of appeal for the AY 2014-15 are identical to the issues raised by the revenue in ITA No. 335/AHD/2020 for the assessment year 2012-13. Therefore, the findings given in ITA No. 335/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2014-15. The appeal of the revenue for the assessment 2012-13 has been decided by us vide paragraph No. 29 of this order against the revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the ground of appeal filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowance made by AO. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding disallowance of depreciation for Rs. 18,12,31,296/- in respect of land development expenditure incurred on leasehold lands towards reclamation of land by the appellant on merits of the case. 3. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding disallowance of depreciation of Rs. 47,37,638/- claimed by the appellant-company on right to use leasehold land , being intangible asset eligible for grant of depreciation u/s.32 of the I.T. Act on merits of the case. 4. On the facts and in the circumstances of the case, the appellant is entitled for deduction of education cess and higher education cess paid while computing income from business and profession in view of the CBDT CIRCULAR F. No. 91/58/66-ITJ(19) DT. 18th May, 1967;. Hon ble ITAT may direct for allowing deduction for education cess and higher education cess as allowable expenditure in view of binding CBDT circular and in view of decision of Hon ble Rajasthan HC in the case of Income Tax Appeal No. 52/2018 Pr. Commissioner Of Income Tax Vs. M/s. Chambal Fert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in its grounds of appeal for the AY 2015-16 are identical to the issues raised by the assessee in ITA No. 319/AHD/2020 for the assessment year 2012-13. Therefore, the findings given in ITA No. 319/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2015-16. The appeal of the assessee for the assessment year 2012-13 has been decided by us vide paragraph No. 12 of this order in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2015-16. Hence, the ground of appeal filed by the assessee is hereby allowed. 95. The last issue raised by the assessee in relation to allowances of deduction of cess under section 37 of the Act has not been pressed by the learned AR of the assessee. Hence the same is hereby dismissed as not pressed. 96. In the result appeal of the assessee is hereby partly allowed for statistical purposes. Coming to ITA No. 64/AHD/2021, an appeal by the Revenue for A.Y. 2015-16 97. The Revenue has raised following grounds of appeal: 1. The ld. CIT(A) has erred in deleting the disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s grounds of appeal for the AY 2015-16 are identical to the issues raised by the revenue in ITA No. 335/AHD/2020 for the assessment year 2012-13. Therefore, the findings given in ITA No. 335/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2015-16. The appeal of the revenue for the assessment year 2012-13 has been decided by us vide paragraph No. 29 of this order against the revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2015-16. Hence, the ground of appeal filed by the revenue is hereby dismissed. 102. The next issue raised by the Revenue vide ground Nos. 3 4 of its appeal is that the learned CIT(A) erred in restricting the disallowances under section 14A of the Act to the extent of exempted income. 103. At the outset, we note that the issues raised by the revenue in its grounds of appeal for the AY 2014-15 are identical to the issues raised by the revenue in ITA No. 335/AHD/2020 for the assessment year 2012-13. Therefore, the findings given in ITA No. 335/AHD/2020 shall also be applicable for the year under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J(19) DT. 18th May, 1967;. Hon ble ITAT may direct for allowing deduction for education cess and higher education cess as allowable expenditure in view of binding CBDT circular and in view of decision of Hon ble Rajasthan HC in the case of Income Tax Appeal No. 52/2018 Pr. Commissioner Of Income Tax Vs. M/s. Chambal Fertilizers And Chemicals Ltd and decision of Hon ble Bombay High Court in the case of Sesa Goa Limited in Tax Appeal No 17 18/2013. 4. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 108. The first issue raised by the assessee is that learned CIT(A) erred in sustaining to addition under section 14A of the Act for Rs. 1,51,24,949/- only. 109. At the outset, we note that the issues raised by the assessee in its grounds of appeal for the AY 2016-17 are identical to the issues raised by the assessee in ITA No. 446/AHD/2020 for the assessment year 2013-14. Therefore, the findings given in ITA No. 446/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2016-17. The appeal of the assessee for the assessment 2013-14 has been decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come and restricting the net disallowance to Rs. 1.50 crores and giving further relief to the assessee amounting to Rs. 24.58 crores. 5. The ld. CIT(A) has erred in deleting the disallowance of loss on foreign currency derivatives/swap transactions of Rs. 148,40,29,769/-. 6. The ld. CIT(A) has erred in deleting the Transfer Pricing upward adjustments of Rs. 9,60,91,300/- made by the AO . 7. The appellant craves, to leave, to amend and/or to alter any ground or add a new ground which may be necessary. 115. The first issue raised by the revenue is that the learned CIT(A) erred in allowing the deduction under section 80IAB of the Act on the receipt from scrap sale for Rs. 5,80,72,284/-. 116. At the outset, we note that the issues raised by the revenue in its grounds of appeal for the AY 2016-17 are identical to the issues raised by the revenue in ITA No. 335/AHD/2020 for the assessment year 2012-13. Therefore, the findings given in ITA No. 335/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2016-17. The appeal of the revenue for the assessment year 2012-13 has been decided by us vide paragraph No. 24 of this order against the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) erred in deleting the TP adjustment on corporate guarantee. 122. At the outset, we note that the issues raised by the revenue in its grounds of appeal for the AY 2016-17 are identical to the issues raised by the revenue in ITA No. 335/AHD/2020 for the assessment year 2012-13. Therefore, the findings given in ITA No. 335/AHD/2020 shall also be applicable for the year under consideration i.e. AY 2016-17. The appeal of the revenue for the assessment year 2012-13 has been decided by us vide paragraph No. 41 of this order against the Revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2016-17. Hence, the ground of appeal filed by the revenue is hereby dismissed. 123. In the result, the appeal of the revenue is hereby dismissed. 124. In the combined results: S. No. ITA Nos. A. Year Appellant Result 1 319/Ahd/2020 2012-13 Assessee Partly allowed 2 3 335 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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