9911796707
TMI Blog2024 (6) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... t the contribution made by the specified person to the Core Settlement Guarantee Fund in the category of income therefore corresponding claim of treating such contribution as expenditure in the hands of specified person cannot be simply brushed aside without any relevant reason. As considered the findings of the coordinate bench in the case of BSE Ltd. [ 2019 (11) TMI 1354 - ITAT MUMBAI] on the issue of similar statutory contributions made by the Bombay Stock Exchange to the Core Settlement Guarantee Fund in accordance with the circular of the SEBI holding that assessee is able to prove beyond doubt that the contribution to Core SGF is not in the nature of any deposit/contingency/reserve. In that decision it is further held that the contribution to the Investor Service Fund was made by the BSE from 1992 onwards claimed as deduction u/s 37 of the Act which had been allowed by the department till date. Further in terms of the circular dated 27th August, 2014 issued by SEBI as reproduced supra in this order it is beyond any doubt that the assessee is governed by the rules and regulations framed by the SEBI for carrying on its business of stock exchange in India. The assessee is bound ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded for determination of annual value. There are decisions on the coordinate benches as also Hon'ble Courts above dealing with fine points regarding these aspects. Learned counsel has, even before us, made these legal submissions which the CIT(A) had no occasion to deal with by way of a speaking order. In this view of the matter, we deem it fit and proper to remit the matter to the file of the CIT(A) with a specific direction to deal with all the contentions of the assessee by way of a speaking order and in accordance with the law. Disallowance u/s 14A r.w.r. 8D - assessee has suo moto disallowed the expenses towards earning exempt income - HELD THAT:- We consider that basis for the correctness of self -devised method of the assessee for estimating the disallowance u/s 14A is required to be examined at the level of the assessing officer. Therefore in order to decide the issue on merit we restore this issue to the file of the assessing officer for deciding de novo after verification of the basis of allocation of expenses under the different heads from the relevant material to be furnished by the assessee. It is needless to say that observation made by us will not injure or imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing proportionate amortised amount of lease premium paid to Mumbai Metropolitan Regional Development Authority in respect of leasehold land and the reasons assigned for doing so are wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961, and Rules made there under. (b) The ld. lower authorities erred in not appreciating that the lease premium paid was nothing but lease rent paid in advance as it is paid only for user of land during lease period and no capital asset would remain with the appellant company at the end of the lease period and the reasons assigned for rejecting the claim are wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961, and Rules made thereunder. (c) The Id. lower authorities erred in not appreciating that the annual ground rent payable by the appellant is nominal/concessional as compared to market rate of rent which was much higher as per evidence submitted by the appellant company and the reasons assigned for rejecting the claim are wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961, and Rules made thereunder. (d) The Id. lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or before the date of hearing. 2. Fact in brief is that return of income declaring total income of Rs. 416,34,29,186/- was filed on 01.09.2016. The case of the assessee was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 28.08.2017. The assessee is a leading stock exchange of the country. The assessee NSE has been incorporated to facilitate/promote, assist, regulate and manage in the public interest, dealings in securities of all kinds and to provide specialised advanced, automated and modern facilities for trading, clearing and settlement of securities. 3. During the course assessment the assessing officer noticed that assessee has debited an amount of Rs. 761.52 crores in its profit and loss account towards contribution to NSCCL Core Settlement Guarantee Fund (core SGF) and same was claimed as deduction from its profit. During the course of assessment, AO asked the assessee to justify the allowability of the said expenses under the Income Tax Act, 1961. The assessee has given detailed submission vide letter dated 24.12.2018 and 28.12.2018 as under:- Core Settlement Guarantee Fund (Core SGF) Vide circular dated 27/08/2014, Securities and Exchange Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the CC on guaranteed basis. Track record of defaults of members (number of defaults amount in default) With respect to how to decide the corpus of the Core SGF- 6. The corpus of the fund should be adequate to meet out all the contingencies arising on account of failure of any member(s). The risk or liability to the fund depends on various factors such as trade volume, delivery percentage, maximum settlement liability of the members, the history of defaults, capital adequacy of the members, the degree of safety measures employed by the CC/SE etc. A fixed formula, therefore, cannot be prescribed to estimate the risk or liability of the fund. However, in order to assess the fair quantum of the corpus of Core SGF, CC should consider the following factors: Risk management system in force Current and projected volume/turnover to be cleared and settled by theCC on guaranteed basis Track record of defaults of members (number of defaults, amount indefault) and 7. However, Minimum Required Corpus of Core SGF (MRC) for each segment of each stock exchange shall be subject to the following. i) The MRC shall be fixed for a month. ii) By 15th of every month, CC shall review and determine t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibility is collect CM primary contribution either upfront or staggered over a period of time In case of staggered contribution the remaining balance shall be met by CC to ensure adequacy of total Core SGF corpus at all times Such CC contribution shall be available to CC for withdrawal as and when further contributions from CMs are received With respect to access to Core SGF, the aforesaid circular directs- 13. CC may utilise the Core SGF in the event of a failure of member(s) so honour settlement commitment In case of default by a clearing member, the aforesaid circular lays down order of utilization of funds as Default Waterfall, which is as follows- 16. The default waterfall of CC for any segment shall generally follow the following order I. monies of defaulting member including defaulting member's primary contribution to Core SGF(s) and excess monies of defaulter in other segments) II. Insurance, if any III. CC resources (equal to 5% of the segment MRC) IV. Core SGF of the segment in the following order: 1. Penalties 2. CC contribution to the extent of at least 25% of the segment MRC 3. Remaining Core SGF CC contribution Stock Exchange contribution and non-defaulting primary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessing officer was of the view that once assessee has made contribution to a fund and parted away from the said amount, it does not necessarily mean that the said contribution become an expense. The core SGF is in the nature of reserve that has been created with the NSE clearing corporation. The creation of this reserve while it benefits the investor, it primarily covers the risk of the stock exchange and guarantee settlement even in case of default by clearing member. The AO was of the view that the risk of the exchange and that of the investor are not delinked andthe fund acts as a trustee on behalf of the stock exchange and that clearing corporation. The funds guarantee the settlement of trade and there is a clear demarcation in the corpus of the fund, as to how much portion is contributed by whom. The assessing officer stated that during the course of scrutiny assessment information was sought with respect to the actual defaults of the clearing members during the year under consideration, but, there was no default during the year by clearing members, therefore, contributions made by the assessee to the core SGF was disallowed as expenditure and added to the total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y authority, its allowability depends on the express sanction in the law. Donations are voluntary contributions and they are only appropriation of income/profit, even though it may still be taxable in the hands of the recipient. The direction of SEBI initially to appellant was to transfer 25% of its profits. Later on the direction said that it is in relation to the extent of shortfall in the Minimum Required Corpus of Core SGF which would be fluctuating on the basis of stress tests. Still the percentage prescribed as minimum for Stock exchange and Clearing Corporation and maximum for clearing members did not undergo any change. Instead of a fixed adhoc percentage of profits to be transferred as prescribed in the earlier years, due to the magnitude of the Fund reaching appreciable levels, the prescription changed to MRC (minimum required corpus which is a fluctuating phenomenon on the basis of stress tests) the contribution was required to be made in the same proportion of 25:50 25. These events do not alter the characteristic of the contribution that it was a buffer to be created to preserve an ecosystem from disruption as capital and money markets are important structures in any e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to Core Settlement Guarantee Fund as per Regulation 33 which stood amended with a direction to contribute to the Minimum Required Corpus of Core SGF which would be set periodically, and the contribution was a minimum 25% in the case of the appellant 8. The contributions were credited by the recipient viz., the Clearing Corporation to a distinct 'CORE SGF and the funds were utilised for making investments distinctly as Investments from CORE SGF'. The details of contribution, segment wise made by each of the contributory including the appellant was disclosed as part of the Notes on Accounts in all the financial years as part of the Annual Report of the Clearing Corporation and therefore the identity of the contributor and their relative rights are recognised and kept intact. This certainly goes against the claim of the appellant that the money spent is irretrievably lost. 9. Another factor which is recognised, and which goes against the claim of the appellant is that the income arising from investments out of the fund was adjusted towards the contribution payable by the contributories proportionate to the credit of each of the contributory in the Corpus as per details discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the books of the assessee. 19 SECC, being only a market regulator, its regulations cannot partake the character of a provision of law so as to guide the Assessing Officer to decide the allowability of a claim. 20. Another fact is that Core SGF, even though integral in the books of NSE Clearing Ltd, still the Fund is treated as a separate Entity enjoying tax exemption with requirement to file return of income by virtue of a specific provision in the Act. [Section 10 (23EE)] The argument that the said contribution is income in the hands of the FUND and therefore the said contribution would constitute expenditure in the hands of the appellant would be countered by the argument that every item of income in the hands of a person would not necessarily constitute an item of expenditure in the hands of the counter party, the apt example being voluntary contributions made to Trust. The contributions are only application of income in the hands of the contributor. Here even though there is a sanction from a statutory authority, it does not mean that it is expenditure, for the reason that the said statutory contribution lacks the necessary corresponding provision under Income tax Act to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. He referred part 33 of the regulation pertaining to contribution to the Settlement Guarantee Fund which provide that contribution to the funds as specified in regulation 39 shall be made by the recognised stock exchange, recognised clearing corporations and the clearing members in the manner as may be specified by the board from time to time. He also referred regulation 39 regarding establishment of fund to guarantee the settlement of trades executed in recognised stock exchange. He also referred page no. 150 of the paper book pertaining to circular issued by the SEBI dated 27.08.2014 regarding Core Settlement Guarantee Fund which provide the objective of the fund and the percentage of contribution to the Core SGF to be made by the each parties and others conditions regarding operating and maintaining of the fund. The ld. Counsel also explained the nature of fund and its relevancy in the settlement of trading in securities transactions. The ld. Counsel also referred that on identical issue and similar facts the ITAT Mumbai in the case of BSE Ltd has adjudicated the issue in favour of the assessee vide ITA No. 1790/Mum/2019 in the case of BSE Ltd. vs. The Pr.CIT-2 dated 04.10.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Core Settlement Guarantee Fund specifying the default waterfall and stress test, norms for MRC on Core SGF contributions and utilisation. The purpose of creation of the said fund was to achieve the following objectives: a). create a core fund (called core settlement guarantee fund). within the SGF against which no exposure is given and which is readily and unconditionally available to meet settlement obligations of clearing corporation in case of clearing member(s) failing to honour settlement obligation. b) align stress testing practices of clearing corporations with FMI principles (norms for stress testing for credit risk, stress testing for liquidity risk and reverse stress testing including frequency and scenarios). c) capture in stress testing, the risk due to possible default in institutional trades, d). harmonise default waterfalls across clearing corporations, e) limit the liability of non-defaulting members in view of the Basel capital adequacy requirements for exposure towards Central Counterparties (CCPs). f) ring-fence each segment of clearing corporation from defaults in other segments, and g) bring in uniformity in the stress testing and the risk management practices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Fund shall be tested by way of periodic stress tests, in the manner specified by the Board. 3) In order to promote and sustain an efficient and robust global financial infrastructure, the Committee on Payments and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) updated the standards applicable for systemically important financial market infrastructures (central counterparties, payment systems, trade repositories and securities settlement systems) with the Principles for Financial Market Infrastructures (PFMIs). SEBI as a member of IOSCO is committed to the adoption and implementation of the new CPSS-IOSCO standards of PFMIs. As required under PFMIs, to provide greater legal basis for settlement finality, netting and rights of FMIs over collateral, Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2013 were notified on September 02, 2013. Vide circular dated September 04, 2013, SEBI required FMIs under its regulatory purview to comply with the PFMIs applicable to them. The FMI principles, inter-alia, include standards regarding participant default rules and procedures, minimu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failure of any member(s). The risk or liability to the fund depends on various factors such as trade volume, delivery percentage, maximum settlement liability of the members, the history of defaults, capital adequacy of the members, the degree of safety measures employed by the CC/SE etc. A fixed formula, therefore, cannot be prescribed to estimate the risk or liability of the fund. However, in order to assess the fair quantum of the corpus of Core SGF, CC should consider the following factors: Risk management system in force Current and projected volume/turnover to be cleared and settled by the CC on guaranteed basis Track record of defaults of members (number of defaults, amount in default) 7) However, Minimum Required Corpus of Core SGF (MRC) for each segment of each stock exchange shall be subject to the following: i) The MRC shall be fixed for a month. ii) By 15th of every month, CC shall review and determine the MRC for next month based on the results of daily stress tests of the preceding month. (For example, by 15th February, CC shall determine MRC for March based on results of various stress tests conducted in January). CC shall also review and determine by 15th of every m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns from CMs are received. The above prescribed limits of contribution by CC, SE and CMs may be reviewed by SEBI from time to time considering the prevailing market conditions. 9) Any penalties levied by CC (as per Regulation 34 of SECC Regulations) shall be credited to Core SGF corpus. 10) Interest on cash contribution to Core SGF shall also accrue to the Core SGF and pro-rata attributed to the contributors in proportion to their cash contribution. 11) CC shall ordinarily accept cash collateral for Core SGF contribution. However, CC may accept CM contribution in the form of bank FDs too. CC shall adhere to specific guidance which may be issued by SEBI from time to time in this regard. Management of Core SGF 12) The Defaulter's Committee/SGF utilization Committee of the Clearing Corporation shall mange the Core SGF. The CCs shall follow prudential norms of Investment policy for Core SGF corpus and establish and implement policies and procedures to ensure that Core SGF corpus is invested in highly liquid financial instruments with minimal market and credit risk and is capable of being liquidated rapidly with minimal adverse price effect. The instruments in which investments may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her segments (after meeting obligations of those segments) and remaining CC resources to that extent as approved by SEBI. VII. Capped additional contribution by non-defaulting members of the segment.** VIII. Any remaining loss to be covered by way of pro-rata haircut to payouts.*** * INR 100 Crore to be excluded only when remaining CC resources (excluding CC contribution to core SGFs of other segments) are more than INR 100 Crore. **CC shall limit the liability of non-defaulting members towards additional contribution to a multiple of their required primary contribution to Core SGF and the framework regarding the same should be disclosed. In case of shortfall in recovery of assessed amounts from non-defaulting members, further loss can be allocated to layer 'VI' with approval of SEBI. ***In case loss allocation is effected through haircut to payouts, any subsequent usage of funds shall be with prior SEBI approval. Further, any exit by CC post using this layer shall be as per the terms decided by SEBI in public interest. Stress testing and back testing 17) CC shall effectively measure, monitor, and manage its credit exposures to its participants and those arising from its pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in price of top 2 scrips by turnover or 20% movement in price of top N scrips by turnover etc.) 21) Back testing for adequacy of margins: CC shall daily conduct back testing of the margins collected vis- -vis the actual price changes for the contracts being cleared and settled in every segment to assess appropriateness of its margining models. 22) Adequacy of financial resources : CC shall ensure that it maintains sufficient financial resources to cover a wide range of potential stress scenarios that should include, but not be limited to, the default of the two participants and their associates that would potentially cause the largest aggregate credit exposure to the CC in extreme but plausible market conditions. Thus, CC shall continuously monitor the adequacy of financial resources (as available in its default waterfall) against the uncovered loss estimated by the various stress tests conducted by the CC and take steps to beef up the same in case of shortfall. 23) On at least a monthly basis, CC shall perform a comprehensive and thorough analysis of stress testing scenarios, models, and underlying parameters and assumptions used to ensure they are appropriate for determining t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Core Settlement Guarantee Fund by the Clearing Corporation minimum 50%, Stock Exchange minimum 25% and Clearing members minimum 25% of the MRC (minimum Required corpus of Core SGF (MRC) for each segment of each stock exchange. The assessee claimed that under the aforesaid regulatory requirement laid down by the SEBI it had made statutory contributions of Rs. 761.52 cr. to Core Settlement Guarantee Fund and it has no control domain over the such contribution and utilised only in the manner as laid down by SEBI in this behalf. 15. The ld. Counsel as referred supra in this order submitted that ITAT Mumbai has allowed the similar statutory deduction u/s 37 on the identical issues and facts in the case of BSE Ltd. (Bombay Stock Exchange) vide ITA No. 1790/Mum/2019 dated 04.10.2019 as per the copy of order placed at page no. 1 to 29 of the legal Paper Book filed With the assistance of the ld. Representative we have gone through the decision of coordinate bench in the case of BSE Ltd. Vs. The Pr.CIT-2 as referred supra wherein the identical issue on similar facts has been adjudicated while deciding the appeal u/s 263 of the Act. The relevant extract of the operating para of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the said issue was already examined by the AO during the course of assessment. Moreover, the contribution to the Investors Service Fund is being made by BSE from 1992 onwards and has been claimed as expense under section 37 of the Act. The said claim has been allowed and accepted by the department till date and there is no change in facts compared to earlier years. If there are no changes in the facts or circumstances over the years, then it would not be appropriate on part of the department to change the opinion in subsequent years. The details are as under: - Sr. No. AY Contribution to Investor Service Fund Whether order u/s 143(3) was passed Whether Contribution was allowed 1. 2006-07 1,75,00,000 Yes Yes 2. 2007-08 2,99,00,000 Yes Yes 3. 2008-09 3,13,00,000 Yes Yes 4. 2009-10 3,13,00,000 Yes Yes 5. 2010-11 3,95,00,000 Yes Yes 6. 2011-12 3,99,00,000 Yes Yes 7. 2012-13 5,59,00,000 Yes Yes 8. 2013-14 6,05,00,000 Yes Yes 9. 2014-15 6,40,00,000 Yes Yes 10. 2015-16 12,3,00,000 Yes Yes (since revised u/s 263) The contribution has been made by assessee even in prior years and never disallowed by Department. For this proposition of consistency, Ld Counsel drew our attention to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revision order of the CIT, held as under: - The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions erroneous , erroneous assessment and erroneous judgment have been defined in Black's Law Dictionary. According to the definition, erroneous means involving error; deviating from the law . Erroneous assessment refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, erroneous Judgment means one rendered according to course and practice of court, but contrary to law, upon mistaken view of law, or upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence whereof the lawful revenue due to the State has not been realized or cannot be realized. It can mean nothing else . The aforesaid observations were also applied by the Gujarat High Court in Addl. CIT v. Mukur Corporation [1978] 111 ITR 312. We are of the opinion that the aforesaid interpretation given by the Calcutta High Court to the expression prejudicial to the interests of the Revenue is the correct interpretation. 16. We have also gone through the judgment of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v/s CIT 243 ITR 83 (SC). Wherein Hon'ble Court has stated that the provision of Sec. 263 of the Act cannot be invoked to correct each and every type of mistake or error committed by the AO and that it is only when the order is erroneous that the section would be attracted. In other words, what has been emphasized by the Hon'ble Supreme Court is that every loss of revenue as a consequence of an order of the AO cannot be construed to be prejudicial to the interests of the revenue, unless it can be established that the assessment order is erroneous in as much as the same is unsustainable in law. Hence, we are also of the view that in order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n part with the specified person, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is shared. 17. We have also perused the provisions of section 10 of the act.Section 10 under the IT Act is a provision that lists various types of incomes that are exempt from income tax in India. The section provides a list of incomes that are not of taxable nature for an individual or entity. These exemptions are provided to encourage certain activities or to provide relief to certain categories of taxpayers. Section 10(23EA) provide that Any income in the form of contributions received from recognized stock exchanges and the members of an investor protection fund is exempt. However, if any amount is shared with a recognized stock exchange, it becomes taxable.SimilarlySection 10(23EE) specified that income of a core settlement guarantee fund that is set up by a clearing corporation is provided exemption from tax under this section. However, in case where any amount standing to the credit of the Fund and not charged to income-tax is shared with the specified person,the amount so shared shall be deemed to be the income and shall be chargeabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing (i) the Income by way of contribution received from specified persons (ii) the income through penalties imposed by the recognized clearing corporation and credited to the Core Settlement Guarantee Fund or (iii) the income from investments made by the fund. 21. As per the provision, for the purpose of the exemption, specified person would include the following;- 1. A recognized clearing corporation which has established the Fund and maintains it 2. A recognized stock exchange which is a shareholder of the recognized clearing corporation or which contributes to the Fund 3. Any clearing member who contributes to the Fund. 22. Section 10(23EE) exempt specify income and the specify income also include any income by way of contribution received from specified person. 23. The specify person in the section under clause 10(23EE)(iv)(b)also include any recognised stock exchange, being a shareholder in such recognised clearing corporation, or a contributor to the Core Settlement Guarantee Fund therefore assessee being a Stock Exchange is a specified person. 24. The provision of the section 10 as referred above clearly put the contribution made by the specified person to the Core Settleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the 51st year of term of lease upto the end of the term of lease 3% of the premium amount As the lease period is of 80 years the aforesaid premium has been amortized over the said period and proportionate amount of Rs. 129,52,158/- i.e for the period 01.04.2015 to 31.03.2016 debited to accounts has been claimed as deduction. 15. The assessee submitted before the AO that the lease premium of Rs. 90,60,60,000/- paid to MMRDA was rent paid in advance. The assessee also mentioned the opinion of the expert commissioner of ICAI regarding amortization of the lump-sum payment over the period of lease. However, the AO has not agreed with the submission of the assessee and stated that assessee s similar claim for A.Y. 1995-96 to 2005-06 was disallowed by the ITAT. 27. The ld. CIT(A) dismissed the ground of appeal filed by the assessee. 28. Heard both the sides and perused the material on record. This is undisputed facts that assessee had capitalised the lease hold land and shown as asset in the form of land in its balance sheet and also claimed depreciation on the amount capitalised as leasehold land. During the course of appellate proceedings before us the ld. Counsel filed copy of IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the decision of Hon ble Gujarat High Court in the case of Sun Pharmaceuticals Ind. Ltd. (supra) is applied in the present case, the relevant facts are required to be verified, we therefore restore this issue to the file of the A.O. for deciding the same afresh in the light of the decision of Hon'ble Gujarat High Court in the case of Sun Pharmaceuticals Ind. Ltd. (supra) after verifying the relevant facts. Ground No. 4 5 of the assessee's appeal are accordingly treated as allowed for statistical purpose. 3.2. Respectfully following the same, we restore this issue to the file of ld. AO for deciding the issue in the light of decision of Hon ble Gujarat High Court in the case of Sun Pharmaceuticals India Ltd reported in 329 ITR 479 (Guj). Accordingly, the Ground Nos. 2(a) to 2(d) raised by the assessee are allowed for statistical purposes. Following the decision of the ITAT as discussed supra this issue is also restored to the file of the AO for deciding a fresh as directed above in the findings of the ITAT. Therefore, this ground of appeal of the assessee is allowed for statistical purpose. Ground No. 3: Rs. 105,72,994/- being maintenance and other charges received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,366), but the assessee has not shown the amount of Rs. 1,39,91,621 in the computation of income from house property. This amount was instead taken to the profits and gains from business and was shown as reduced from expenditure for maintenance, and only the net amount (excess of expenses over this receipt) was taken to the profit and loss account. The stand of the assessee was that the maintenance charges recovered was nothing but a reimbursement of expenses, and in fact a partial reimbursement. However, the Assessing Officer did not accept the said plea and included the maintenance expenses in the computation of income from house property. Aggrieved, assessee carried the matter in appeal but without any success. Elaborate arguments were advanced on the factual and legal aspects of this treatment, but the CIT(A) dismissed the arguments of the assessee by making a very brief observation to the effect that since the Assessing officer has based his conclusions on Hon'ble Supreme Court's judgment in the case of Shambhu Investments (263 ITR 143). the action of the Assessing Officer is sustained. The assessee is not satisfied and is in further appeal before us. Para 100. Having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31/Mum/2023 Ground No.1: regarding disallowance of Rs. 1,34,07,00000 as contribution to Core Settlement Guarantee Fund. 34. Since the facts and issue involved in this appeal is similar to the ITA No. 730/Mum/2023 as adjudicated supra therefore applying the finding of ITA No.730/Mum/2023 as mutatis mutandis this ground of appeal of the assessee is also allowed. Ground No. 3: regarding disallowance of Rs. 129,52,158/- being proportionate amortized amount of lease premium: 35. This ground of appeal is based on similar issue and identical facts as we have adjudicated in the ground no. 2 vide ITA 730/Mum/2023 as supra in this order, therefore, applying that findings mutatis mutandis this ground of appeal is allowed for statistical purposes. Ground No. 4: Regarding treating an amount of Rs. 35,06,631/- being maintenance and other charges recovered from licensees as Income from House Property: 36. Similar issue on identical facts have been adjudicated in ground no. 3 vide ITA No. 730/Mum/2023 as supra in this order, therefore, applying these findings mutatis mutandis this ground of appeal of the assessee is also allowed for statistical purpose. Ground No. 2: 37. The assessee has suo moto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e during the course of assessment vide letter dated 12.10.2019 the assessee submitted the breakup of suo motto estimation of expenses disallowed u/s 14A of the act as per page no.90 to 91of the paper book filed. The assessee explained vide letter dated 09/12/2019 that it had made allocation of expenses towards earning exempt income on reasonable basis. The AO after considering the submission of the assessee categorically stated at para 9.4 of the assessment order that the assessee has not given any basis for applying percentage rate to the expenses on estimation basis. We consider that basis for the correctness of self -devised method of the assessee for estimating the disallowance u/s 14A is required to be examined at the level of the assessing officer. Therefore in order to decide the issue on merit we restore this issue to the file of the assessing officer for deciding de novo after verification of the basis of allocation of expenses under the different heads from the relevant material to be furnished by the assessee. It is needless to say that observation made by us will not injure or impair the case of the AO and will not cause any prejudice to the defence explanation of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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