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TMI Blog2023 (7) TMI 1511X X X X Extracts X X X X X X X X Extracts X X X X ..... passed in assessee s own case in Grasim Industries Ltd. [ 2023 (7) TMI 555 - ITAT MUMBAI ], for the assessment year 2004 05, after considering the Sales Tax subsidy received under the aforesaid schemes held the same to be capital in nature and thus not taxable in the hands of the assessee. Disallowance of depreciation on the let out property - assessee has claimed depreciation on the let out premises and is also claiming a deduction equal to 30% of annual rental value while computing income from house property the assessee cannot be allowed both deductions - HELD THAT:- In view of the above, once the property forms part of the block of assets, carving out the depreciation for the said property and disallowing the same goes against the spirit of allowing depreciation on the entire block of depreciable assets. Before concluding, we may note that in this appeal the Revenue has not disputed the claim of deduction u/s 24 of the Act in respect of the property which forms part of the block of assets. Thus, merely because the Revenue has accepted the claim of deduction u/s 24 of the Act doesn t mean that the property which forms part of the block of assets will cease to be so. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as capital receipt and thus not chargeable to tax - HELD THAT:- As relying on M/s Grasim Industries Ltd. [ 2023 (6) TMI 611 - ITAT MUMBAI ] the issue is squarely covered in favour of the assessee wherein it has been held that interest subsidy received under technology upgradation fund scheme, though credited in the net off against the interest expenditure in the books of account is still capital in nature and therefore not chargeable to tax. Further the argument of the learned departmental representative has also been negated about the applicability of explanation 10 to section 43 (1) of the act by the decision of Orbit exports [ 2020 (9) TMI 617 - ITAT MUMBAI ] In view of this both the grounds of appeal raised by the learned assessing officer are dismissed. Disallowance of Education Cess under section 40(a)(ii) - HELD THAT:- We find that Finance Act, 2022, with retrospective effect from 01/04/2005, inserted Explanation 3 to section 40(a)(ii), whereby it has been provided that the term 'tax' shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax. We further find that in JCIT Vs. Chambal Fertilisers Chemicals L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided in section 80IA(4) for availing the benefit of the said section - HELD THAT:- We find that the language of the section does not support the submissions so made by the learned DR, as there is no specific requirement in the section that such an agreement should be prior to the operation. We find that the said section only requires that there has to be an agreement, which condition as noted by the coordinate bench of the Tribunal in the preceding year is duly satisfied. In the absence of any allegation of change in facts and law as compared to the preceding year, we find no reason to deviate from the view so taken by the coordinate bench in the preceding year. Thus, we find no infirmity in the impugned order in allowing deduction under section 80IA of the Act to the assessee in respect of profits from Rail System, Raipur, and Hotgi. - SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER For the Appellant : Shri J.D. Mistri A/W and Shri Madhur Agrawal For the Respondent : Dr. Kishor Dhule ORDER PER SANDEEP SINGH KARHAIL, J.M. The present cross appeals have been filed challenging the impugned order dated 30/03/2006, passed under section 250 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e held that the entire disallowance of Rs. 5,02,800/- is deleted and the ground of appeal is fully allowed. 3. Sales tax exemption 3.1. On the facts and circumstances of the case and in law, the CIT (A) erred in upholding the action of the AO in treating sales tax exemption benefit of Rs. 143.12 crores as revenue receipt. 3.2. The CIT (A) failed to appreciate that the object of grant of incentive is to promote setting up of industries in backward areas and therefore the subsidy is capital in nature. 3.3. The CIT(A) ought to have held that sales tax exemption benefit of Rs. 143.12 crores is capital receipt. 4. Depreciation on let out property 4.1. On the facts and circumstances of the case and in law, the CIT (A) erred in upholding the action of the AO in disallowing depreciation of Rs. 45,681/-. 4.2. The CTT (A) ought to have held that once an asset forms part of block of assets, it loses its identity and depreciation on a particular asset cannot be worked out separately and disallowed. 5. Adjustment of receivable against Provisions for Doubtful debts 5.1. On the facts and circumstances of the case and in law, the CIT (A) erred in upholding the action of AO in rejecting the claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any of the above ground(s) before or at the time of hearing. The appellant respectfully prays that relief prayed for in the abovementioned grounds be granted and that the appellate order of the CIT (A) be modified accordingly. 4. The issue arising in ground no.1, raised in assessee s appeal, is pertaining to the amount paid or written back during the year under consideration which has already been disallowed in the earlier years under section 43B of the Act. 5. Similar to the arguments made in the appeal for the assessment year 2003 04, the learned Sr. Counsel, appearing for the assessee, submitted that this ground is in respect of the alternate claim of the assessee to allow deduction under section 43B(c), (d) and (e) of the Act in respect of liability disallowed in earlier years, which are paid/written back in the year under consideration. The learned Sr. Counsel further submitted that the claim of the assessee under section 43B of the Act has been allowed by the Tribunal in earlier years and, therefore, this ground now is rendered infructuous. 6. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord. We find that similar issue was considered by the Tribunal in A.Y. 2000-01 vide order dated 9-10-2013 wherein the ground taken by the assessee was dismissed as the same has become infructuous. It was found by Tribunal that it is an alternative plea which relates to A.Y. 1993-94 decided by the Tribunal in assessee's favour. The appeal filed by the Department has been dismissed by the Tribunal vide order dated 20-12-2001. As the facts and circumstances during the year under consideration are para materia wherein appeal of department in earlier year was dismissed by the Tribunal, therefore, ground taken by assessee for disallowance during the year has become infructuous. The view taken by the Tribunal in A.Y. 2000-01 is respectfully followed, ground of the assessee becomes otiose and is accordingly dismissed. 7. Respectfully following the above decision and following the principle of consistency, the view taken by the Tribunal in A.Y. 2000-01 is respectfully followed, ground raised by the assessee is accordingly dismissed. 7. Thus, respectfully following the aforesaid decision, ground no.1, raised in assessee's appeal is dismissed. 7. Thus, respectfully following the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/10/1988 by State of Maharashtra Sales Tax New Incentive Scheme for Industries 1989, Rajasthan Sales Tax Exemption Scheme (Madhya Pradesh Industrial Policy Action Plan, 1994) Sales Tax Waiver Scheme (Package of Fiscal Incentives offered by Government of Tamil Nadu to Industries) Punjab Industrial Incentive Code under the Industrial Policy, 1996 Haryana Valued Added Tax Act, 2003 Sales Tax Incentive Scheme (Incentives offered by Government of Gujarat under the New Incentive Policy-Capital Investment Incentive (General) Scheme-1995-2000) 16. We find that the coordinate bench of the Tribunal, vide order dated 23/06/2023, passed in assessee s own case in Grasim Industries Ltd. in ITA No.3439/Mum./2005 and ITA No.4337/Mum./2005, for the assessment year 2004 05, after considering the Sales Tax subsidy received under the aforesaid schemes held the same to be capital in nature and thus not taxable in the hands of the assessee. The relevant findings of the coordinate bench, in the aforesaid decision, are as under: 54. We have considered the submissions of both sides and perused the material available on record. As per the assessee, the object for the grant of the incentive by the State Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation, growth and new employment generation in the respective areas which would in turn promote the growth of the State. Hence, it could be safely concluded that subsidy / incentive granted is only for setting up of the units based on the fixed percentage of the capital cost and not for running the business of the assessee. Moreover, even this subsidy which is determined based on sales tax assessment orders for 9 years, 6 years etc., are subject to maximum outer limit already fixed under the respective schemes. Though the quantification of the subsidy has been made post commencement of business, the measurement of subsidy is immaterial. In our considered opinion, none of the schemes contemplated to finance the assessee in the form of subsidy / incentive for meeting the working capital requirements of the assessee company post commencement of business. Hence, by applying the purpose test, apparently, the subsidy / incentive received in the instant case would only have to be construed as capital receipts not chargeable to income tax. In this regard, we find that ld. AR placed reliance on the decision of Hon ble Supreme Court in the case of Ponni Sugars and Chemicals Ltd., reported i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of business to carry on their business. The payments were nothing but supplementary trade receipts. It is true that the assessee could not use this money for distribution as dividend to its shareholders. But the assessee was free to use the money in its business entirely as it liked and was not obliged to spend the money for a particular purpose like extension of docks as in the Seaham Harbour Dock Co. 5 case (supra). 16. There is a Canadian case St. John Dry Dock Ship Building Co. Ltd. v. Minister of National Revenue 4 DLR 1, which has close similarity to the case of Seaham Harbour Dock Co. 's case (supra). In that case it was held that where subsidies were given under statutory authority, the statutory purpose for which they are authorised is relevant and may even be decisive in determining whether it is taxable income in the hands of the recipient. In that case, it was pointed out after discussing the Seaham Harbour Dock Co. 's case (supra)as well as that of Lincolnshire Sugar Co. Ltd. 5 case (supra)that subsidy given by the Canadian Government to encourage construction of dry docks was 'an aid to the construction of dry dock and not an operational subsidy'. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entive Scheme (Incentives offered by the Government of Gujarat under the New Incentive Policy Capital Investment Incentive (General) Scheme 1995 2000), forming part of the paper book from pages 553 575, we find that the said scheme was to accelerate the development of the backward areas of the State and to create large scale employment opportunities. Further, under the said scheme, it was also stressed that the need is to increase the total flow of investment to the industrial sector with the proper development of infrastructure and human resources to sustain long term growth and achieve sustainable development. From the perusal of the eligibility certificate issued under the aforesaid scheme, forming part of the paper book on page 577, we find that the same also mentions the total investment in fixed assets by the assessee. Therefore, in view of the above, we find that the sales tax exemption scheme of the Government of Gujarat is of the nature similar to the schemes considered by the coordinate bench in the earlier years, and thus, sales tax exemption received under this scheme is in the nature of capital receipt. 59. As regards the Punjab Industrial Incentive Code under the Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, during the assessment proceedings, the assessee was asked to show cause as to why the depreciation should be allowed on the let out property. In response thereto, the assessee submitted that under the block concept once an asset is added to the block of assets it loses its identity, and depreciation on a particular asset cannot be worked out separately. It was further submitted that adjustments to the block of assets can be made only in accordance with the provisions of section 43(6) of the Act. The assessee also placed reliance upon the CBDT Circular No. 469 dated 23/09/1986. The AO, vide assessment order passed under section 143(3) of the Act, did not agree with the submissions of the assessee and held that the assessee has claimed depreciation on the let out premises and is also claiming a deduction equal to 30% of annual rental value while computing income from house property. The AO held that the assessee cannot be allowed both deductions and therefore proceeded to compute the disallowable part of depreciation. 20. The learned CIT(A), vide impugned order, dismissed the ground raised by the assessee on this issue. Being aggrieved, the assessee is in appeal before us. 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed (i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed; (ii ) in the case of any block of assets, such percentage on the written down value thereof as may be prescribed: .. Explanation 2. For the purposes of this sub-section written down value of the block of assets shall have the same meaning as in clause (c) of sub-section (6) of section 43. 26. Section 43(6)(c) of the Act reads as under:- (c) in the case of any block of assets, (i) in respect of any previous year relevant to the assessment year commencing on the 1st day of April, 1988, the aggregate of the written down values of all the assets falling within that block of assets at the beginning of the previous year and adjusted, (A) by the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 24 of the Act. In this regard, it is pertinent to note that the property in question forms part of the block of assets since the assessment year 1987-88 and the depreciation on the entire block was also allowed. The Revenue has also not disputed this fact. It is settled that once any asset forms part of the block of assets, it losses its individual identity, and thus for the purpose of depreciation, only the block of assets has to be considered. This aspect is sufficiently evident from Circular No.469 issued on 23/09/1986, which reads as under:- 6.3 As mentioned by the Economic Administration Reforms Commission (Report No. 12, para 20), the existing system in this regard requires the calculation of depreciation in respect of each capital asset separately and not in respect of block of assets. This requires elaborate book-keeping and the process of checking by the Assessing Officer is time consuming. The greater differentiation in rates, according to the date of purchase, the type of asset, the intensity of use, etc., the more disaggregated has to be the record-keeping. Moreover, the practice of granting the terminal allowance as per section 32(1)(iii) or taxing the balancing char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is to be directed to maintain the details of each asset separately and that would frustrate the very purpose for which the amendment was brought about. It is also essential to point out that the revenue is not put to any loss by adopting such method and allowing depreciation on a particular asset, forming part of the 'block of assets' even when that particular asset is not used in the relevant assessment year. Whenever such an asset is sold, it would result in short-term capital gain, which would be exigible to tax and for this reason, we say that there is no loss to revenue either. 29. Thus, in view of the above, once the property forms part of the block of assets, carving out the depreciation for the said property and disallowing the same goes against the spirit of allowing depreciation on the entire block of depreciable assets. Before concluding, we may note that in this appeal the Revenue has not disputed the claim of deduction under section 24 of the Act in respect of the property which forms part of the block of assets. Thus, merely because the Revenue has accepted the claim of deduction under section 24 of the Act doesn t mean that the property which forms part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be considered as derived from industrial undertaking and thus, the assessee is not entitled to claim deduction under section 80IA of the Act on such receipts. 39. The learned CIT(A), vide impugned order, granted partial relief to the assessee and directed the AO to include excess provisions written back as business profits for the purpose of computing deduction under section 80IA of the Act. While in respect of other receipts included the head ―Miscellaneous Receipts , the findings of the AO excluding the same from the business profit was upheld. Being aggrieved, the assessee is in appeal before us. 40. We have considered the submissions of both sides and perused the material available on record. We find that similar issue came up for consideration before the coordinate bench of the Tribunal in assessee s own case for the assessment year 2004-05. The coordinate bench, vide order dated 23/06/2023 cited supra, restored this issue to the file of the AO for de novo adjudication, by observing as under: 49. We have considered the submissions of both sides and perused the material available on record. In the year under consideration, the assessee included miscellaneous recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.10, raised in assessee s appeal, is pertaining to the taxability of interest received from the Income Tax Department. 43. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench of the Tribunal, vide order dated 13/06/2023, passed in assessee s own case for the assessment year 2003 04 cited supra, while deciding similar issue in favour of the assessee by following the decision rendered in the preceding year, observed as under: 15. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench of the Tribunal, vide order dated 14/12/2021, passed in assessee s own case for the assessment year 2002 03 cited supra, by following the decision rendered in the preceding year, observed as under: 15. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - 7. The assessee is also aggrieved for taxing of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (A) ] on the following additional grounds: 1. The learned CIT (A) ought to have held that the sum of Rs. 2,68,71,018 being dividend received from Alexandria Carbon Black Company, a company incorporated and registered in Egypt (U.A.R.) was not taxable in India. The appellant craves leave to add, to alter, amplify or delete all or any of the ground (s) before or at the time of hearing. 47. The issue arising in the aforesaid additional ground of appeal is pertaining to the taxability of dividend received from Egyptian company. Since, the issue raised by way of additional ground is a legal issue, which can be decided on the basis of material available on record, we are of the view that the same can be admitted for consideration and adjudication in view of the ratio laid down by the Hon ble Supreme Court in NTPC v/s CIT, [1998] 229 ITR 383 (SC). During the year under consideration, the assessee received Rs. 2,68,71,018, as a dividend from M/s Alexandria Carbon Black Company S.A.E., a company incorporated and registered under the laws of Egypt (U.A.R.). It is the plea of the assessee that the aforesaid dividend received from the Egyptian company is not taxable in India. 48. We find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articular intent and objective of the Government of India, as understood during the course of negotiations leading to formalization of treaty. Therefore, such a notification has to be reckoned as clarificatory in nature and hence interpretation given by Govt. of India through this notification will be effective from 1 st April 2004, i.e., from the date when provision of section 90(3) was brought in the statute, giving a Legal frame work for clarifying the intent of one of the negotiating parties; 66. The coordinate bench of the Tribunal also noted the legal position as it existed prior to the aforesaid amendment as under:- 57A. If we analyse all the judgments as have been referred to above, it is evident that: Firstly, in R.M. Muthaiah (supra), the expression may be taxed has not been expressly dealt with, however, in the context of Article-6(1), wherein similar phraseology has been used, the High Court has given its decision that once it has been taxed in the foreign country, the same cannot be taxed in India. Thus, this decision in a way interprets the phrase may be treated to mean that source country has a right to tax to the exclusion of resident state; Secondly, in S.R.M. Firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te bench in the aforesaid decision was the assessment year 2003-04, the coordinate bench following the decision of the Tribunal in Essar Oil Ltd v/s ACIT, [2013] 42 taxmann.com 21 (Mum-Trib.) came to the conclusion that the amendment w.e.f 01/04/2004, by which sub-section (3) to section 90 has been brought in the statute, whereby there was a clear departure from the earlier position, is not applicable to that year. However, since the amendment vide Finance Act, 2003 to section 90 was held to be effective from 01/04/2004 and thus applicable from the assessment year 2004-05, therefore the year under consideration will be governed by the aforesaid amended provisions and Notification no. 91 of 2008 dated 28/08/2008 issued under section 90(3) of the Act is also applicable. We find that the coordinate bench of the Tribunal in Technimont (P.) Ltd. v/s ACIT, [2020] 116 taxmann.com 996 (Mumbai - Trib.), after taking into consideration the aforesaid amendment observed as under:- 10 . It may be recalled that, with effect from 1st April 2004, a new sub-section 3 was inserted in Section 90, and this new sub-section provided that (a)ny term used but not defined in this Act or in the agreement re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on so reached by the coordinate bench in the preceding year. Therefore, respectfully following the aforesaid decision, the additional ground raised by the assessee vide application dated 23/01/2013 is dismissed. 50. The assessee, vide application dated 06/02/2015, sought admission of the following additional grounds of appeal: 1 On the facts and the circumstances of the case and in law the learned AO erred in not treating TUF subsidy of Rs. 0.71 Cr as capital receipt and not chargeable to tax. 2 The Appellant prays that the learned AO be directed to increase the deduction allowed to the assessee on account of interest cost by Rs 0.71 Cr being TUF subsidy deducted from interest cost claimed during the year. 3 The Appellant craves leave to add and/or to amend and/or to alter the above Ground of Appeal. 51. The issue arising in the aforesaid additional ground of appeal is pertaining to treating the subsidy received by the assessee under Technology Upgradation Fund ( TUF ) Scheme as capital receipt and thus not chargeable to tax. Since, the issue raised by way of additional ground is a legal issue, which can be decided on the basis of material available on record, we are of the view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt. The coordinate bench held as under:- 8. Ground No. 11: 11. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in directing to treat the interest subsidy of ₹ 15,23,25,727/- as capital in nature. 38.1 In ground No.11 the Revenue has assailed the findings of CIT(A) in holding interest subsidy from Technology Up gradation Fund(TUF) ₹ 15,23,25,727/- as capital in nature. The ld. Authorized Representative for the assessee submitted that the Hon ble Rajasthan High Court in the case of PCIT vs. Nitin Spinners Ltd. in DB Income Tax appeal No.31/2019 decided on 19/09/2019 has held subsidy received under TUF as capital in nature. Similar view has been taken by Mumbai Tribunal in the case of ACIT vs. SVG Fashions Ltd. in ITA No.704/Mum/2016 for assessment year 2012-13 decided on 17/07/2018. The ld. Authorized Representative for the assessee to further buttress his submissions placed reliance on the following decisions:- (1) CIT vs. Gloster Jute Mills Ltd. ,96 taxmann.com 303 (Cal) (2) CIT vs. Sshyam Lal Bansal, 200 Taxman 14 (P H) 38.2 The ld. Authorized Representative for the assessee further submitted that CIT(A) has decided this issue afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following additional grounds of appeal: 3.1 On the facts and the circumstances of the case and in law, the learned AO erred in treating Education cess as disallowable expenditure under Section 40(a)(ii) of the Act. 3.2 The Appellant prays that the learned AO be directed to allow deduction of Education Cess while computing the total income of the Appellant. 3.3 The Appellant craves leave to add and/or to amend and/or to alter the above Ground of Appeal. 55. The issue arising in the aforesaid additional grounds of appeal is pertaining to the disallowance of Education Cess under section 40(a)(ii) of the Act. Since the issue raised by way of additional ground is a legal issue, which can be decided on the basis of material available on record, we are of the view that the same can be admitted for consideration in view of the ratio laid down by the Hon'ble Supreme Court in NTPC v/s CIT, [1998] 229 ITR 383 (SC). 56. We find that Finance Act, 2022, with retrospective effect from 01/04/2005, inserted Explanation 3 to section 40(a)(ii), whereby it has been provided that the term 'tax' shall include and shall be deemed to have always included any surcharge or cess, by whatever name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of exempt dividend income by relying upon his decision for earlier years without appreciating that the same have not been accepted by the department by filing an appeal with the ITAT. 6. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the AO not to reduce the claim of deduction of Rs. 1,00,90,705/- u/s. 80-IA by relying upon his earlier orders on the issue for Asst. Years 1996-97 to 2003-04 without appreciating that the department had not accepted the same by filing an appeal to the ITAT. 7. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the AO to allow deduction of Rs. 25,71,93,534/- u/s. 80-IA in respect of profits of Rail System Raipur and Hotgi by relying upon his decision for the AYrs. 2003-04 without appreciating that the department has not accepted the same by filing an appeal with the ITAT. 8. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 59. The issue arising in ground no.1, raised in Revenue s appeal, is pertaining to deletion of disallowance under section 43B of the Act. 60. Having considered the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in the preceding years. Therefore, respectfully following the judicial precedent in assessee s own case cited supra, ground no.1, raised in Revenue s appeal is dismissed. 61. In the absence of any allegation regarding the change in facts or in law in the present case, we find no reason to deviate from the conclusion so reached by the coordinate bench in the preceding year. We find that this issue is recurring in nature and has been decided in favour of the assessee in the preceding years. Therefore, respectfully following the judicial precedent in assessee s own case cited supra, ground no.1, raised in Revenue s appeal is dismissed. 62. The issue arising in ground no.2, raised in Revenue s appeal, is pertaining to deletion of disallowance towards contribution to local organization. 63. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench of the Tribunal, vide order dated 13/06/2023, passed in assessee s own case for the assessment year 2003 04 cited supra, while deciding similar issue in favour of the assessee by following the decision rendered in the preceding year, observed as under: 78. Having consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deviate from the conclusion so reached by the coordinate bench in the preceding year. We find that this issue is recurring in nature and has been decided in favour of the assessee in the preceding years. Therefore, respectfully following the judicial precedent in assessee s own case cited supra, ground no.2, raised in Revenue s appeal is dismissed. 65. The issue arising in ground no.3, raised in Revenue s appeal, is pertaining to the deletion of disallowance on account of rural development expenses. 66. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench of the Tribunal, vide order dated 13/06/2023, passed in assessee s own case for the assessment year 2003 04 cited supra, while deciding similar issue in favour of the assessee by following the decision rendered in the preceding year, observed as under: 83. Having considered the submissions of both sides and perused the material available on record, we find that the coordinate bench, vide order dated 14/12/2021, passed in assessee s own case for the assessment year 2002 03, while following the decision rendered in the preceding year, decided the similar i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial available on record, we find that the coordinate bench of the Tribunal, vide order dated 13/06/2023, passed in assessee s own case for the assessment year 2003 04 cited supra, while deciding similar issue in favour of the assessee by following the decision rendered in the preceding year, observed as under: 97. Having considered the submissions of both sides and perused the material available on record, we find that the Coordinate bench, vide order dated 14/12/2021, passed in assessee s own case for the assessment year 2002 03, while following the decision rendered in the preceding year, decided the similar issue in favour of the assessee by observing as under: 94. Considered the submissions and material placed on record, we observe from the record that identical issue is decided in favour of the assessee for the A.Y. 2001-02 in favour of the assessee. While deciding the issue in favour of the assessee the Coordinate Bench of the Tribunal in ITA.No. 4083/Mum/2003 dated 22.10.2014 held as under: - 47. The issue in ground No. 13 with regard to deleting the disallowance of expenses incurred for making advertisement films has been dealt with by the A.O. at page 15-16, para 26. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e incurred for earning tax-exempt dividend income. The AO, vide assessment order passed under section 143(3) of the Act, computed the disallowance of Rs. 1,31,93,113, as expenditure incurred for earning exempt income as per section 14A of the Act. 73. The learned CIT(A), vide impugned order, following the judicial precedents rendered in assessee s own case deleted the disallowance made by the AO under section 14A of the Act. Being aggrieved, the Revenue is in appeal before us. 74. Having considered the submissions of both sides and perused the material available on record, it is evident from the Balance Sheet of the assessee as no 31/03/2005, forming part of the paper book on Page 71, that the assessee has share capital and reserves surplus of Rs. 4328.35 crore, while the investment made is of Rs. 2982.05 crore during the year. Therefore, it is sufficiently evident that during the year under consideration, the assessee's own funds are more than investments, including the investments for earning exempt income. We including the investments find that the Hon'ble Jurisdictional High Court in CIT vs HDFC Bank Ltd., [2014] 366 ITR 505 (Bom.) held that where assessee's own fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee s own case in its favour in assessment years 1994-95 to 1998-99 and the Department is not in appeal against the order of the Tribunal. Respectfully following the order of the Tribunal, we do not find any reason to interfere with the order of ld. CIT(A) on this issue.. 110. Respectfully following the above decision, we do not find any reason to interfere with the order of the Ld.CIT(A) and dismiss the ground raised by the revenue. We order accordingly. 110. The learned DR could not show us any reason to deviate from the aforesaid decision rendered in assessee s own case and no change in facts and law was alleged in relevant assessment year. This issue has been decided in favour of the assessee in the preceding years also. Therefore, respectfully following the judicial precedent in assessee s own case cited supra, ground no.9, raised in Revenue s appeal is dismissed. 77. In the absence of any allegation regarding the change in facts or in law in the present case, we find no reason to deviate from the conclusion so reached by the coordinate bench in the preceding year. We find that this issue is recurring in nature and has been decided in favour of the assessee in the preceding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that there was option available u/s 801A with the appellant to claim deduction for any 10 consecutive years at its own choice. The appellant has opted for claiming the deduction from AY2003-04 onwards. The income offered for tax by the appellant includes income from Rail System. 16.5 The appellant further submitted that the Rail System is a 'Profit Centre'. The Rail System is engaged in business of providing transportation facility to the cement plant, profit of which is embedded in the profit of the appellant company as a whole. By developing this infrastructure facility, there has been a saving in transportation cost and all over profits of the Company has increased due to such savings. All the businesses of the appellant company are interconnected. interlaced and there is common management, funds and control. Profits of the Rail System are embedded in the overall profit of the company. In support of contention that treatment of a transaction in books of account cannot govern the tax statement, the appellant relied on the decisions of the Supreme Court 82 ITR 363 Kadernath Jute Mfg. Co. Ltd Vs. CIT and 227 ITR 172 Tuticurin Alkali Chemical Ltd. 16.6 The appellant fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has started operating and maintaining the infrastructure facility after 1st April 1995. 16.9 The appellant submitted that there is no basis on which the Assessing Officer has mentioned that the legislature's intention was to cover organisations like Konkan Railway, Delhi Metro Corporation, etc. There is no such specific mention in the Act. The appellant relied on the decision of the Bajaj Tempo Ltd vs CIT 156 ITR 188(SC). 16.10 Regarding maintenance of separate books of account, the appellant submitted that there is no such condition for grant of tax holiday benefit. Although separate books of account are not maintained, profit of the eligible business has been computed based on the memorandum books of account and other details maintained by the appellant. The Balance Sheet and Profit Loss account of the eligible business has been audited by the Chartered Accountant. The appellant has filed along with its Return of Income the form No. 10CCB, duly audited, as per the provisions of Section 801A(7). In the case of CIT vs Dunlop Rubber Co (1) Ltd. 107 ITR 182 (Cal.) it was held that for the purpose of tax holiday benefits it is not necessary that the eligible unit must maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rail system does not have any agreement with the authorities mentioned above. On the contrary, the learned DR though agreed that the assessee has entered into an agreement with South-Eastern Railway administration on 10/04/2000 for the Rail System at Rawan District, Raipur, however, submitted that the same is subsequent to the commencement of operations on 25/09/1999. The learned DR also submitted that since the infrastructure facility was made operational during the financial year 1999-2000, therefore, the claim of benefit under section 80-IA for the alleged infrastructure facility is to be examined as per the provisions of the Act relevant for the financial year 1999-2000. The learned DR also submitted that as per the provisions of section 80-IA (4)(i)(b) of the Act, as applicable for the financial year 1999-2000, such undertaking was required to be transferred to the Central Government, State Government, local authority or such other statutory body. However, the agreement dated 10/04/2000 does not have any such clause and therefore the same is not in conformity with the provisions of the Act. From the perusal of the record, it is evident that aforesaid submissions made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995: 126. We find that all the aforesaid conditions are satisfied in the present case for claiming deduction under section 80-IA of the Act. As regards the submission of the learned DR that the assessee has constructed a private siding for captive use, we find that similar submission was rejected by the coordinate bench of the Tribunal in the case of assessee s subsidiary company in UltraTech cement Ltd (supra), vide order dated 14/12/2021. Further, even though the agreement was entered on 10/04/2000, and the operations commenced in September 1999, it is pertinent to note that the parties to the agreement have honoured the said agreement, and the rights granted therein were not revoked for this reason and the said agreement was still valid in the year under consideration. In view of the aforesaid findings and respectfully following the decision of the coordinate bench cited supra, we find no infirmity in the impugned order allowing deduction under section 80-IA of the Act to the assessee in respect of profits from the rail system. As a result, ground no.11 raised in Revenue s appeal is dismissed. 108. The learned DR made similar submissions, as were made in the preceding assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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