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TMI Blog2023 (5) TMI 1417X X X X Extracts X X X X X X X X Extracts X X X X ..... justment u/s.92CA(3) - corporate guarantee fees - CIT(A) deleted addition - HELD THAT:- This issue was consistently decided in favour of the assessee by the ITAT right from Asst.Year 2008-09 to 2011-12 and even in Asst.Year 2015-16. Copies of all these orders were placed before us. It was also pointed out that the issue was covered by the decision of Micro Ink [ 2015 (12) TMI 143 - ITAT AHMEDABAD] wherein it was held that the issuance of corporate guarantee did not constitute international transactions and no TP adjustment is liable to made. Thus, no reason to interfere in the order of the CIT(A) deleting upward adjustment. Disallowing employee's contribution towards PF and ESIC u/s 36(1)(va) r.w.s.2(24)(x) - HELD THAT:- Since the issue stands settled and decided against the assessee in view of the decision in the case of Checkmate Services P.Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] wherein it has been held that the provision of section 36(1)(va) of the Act warrants addition to the income of the assessee to the extent of amount so delayed to be deposited in the relevant funds. The ground raised by the assessee are accordingly dismissed. Disallowance of expenditure incurred for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment made relates to addition made to the Book Profits of the expenses incurred for the purpose of earning exempt income which were disallowed asper the provisions of section 14A of the Act. The assessee had made a suo moto disallowance of a sumof Rs.20,45,90,406/- under section 14A of the Act calculated as per the formula prescribed in Rule 8D of the Income Tax Rules, 1962. However, the same was not added back while calculating the book profits under section 115JB of the Act. The AO accordingly added back this sum to the book profit of the assessee under section 115JB of the Act, which was deleted by the ld.CIT(A) noting that identical adjustment of expenses disallowed under section 14A of the Act to the book profit of the assessee was deleted by the ITAT in the case of the assessee itself in earlier year i.eAsst.Year 2010-11. The relevant finding of the ld.CIT(A) at para 4.3 of his order is as under: 4.3 Decision: I have considered the facts of the case, submissions made by the appellant and the Assessment Order. The appellant while filing the return of income suo motu disallowed a sum of Rs.20,45,90,4067-u/s 14A computed as per formula provided in Rule 8D of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of disallowance of expenses under section 14A of the Act is settled in view of the decision of Hon ble jurisdictional High Court in the case of Alembic Ltd. (supra) and by the decision of the Special Bench of the ITAT in the case of ACIT Vs. Vireet Investment P.Ltd., (2017) 165 ITD 27 (Delhi-Trib) (SB). 7. In view of the above, since ITAThas been consistently deleting the adjustment made to the book profits under section 115JB of the Act on account of disallowance of expenses as per the provision of section 14A of the Act in the case of the assessee itself right from AY 2009-10 TO 2011-12 and even in Asst.Year2015-16 considering the decision of the jurisdictional High Court in the case of Alembic Ltd. (supra) and the decision of the Special Bench of the ITAT in the case of Vireet Investment P.Ltd., and the fact that the ld.DR being unable to distinguish the decisions cited (supra) to the facts of the present, we see no reason to interfere in the order of the ld.CIT(A) deleting the adjustment made to the book profits of the assessee on account of expenses disallowed under section 14A of the Act amounting to Rs.20,45,90,406/- following the consistent view taken by the ITAT in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted ALP of guarantee fee at the rate of 2% of the guarantees expenditure, and accordingly, an upward adjustment of Rs.4,15,67,693/- was made. The ld.CIT(A) however deleted the adjustment noting that the issue was squarely covered in favour of the assessee by the decision of the ITAT in the case of the assessee itself in the preceding year i.e.Asst.Year 2008-09, 2009-10 and 2010-11. The relevant finding of the ld.CIT(A) at para 7.4 of his order is as under: 7.4 Decision: I find that the issue is squarely covered in the appellant's own case in favour of the appellant by the judgment of Hon'ble ITAT, Ahmedabad in A.Y.2008-09, 2009-10 2010-11. The judgment of Hon'ble ITAT in the asessee's own case in A.Y.2009-10 was delivered on 22/12/2017 in ITA No.2074/Ahd/2013 wherein the Honb'le Bench taking note of the issue pending with jurisdictional High Court in the case of Micro Ink Ltd. [2015] 63 taxmann.com 353 (Ahmedabad- Trib.) have allowed the assessee's appeal following their earlier judgments in asessee's own case in relation to A.Y.2008-09, order dated 21/04/2017. The relevant excerpts of the judgment are reproduced as below: 6. We see no reasons to take an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees Provident Funds Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948. 17. The only issue raised by the assessee in its CO is relating to confirmationof addition made by the AO under section 36(1)(va) of the Act on account of delayed payment of employees contribution to PF and ESI funds; the total amount disallowed pertaining to the same is Rs.29,94,862/-; being Rs.17,63,251/- on account of delayed payment of employees contribution to PF and Rs.12,31,611/- on account of delayed payment employees contribution to ESI fund. 18. The ld.counsel for the assessee was unable to controvert the facts relating to the case that the employees contribution to both the ESI and PF was delayed and paid beyond the due dates prescribed as per the respective Acts. In view of the above, the assessee, we hold, has no merit in its case, since the issue stands settled and decided against the assessee in view of the decision by the Hon ble Apex Court in the case of Checkmate Services P.Ltd. Vs. CIT, 143 taxmann.com 178 (SC) dated 12.10.2022 wherein it has been held that the provision of section 36(1)(va) of the Act warrants addition to the income of the assessee to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot exceed the exempt income, I find that the issue is squarely covered by the ratio of this judgment of the jurisdictional High Court in the case of M/s. Corrtech Energy Ltd. (supra). Now, the issue is whether appellant having made the disallowance suo-motu can claim reduction in the returned income to the extent of this disallowance before the assessing authority or appellate authorities. This is undisputed fact that appellant computed the disallowance as per section 14A of the Act r.w.r. 8D of the Rules. In this regard appellant has placed reliance on various judgments as noted in para 4.1 above. In the case of CIT-'I v. Arvind Mills Ltd., the Hon'ble High Court of Gujarat has dealt with the issue and held the following: . 4. As the facts on record show that the AO himself had found the claim of the assessee to be genuine. He did not grant relief on the basis that the claim could have been considered only on filing of a revised return. The appellate commissioner on the basis of the Supreme Court decision in Ajanta (supra)allowed the claim which was admittedly a genuine one and tribunal ultimately upheld the same. 5. As such in Goetze (supra) the Supreme Court while d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-tax (supra) and that is how various High Courts have viewed the dictum of the decision in the case of Goetze (India) Ltd. v. Commissioner of Income-tax (supra). When it comes to the power of Appellate Commissioner or the Tribunal, the Courts have recognized their jurisdiction to entertain a new ground or a legal contention. A ground would have a reference to an argument touching question of fact or a question of law or mixed question of law or facts. A legal contention would ordinarily be a pure question of law without raising any dispute about the facts. Not only such additional ground or contention, the Courts have also, as noted above, recognized the powers of the Appellate Commissioner and the Tribunal to entertain a new claim for the first time though not made before the assessing officer. Income Tax proceedings are not strictly speaking adversarial in nature and the intention of the Revenue would be to tax real income. 39. This is primarily on the premise that if a claim though available in law. is not made either inadvertently or on account of erroneous belief of complex legal position, such claim cannot be shut out for all times to come, merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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