Section 14A disallowance should be as per Rule 8D Calculation Method

Reetu | Nov 5, 2020 |

Section 14A disallowance should be as per Rule 8D Calculation Method

Section 14A disallowance should be as per Rule 8D Calculation Method

IN THE INCOME TAX APPELLATE TRIBUNAL

The Relevant Text of the Order as follows :

75. On the other hand, ld. DR relied on the orders of authorities below.

76. This issue has also been decided by us while deciding the appeal of the assessee for A.Y.2009-2010 in ITA No.338/CTK/2017, wherein we have observed that the issue is squarely covered by the decision of the Tribunal in assessee’s own case in ITA Nos.106& 110/CTK/2018, order dated 23.09.2019, wherein the Tribunal has followed its earlier order dated 29.06.2018, passed in No.211/CTK/2017, thereby restoring the issue to the file of AO further verification and examination of the issue. Thus, we direct the AO to examine as to whether the payment has been made towards leave encashment during the financial year 2015-2016 as claimed by the assessee before us and decide the issue as per law. Accordingly, the issue raised in ground No.3 being similar to the issue decided by us in ITA No.338/CTK/2017, therefore, our observations made therein shall apply mutatis mutandis to this ground also. Thus, ground No.4 is allowed for statistical purposes.

77. Thus, the appeal of the assessee in ITA No.01/CTK/2020 is allowed for statistical purposes.

78. Now, we shall take up the appeal of the Revenue filed for assessment year 2016-2017 in ITA No.65/CTK/2020, wherein the grounds raised by the Revenue read as under :-

(i) On the facts and in the circumstances of the case, the order of the Ld. CIT(A)-1, Bhubaneswar is erroneous both on facts and in law.

(ii) Whether on the facts and in the circumstances of the case and in law, the Hon’ble Tribunal is right in deleting the addition of Rs.8,56,12,086/- made on account of revaluation of non-moving stores and spares as the assessee had adopted diminution value at @ 5% of cost thereof in this assessment year 2016-17 as against 80% applied in the initial years upto AY 1998-99?

(iii) Whether on the facts and in the circumstances of the case and in law, the Hon’ble Tribunal is right in concurring with the changed method of valuation adopted by the assessee for its unmoved stores and spares which have not moved for 5 years from 20% of cost to 5% of cost accepting the estimation of the assessee that 5% of the cost thereof would be the Net Realizable Value NRV)-and- the-loss-chargeable to P&L Account as revenue loss ?

(iv) The appellant craves to alter, amend or add any other ground that may be considered necessary in course of the appeal proceedings.

79. Ground Nos.(i) & (iv) are general in nature. Ground No.(ii) & (iii) relate to deleting the addition of Rs.8,56,12,086/- made by the AO on account of disallowance of loss on revaluation of non-moving stores and spares.

80. We have already decided this issue while deciding the appeal of Revenue for assessment year 2009-2010 in ITA No.331/CTK/2017, wherein we have observed that the coordinate bench of the Tribunal in assessee’s own case in ITA No.106&110/CTK/2018, order dated 23.09.2019 has already decided the issue against the Revenue confirming the observations made by the CIT(A) thereby deleing the addition made on account of loss on revaluation of non-moving stores and spares. In this order, Tribunal has followed the decision taken in ITA No.197/CTK/2017, order dated 29.06.2018. Respectfully following the observations of the coordinate bench of the Tribunal in the said appeal, we dismiss the ground No.(ii) & (iii) raised by the Revenue.

81. Thus, the appeal of the Revenue in ITA No.65/CTK/2020 is dismissed.

82. Now, we shall take up the cross objections filed by the assessee in CO Nos.11/CTK/2019 & 08/CTK/2020, wherein the assessee has supported the order of the CIT(A). Since, we have already dismissed this ground as raised by the Revenue in its respective appeals, therefore, the grounds taken by the assessee in its cross objections for the both the years under consideration have become infructuous and the same are dismissed.

83. In the result, all the appeals of the assessee and Revenue along with the cross Objections filed by the assessee are decided in the following manner :-

i) ITA No.338/CTK/2017 filed by the assessee for A.Y.2009-2010 is partly allowed for statistical purposes;

ii) ITA No.331/CTK/2017 filed by the Revenue for A.Y.2009-2010 is partly allowed;

iii) ITA No.39/CTK/2019 filed by the assessee for A.Y.2015-2016 is allowed for statistical purposes;

iv) ITA No.69/CTK/2019 filed by the Revenue for A.Y.2015-2016 is dismissed;

v) ITA No.01/CTK/2020 filed by the assessee for A.Y.2016-2017 is allowed for statistical purposes;

vi) ITA No.65/CTK/2020 filed by the Revenue for A.Y.2016-2017 is dismissed; and

vii) CO No.11/CTK/2019 filed by the assessee is dismissed.

viii) CO No.08/CTK/2020 filed by the assessee is dismissed.

Order pronounced in the open court on 28/10/2020.

 

 

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