Assessee was engaged in the field of providing insurance & Human Resources services to its associated enterprise in UK. The Ld. AO /TPO made an addition to the income of the assessee by comparing the income of the assessee with the income of the comparable companies
AO had disallowed the expenses u/s 14A by applying the rule 8D for the A.Y 07-08 but the assessee argued and gave the supporting of the decided case law by Hon’ble High Court in its own decision in which it was decided that the sec 14A would be applicable from A.Y 08-09
ITAT Delhi has held in the case of ITO vs. M/s Factor Power Ltd that Interest Earned on Fund Raised Through Share Capital for installation of thermal power plant , which is been deposited temporarily in bank as fund were lying idle, with a motive to reduce the capital cost of thermal power plant
The Hon’ble Delhi High Court in the case of CIT vs. Om Prakash Khaitan held that In the absence of change in system of accounting consistently followed by the assessee and accepted by the department, the department cannot take different stand for the subsequent years.
ITAT Lucknow in the case of ACIT vs. M/s Northern Tannery held that The commission paid to the non- resident agent for procuring order and recovering payments on the behalf of assessee could not be treated
Delhi High Court in the case of Maithon Power Ltd. vs. CIT held that The expenditure incurred to set up operations forms the part of capital work in progress and thus, the subsequent reimbursement of any part thereof would be a capital receipt which will get reduced from the amount capitalized under the capital WIP.
ITAT Ahmedabad held in the case Madhav Corporation vs. ACIT that the assessee has earned additional income which amount is disclosed consequence upon the search, hence it partakes the character of business income.
In the case of Bhuvan Leasing and Infrastructures Vs ITO, ITAT Mumbai has held that where it is the intention of the assessee to lease out various premises and then sublet the same on leave and licence basis to different parties
In the case of En-Vision Enviro Engineers (P) Ltd. Vs DCIT, it was held that deduction u/s 80IA(4) cannot be disallowed, merely on the ground that the assessee must be owner of the infrastructure facilities and the assess should be a developer and not contractor.
In the case of ACIT vs M/s.Goel Investments Ltd., ITAT Lucknow affirmed the earlier order of ITAT in a similar case of the same assessee that once provisions of section 14A of the IT Act are to be invoked, the disallowance is to be computed as per rule 8D of the IT rules.
