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THE INCOME TAX APPELLATE TRIBUNAL “J” Bench, Mumbai Shri Shamim Yahya (AM) & Shri Pavan Kumar Gadale (JM) I.T.A. No. 7029/Mum/2018 (Assessment Year 2013-14) I.T.A. No. 3307/Mum/2019 (Assessment Year 2014-15) DCIT-8(3)(2) Voltas Limited Aayakar Bhavan Vs. Voltas House “A” Floor Room No. 615 Dr.Baba Saheb Ambedkar M.K. Road Road, Chinchpokali Mumbai-400 020. Mumbai-400 033. (Appellant) (Respondent) I.T.A. No. 6613/Mum/2018 (Assessment Year 2013-14) I.T.A. No. 2257/Mum/2019 (Assessment Year 2014-15) Voltas Limited DCIT-8(3)(2) Voltas House “A” Floor Vs. Aayakar Bhavan Dr.Baba Saheb Ambedkar Room No. 615 Road, Chinchpokali M.K. Road Mumbai-400 033. Mumbai-400 020. (Appellant) (Respondent) Assessee by Shri Nitesh Joshi Department by Shri Vodal Raj Date of Hearing 28.09.2020 Date of Pronouncement 06.10.2020 O R D E R Per Shamim Yahya (AM) :- These are cross-appeals by assessee and Revenue arising out of the respective orders of learned CIT(A) pertaining to assessment year 2013-14 & 2014-15. 2. Since issues are common and the appeals were heard together these are being consolidated and disposed of by this common order. 3. One common issue raised in these appeals relate to the direction of learned CIT(A) to not consider the asset which did not yield income for computation of average value of investment under Section 14A of the 2 Voltas Limited Income Tax Act, 1961 (in short the Act'). The assessee is also aggrieved by the further disallowance under Section 14A of the Act. The assessee's contention is that assessee had its own offered Rs. 25 lacs as disallowance under Section 14A being operating and administrative expenses, which could be considered towards earning exempt dividend income. The Assessing Officer in these cases had made deduction at 0.5% of the administrative expenses under Rule 8D(ii) for A.Y. 2013-14 Rs. 1,89,80,535/- and for A.Y. 2014-15 Rs. 2,36,37,832/-. 4. Upon assessee’s appeal learned CIT(A) held that the Assessing Officer is to follow applicable portion in decision in paragraph 6 of appellate order for A.Y. 2012-13 dated 5.9.2018. This learned Counsel of the assessee has contended that learned CIT(A) has disallowed 0.5% of average investment excluding investment which did not earn taxable income. 5. We have heard both the counsel and perused the records. The learned counsel for the assessee submitted that identical issue was decided by the Tribunal in assessee's own case for the earlier assessment year. He submitted that Tribunal in the said decision had remitted the matter to the file of Assessing Officer. Per contra, the learned Departmental Representative did not dispute the proposition that same issue was considered by the Tribunal. 6. We note that in earlier year, ITAT in assessee's own case for assessment year 2010-11 & 2011-12 has noted that in the earlier order Tribunal has directed the Assessing Officer to examine the sufficiency or correctness of allowance made by the assessee having regard to assessee's accounts and explanations. The Tribunal had further noted that to maintain the consistency, the matter was being remitted to the file of Assessing Officer with same direction. The Tribunal also directed to take into account the order of Tribunal Special Bench in the case of ACIT vs. Vireet Investments (P) Ltd. Here we also make it 3 Voltas Limited clear that we are not acceding to the request of learned Counsel of the assessee to delete the entire disallowance for lack of satisfaction by the Assessing Officer. The Assessing Officer has dealt with the issue with reasonable details and only for the sake of consistency we are following the earlier Tribunal direction. 7. Accordingly, we find on the same issue, the Tribunal in assessee's own case, has remitted the matter to the file of Assessing Officer and also directed to take into account the decision of Special Bench of Tribunal as aforesaid. Following the aforesaid precedent, we also remand this issue to the file of Assessing Officer with same direction. 8. Another common issue raised in Revenue's appeal relates to correctness of learned CIT(A)'s order deleting interest charged of Rs. 1,93,36,127/- for A.Y. 2013-14 and Rs. 2,03,76,227/- for A.Y. 2014-15 on the share application money given by the assessee to the Associated Enterprise by the Transfer Pricing Officer (TPO). 9. Brief facts on this issue as that after the Assessing Officer made the disallowance as per TPO order. Upon assessee’s appeal learned CIT(A) held as under :- For A.Y. 2013-14 :- Similar matter covered under sub-ground (i) and (ii) were considered and decided for A.Y. 2012-13 vide appellate order dated 5.9.2018. Facts and circumstances being identical same decision applies on account of same reasons. Accordingly, sub-ground (i) is partly allowed and (ii) is allowed. For A.Y. 2014-15 :- Most of the grounds are decided upon by me in preceding AYs (A.Y. 2011- 12, 2012-13 and 2013-14) on identical facts and circumstances. Wherever, facts and circumstances is identical, on account of same reasons recorded in respective assessment orders, the same decision applies. In view of above the following decision is taken :- 4 Voltas Limited A. Ground No. 1.1 : It is partly allowed with addition upheld in principle but interest is to applied at US$ LIBOR rate+ 3% mark up. B. Ground No. 1.2 : It is allowed. The Assessing Officer is directed to delete the addtion. C. Ground No. 2 : To follow applicable portion in decision in paragraph 6 of appellate order for A.Y. 2012-13 dated 5.9.2018. The ground is partly allowed. D. Ground No. 3 : To follow same directions as in paragraph 8 of appellate order for A.Y. 2013-14. E. Ground No. 4 : It is allowed. The Assessing Officer is directed to delete the addition. 10. We note that this issue is also covered by the ITAT order in assessee's own case for assessment year 2010-11 & 2011-12. With respect to the same amount given to the Associated Enterprise, which were in shape of share application money, the Assessing Officer has applied interest on the amount advanced treating it as share application money. This was deleted by the learned CIT(A). On cross-appeal by the assessee and Revenue, Tribunal had held that the undisputed position that emerges is the fact that assessee has advanced share application money to one of its Associated Enterprise to acquire further stake in that entity. That the Associated Enterprise has become wholly- owned subsidiary of the assessee-company during the month of January, 2009. That the financial health of the Associated Enterprise was not good and the money was advanced in view to infuse further capital in the Associated Enterprise with a view to acquire controlling stake. The money was utilised by the Associated Enterprise for the purpose of business and to meet working capital requirement. The Tribunal further noted that ultimately the shares have been allotted to the assessee during December, 2015 after getting the desired regulatory approvals. The Tribunal accepted that the delay was genuine and was substantiated. In these facts, ITAT agreed with the view that the amount cannot be treated as loan transaction. In this regard, the Tribunal also referred to the decisions of Hon'ble Bombay High Court in the case of Pr. CIT vs Aegis Ltd. It also referred to the decision of Madras Bench of 5 Voltas Limited Tribunal in the case of Pane Biscuits Ltd. Accordingly, ITAT held that the transfer pricing adjustment in this regard, proposed by the TPO, was to be deleted. 11. We find that since on the same transaction during the current assessment year, TPO has made an adjustment as referred above. The learned CIT(A) has correctly deleted the same by noting that on the same transaction of share application money to the Associated Enterprise, on which interest was charged, the Tribunal had deleted the addition. In these circumstances, in our considered opinion, there is no infirmity in the order of learned CIT(A). Hence, we uphold the same. 12. Before parting we may add that as evident from the above the order of the learned CIT(A) is extremely cryptic and a non-speaking order. It is settled law that even administrative orders also have to the consistent, the principles of natural justice. This mandates a proper and speaking order, which learned CIT(A) has miserably failed to effectuate. 13. Another common issue raised in assessee's appeal relates to interest on outstanding amount to the Associated Enterprise. At the outset, in this regard the learned counsel for the assessee contended that he shall not be pressing the ground raised in this regard. 14. Accordingly, we dismiss this ground raised as not pressed. 15. Another common issue raised relates to transfer pricing adjustment on commission on corporate guarantee. 16. The Assessing Officer in this case has noted that the assessee has extended corporate guarantee with bank in the UAE on behalf of the its Associated Enterprises. Since the assessee had not charged any fees in this regard the Assessing Officer proceed to refer to the normal guarantee fees charged by the bankers and adopted rate of 1.5%. 6 Voltas Limited 17. Upon assessee’s appeal learned CIT(A) for A.Y. 2013-14 deleted the addition holding that no transfer pricing adjustment was required as the assessee has not charged any guarantee fees from its associated enterprises and hence, he held that the corporate guarantee is not bank guarantee.

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