TODI INDUSTRIES PRIVATE LIMITED,MUMBAI V. INCOME TAX OFFICER - 8(3)(2), MUMBAI

ITA 896/MUM/2024

AI Insights

The case involves Todi Industries Pvt. Ltd., which appealed against the order of the Commissioner of Income-tax (Appeals) upholding the Assessing Officer's disallowance of Rs. 1 crore claimed as a revenue expenditure for compensation paid to a tenant for surrendering tenancy rights. The Tribunal examined whether such compensation could be considered a business expenditure under section 37(1) of the Income-tax Act. The Tribunal's decision was influenced by previous rulings in similar cases and the specific circumstances of the tenancy agreement, including the commercial expediency of replacing a low-paying tenant with a higher-paying one.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473328 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Other Referred Cases: Goetze India Ltd v/s CIT, Shyam Burlap Co. Ltd. v. CIT, CIT v. Pruthvi Brokers & Shareholders, CIT v. Arvind Products Ltd., PCIT v. UTI Bank Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: YOGESH THAR
• Keywords: Business income; Revised return; Revenue expenditure; Business expenditure; Question of law; Depreciation; Rule of consistency; Commercial expediency; Period of limitation; TDS; Unabsorbed depreciation; Time period of passing order; Surrender of tenancy right
• Section: 250; 251; 32; 234B; 37; 244A; 37(1); 72; 80G; 139(5)

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 896/MUM/2024 (निर्धारण वर्ा / Assessment Year :2015-16) Todi Industries Pvt. Ltd. 1st Floor, Todi Estate, Sun Mill Compound, Lower Parel (W), Maharashtra- 400013 v/s. बिधम ITO-8(3)(2), Mumbai Aayakar Bhavan, M.K. Road, Maharashtra- 400020 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACT4620Q Appellant/अपीलधर्थी .. Respondent/प्रनिवधदी निर्ााररती की ओर से /Assessee by: Shri Yogesh Thar रधजस्व की ओर से /Revenue by: Shri Hemanshu Joshi सुिवधई की िधरीख / Date of Hearing 27.01.2025 घोर्णध की िधरीख/Date of Pronouncement 26.03.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 16.01.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2015-16. 2. The assessee has raised the following grounds of appeal: P a g e | 2 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. “GROUND NO. 1: DISALLOWANCE OF EXPENDITURE INCURRED BY WAY OF COMPENSATION PAID FOR SURRENDER OF TENANCY RIGHTS AMOUNTING TO RS. 1,00,00,000/-: 1.1 On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in upholding the Id. AO's action of disallowing the expenditure incurred by way of compensation paid to its tenant for surrender of tenancy rights allegedly being capital in nature. 1.2 Ld. CIT(A) further erred in holding that the said expenditure could not be treated as business expenditure and thereby disallowing the same u/s. 37(1) of the Act. 1.3 Ld. CIT(A) failed to appreciate and ought to have considered, inter-alia, that: a. business of letting out of property on rent is one of the main objects as stipulated in Memorandum of Association of the Appellant; b. income arising from business of letting out of property has been always offered and assessed to tax under the 'Profits and Gains from Business or Profession'; c. compensation paid for surrender of tenancy rights was laid out of commercial expediency and wholly & exclusively for the business purpose. 1.4 The Appellant prays that, for the above and other reasons, the disallowance of expenditure incurred by way of compensation paid for surrender of tenancy rights be deleted and the same be allowed u/s. 37 of the Act. WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE, GROUND NO. 2: ALLOWANCE OF DEPRECIATION ON COMPENSATION PAID FOR SURRENDER OF TENANCY RIGHTS AMOUNTING TO RS. 2,50,000/-: 2.1 On the facts and in the circumstances of the case and in law, the Id. AO erred in not granting depreciation u/s. 32 of the Act amounting to Rs. 2,50,000/- by holding that expenditure incurred by way of compensation paid for surrender of tenancy rights is capital in nature. 2.2 The Appellant prays that allowance of depreciation u/s 32 of the Act be granted. GROUND NO. 3: NON-GRANT OF DEDUCTION U/S. 80G OF THE ACT AMOUNTING TO RS. 4,42,000/-: 3.1 On the facts and in the circumstances of the case and in law, the Id. AO erred in not granting the deduction u/s. 80G of the Act amounting to Rs. 4,42,000/-while computing the assessed income, without assigning any reasons. 3.2 The Appellant prays that deduction u/s. 80G of the Act be granted. GROUND NO. 4: CARRY FORWARD OF UNABSORBED DEPRECIATION AMOUNTING TO RS. 8,81,190/-: 4.1 On the facts and in the circumstances of the case and in law, the Id. AO erred in not allowing to carry forward the unabsorbed depreciation amounting to Rs. 8,81,190/-. P a g e | 3 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. 4.2 The Appellant prays that carry forward of the unabsorbed depreciation u/s. 72 of the Act be allowed. GROUND NO. 5: NON-GRANT OF MAT CREDIT AMOUNTING TO RS. 6,14,510/-: 5.1. On the facts and in the circumstances of the case and in law, the Id. AO erred in not granting the MAT credit amounting to Rs. 6,14,510/-. 5.2. The Appellant prays that MAT credit u/s. 115JAA of the Act be granted. GROUND NO. 6: INCORRECT COMPUTATION OF INCOME: 6.1 On the facts and in the circumstances of the case and in law, the Id. AO erred in incorrectly computing the assessed income of the Appellant. 6.2 Ld. AO erred in considering the returned income/ (loss) at (Rs. 88,186/- instead of (Rs. 8,81,186/-) in the assessment order, resulting into assessed income being inflated by Rs. 7,93,000/- 6.3 The Appellant prays that the Id. AO be directed to consider the correct amounts and recompute the income, tax payable and tax demand. GROUND NO. 7: INTEREST U/S. 234B & 234D OF THE ACT AMOUNTING TO RS. 63,492/- AND RS. 1,00,323/- RESPECTIVELY: 7.1 On the facts and in the circumstances of the case and in law, the Id. AO erred in levying interest u/s. 2348 amounting to Rs. 63,492/- and 234D amounting to Rs. 1,00,323/- 7.2 The Appellant prays that the AO be directed to delete/ appropriately reduce the interest u/s. 234B and 234D of the Act. GROUND NO. 8: RECOVERY OF INTEREST U/S. 244A OF THE ACT AMOUNTING TO RS. 2,57,321/-: 8.1 On the facts and in the circumstances of the case and in law, the Id. AO in recovery of interest u/s. 244A amounting to Rs. 2,57,321/- granted earlier. 8.2 The Appellant prays that the AO be directed to delete/ appropriately reduce the recovery of interest u/s. 244A of the Act.” 3. Brief facts of the case are that the assessee had filed the original return declaring income of Rs. 84,26,810/- on 28.09.2015 for AY 2015-16. Subsequently, a revised return was filed at the same income claiming TDS deduction of Rs. 29,57,965/-. The return was revised once again on 31.01.2017 by filing a return declaring nil income. The case was selected for scrutiny and assessment was finalized at an income of Rs. 99,11,810/- vide order dated 21.12.2017 after making an addition on account of disallowance of Rs. 1 cr. P a g e | 4 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. claimed as a revenue expenditure on account of payment for surrender of tenancy rights. 4. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A). Ld. CIT(A) upheld the addition of Rs. 1 cr. made by the Ld. AO on account of compensation paid for surrender of tenancy rights. 5. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before the Tribunal. As many as 8 grounds of appeal are raised in this appeal. 6. Ground No. 1: Disallowance of expenditure on account of compensation paid for surrender of tenancy rights - Rs. 1 cr. 6.1 Brief facts of the issue are that the assessee had paid a compensation of Rs. 1 cr. for surrender of tenancy rights in its revised return of income. It was submitted, during the course of assessment proceedings, that the compensation had been paid to obtain the compensation from the old tenant out of business necessity and commercial expediency as the tenant was paying rent of Rs. 17,000/- per month only and a suit had been filed by the assessee in September 2014 against the said tenant due to which the tenant approached the assessee for settlement. Based on this statement, the aforesaid compensation was paid by the assessee to the tenant for vacating the premises. Thereafter, the assessee was able to find a new tenant at a substantially higher rent of Rs. 3,75,000/- per month for the same premises. P a g e | 5 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. 6.2 Before us, Ld. AR has cited several decisions wherein it has been held that the expenditure incurred by way of lump sum compensation to an existing tenant with a view to earn higher rental income from new tenants is allowable on account of commercial expediency. It has also been submitted that the issue is squarely covered in the assessee’s own case for AY 2016-17 wherein the co- ordinate bench has decided it in favour of the assessee. With regard to the question raised during the course of the hearing, regarding the applicability of the decision of the Hon’ble Apex Court in the case of Goetze India Ltd v/s CIT (2006) 284 ITR 323, Ld. AR has made the following written submissions: “1.6 ...................................................... In this regard, at the outset the Appellant Assessee humbly submits that the ld. AO has not invoked the decision of Apex Court in Goetze (India) Ltd. (supra). The ld. AO has acknowledged that Appellant Assessee has filed a revised return of income. The claim is denied on the alleged ground that the expenditure is of capital nature. The Appellant Assessee most humbly invites attention to the decision of Hon'ble Apex Court in the case of Goetze (India) Ltd. (supra) wherein it was held as under: 2. The question raised in this appeal relates to whether the appellant-assessee could make a claim for deduction other than by filing a revised return, The assessment year in question was 1995-96. The return was filed on 30-11-1995 by the appellant for the assessment year in question. On 12-1-1998, the appellant sought to claim a deduction by way of a letter before the Assessing Officer. The deduction was disallowed by the Assessing Officer on the ground that there was no provision under the Income-tax Act to make amendment in the return of income by modifying an application at the assessment stage without revising the return. 3. This appellant's appeal before the Commissioner of Income-tax (Appeals) was allowed. However, the order of the further appeal of the Department before the Income-tax Appellate Tribunal was allowed. The appellant has approached this Court and has submitted that the Tribunal was wrong in upholding the Assessing Officer's order. He has relied upon the decision of this Court in National Thermal Power Co. Ltd. v. CIT[1998] 229 ITR 383, to contend that it was open to the assessee to raise the points of law even before the Appellate Tribunal. P a g e | 6 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. 4. The decision in question is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. There shall be no order as to costs.\" In light of the foregoing, the Appellant Assessee submits that the question involved in the case of Goetze (India) Ltd. (supra) was as to whether the assessee can make a claim for a deduction before the assessing officer otherwise than through the filing of a revised return. The Hon'ble Apex Court, in its ruling, held that a claim for a deduction not originally made in the return of income cannot be entertained by the assessing officer unless a revised return is filed. Given that the Appellant-Assessee has claimed a deduction for compensation paid in relation to the surrender of tenancy rights through the filing of a revised return on January 31, 2017 and not just by filing of a letter for additional claim, the applicability of the decision in Goetze (India) Ltd. (supra) does not apply in the present case. 1.7 In addition to the above, the Appellant Assessee submits that the judgement of Goetze (India) Ltd. (supra) makes it clear the question addressed is limited to the power of the assessing authority and does not impinge on the power of the Income Tax Appellate Commissioner or the Tribunal under section 251 and 254 of the Income Tax Act, 1961. In this regard the Appellant Assessee places reliance on the following judicial precedents: ➤ The Hon'ble Jurisdictional Bombay High Court in the decision of CIT v. Pruthvi Brokers & Shareholders [2012] 349 ITR 336 (Bombay HC) [Copy of judgement is enclosed as Annexure-2 at page no. 9 to 17] has specifically referred the decision of Goetze (India) Ltd. (supra) and held that: \"22. It was then submitted by Mr. Gupta that the Supreme Court had taken a different view in Goetze (India) Ltd (supra). We are unable to agree. The decision was rendered by a Bench of two learned Judges and expressly refers to the judgment of the Bench of three learned Judges in National Thermal Power Comp. Ltd. (supra). The question before the Court was whether the appellant-assessee could make a claim for deduction, other than by filing a revised return. After the return was filed, the appellant sought to claim a deduction by way of a letter before the Assessing Officer. The claim, therefore, wax not before the appellate authorities. The deduction was disallowed by the Assessing Officer on the ground that there was no provision under the Act to make an amendment in the return of income by modifying an application at the assessment stage without revising the return. The Commissioner of Income-tax (Appeals) allowed the assessee's P a g e | 7 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. appeal. The Tribunal, however, allowed the department's appeal. In the Supreme Court, the assessee relied upon the judgment in National Thermal Power Co. Ltd. (supra) contending that it was open to the assessee to raise the points of law even before the Tribunal. The Supreme Court held:- \"4. The decision in question is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return, In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. There shall be no order as to costs.\" [Emphasis supplied] 23. It is clear to us that the Supreme Court did not hold anything contrary to what was held in the previous judgments to the effect that even if a claim is not made before the assessing officer, can be made before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the Tribunal under section 254,\" (emphasis supplied) ➤ CIT v. Arvind Products Ltd. [2011] 339 ITR 643 (Gujarat HC) [Copy of judgement is enclosed as Annexure-3 at page no. 18 to 20], wherein it was held that: \"11. It is also necessary to note that the order of the apex court in the case of Goetze (India) Ltd. (supra) was only in relation to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. The apex court has made it clear that \"the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. 12. In the circumstances, the entire contention based on application of decision in case of Goetze (India) Ltd. (supra) is misconceived in law,\" (emphasis supplied) ➤Decision of PCIT v. UTI Bank Ltd. [2017] 398 ITR 514 (Gujarat HC) [Copy of judgement is enclosed as Annexure-4 at page no. 21 to 23], where the Hon'ble Gujarat High Court has held that: \"6. Regarding a claim contrary to the disclosures in the return, the Tribunal relied on the decision of the Supreme Court in the case of National Thermal Power Co. P a g e | 8 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. Ltd. (supra) to observe that the purpose of assessment is to tax real income. This court taking note of the decisions of the Supreme Court in the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323/157 Taxman 1 and National Thermal Power Co. Ltd. (supra) in the case of Mitesh Impex (supra) had observed as under (page 103 of 367 ITR): \"It thus becomes clear that the decision of the Supreme Court in the case of Goetze (India) Ltd. v. CIT (supra) is confined to the powers of the Assessing Officer and accepting a claim without revised return. This is what the Supreme Court observed in the said judgment while distinguishing the judgment in the case of National Thermal Power Co. Ltd. v. CIT (supra) and that is how various High Courts have viewed the dictum of the decision in the case of Goetze (India) Ltd. v. CIT (supra). When it comes to the power of the 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 a 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. 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 because it is raised for the first time before the appellate authority without resorting to revising the return before the Assessing Officer. (emphasis supplied) 1.8 As can be seen from the above decisions, while an additional claim before the AO can be made only by way of revised return of income, there is no bar on the assessee to make such additional claim before the Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal. In any case, the Appellant Assessee has claimed the deduction of Rs. 1,00,00,000/- in the revised return of income filed within the statutory timelines and therefore in the Appellant Assessee's humble view, the decision of Goetze (India) Ltd. (supra) would have no adverse implications in its case. 1.9 Further, the Appellant Assessee submits that the assessee can file revised return as many number of times so long as it is within the limitation period prescribed under section 139(5) of the Act. In this regard the Appellant Assessee places reliance on the decision of Hon'ble Bangalore Tribunal in the case of ACIT v. Samson Distilleries (P.) Ltd [2006] 9 SOT 24 (Bangalore Trib.) (URO) [Copy of judgement is enclosed as Annexure - 5 at page no. 24 to 26].” P a g e | 9 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. 6.3 Ld. DR, on the other hand, relied on the orders of the lower authorities and the decision of the Hon’ble Apex Court in Goetze India (supra). He further pointed out that Ld. CIT(A) has rightly held that the compensation paid for the surrender of tenancy rights which is claimed beyond the audited accounts and not routed through the Profit and Loss account could not be treated as a business expenditure. He, therefore, argued that the decision of the Ld. CIT(A) deserves to be upheld. 6.4 We have heard the rival submissions and perused the material placed before us. We notice that the issue stands covered in favour of the assessee by the order of the co-ordinate bench in the assessee’s own case for AY 2016-17. The relevant portion of the order is as under: “35. After hearing both the parties and on perusal of the material placed on record, it is seen that assessee has paid compensation of Rs. 1,18,66,667/- to the existing tenants for surrendering the tenancy rights. The assessee had filed a suit against these tenants to restrain them from creating any third party rights and the tenant had approached the assessee for settlement and based on this consent terms assessee had to pay the compensation to other tenants. We find that this issue is covered by the decision of Hon'ble Calcutta High Court in the case of Shyam Burlap Co. Ltd. v. CIT (supra) wherein it was held that rental income earned by the assessee was taxable as business income, then compensation paid by the assessee to existing tenants to obtain vacant possession of building so as to earn higher rental income by letting out to new tenants was to be regarded as business expenditure allowable u/s.37(1). In para 14 & 15 of the Judgment the Hon'ble High Court held as under:- The Assessing Officer and the Tribunal had rejected the assessee's claim for treating the rental income as income from business as assessee in the preceding years had declared it as income from house property and there was no change in the facts of the case in this assessment year Then the issue is whether in the earlier assessment years whether assessee had declared the rental income as business income and was it considered in the light of the Memorandum The answer is in the negative Though as noted in earlier assessment years the assessee had shown rental income as income from house property however, in relevant assessment year it has claimed rental income as business income in view of the object as set out in clause 4 of the memorandum P a g e | 10 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. Though before the Tribunal the Memorandum was relied on to put forward the case that the income was part of the business and payment of compensation was to earn higher income, it was not at all considered. Since in relevant assessment year the assessee had claimed rental income as business income and as previously there was no adjudication or decision considering the Memorandum, and as being the owner of the premises, payment of compensation ie the expenditure was wholly and exclusively for commercial expediency, in the said circumstances the principle of consistency cannot be made applicable. Again, the Assessing Officer and the Tribunal had rejected the claim of the assessee as there was no change in the facts of the case during the relevant assessment year Though the assessee had claimed that the rental income earned by it was assessable under the head business and the compensation was paid by it for obtaining possession from lessee/tenant so as to earn a higher income, as an admissible revenue deduction in spite of Memorandum permitting the assessee to carry on business by letting out properties, the Assessing Officer and the Tribunal ruled otherwise. Since the object in the Memorandum permitted the assessee to carry on business in letting out properties and as 85 per cent of the income of assessee was by way of deriving rent and lease rentals, income from rent constituted the business income of the appellant Since compensation was paid by the appellant, the landlord of the premises, to obtain possession from the lessee/tenant so as to earn a higher rental income, it had arisen out of business necessity and commercial expediency. Since there was no question of acquiring a property it cannot be said that the payment made was for having a benefit of enduring nature. Rather the compensation was paid to the existing tenants to have their portions vacated to have new tenants with higher rent and thus to have a higher rental income which was a business activity permitted by the Memorandum. [Para 14] 36. Similar view has been reiterated by the Hon'ble Kerala High Court as relied upon by the Id. Counsel. Since, no contrary judgment has been brought on record before us therefore, respectfully following two decisions of Calcutta High Court in the case of CIT v. Auto Distributor Ltd.; Shyam Burlap Co. Ltd. v. CIT and Hon'ble Kerala High Court judgment, we allow this issue in favour of the assessee and held that the compensation paid to the existing tenant for surrendering of tenancy rights is allowable u/s. 37(1).” As the issue has been decided in favour of the assessee after detailed examination of the facts and circumstances, respectfully following the decision of the co-ordinate bench, we hereby hold that the assessee is entitled to deduction u/s 37(1) of the Act in respect of the compensation paid for the surrender of tenancy rights amounting to Rs. 1 cr. P a g e | 11 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. 7. Ground No. 2: Allowance of depreciation of compensation paid – Rs. 2,50,000/- This ground is an alternative ground vide which the assessee has claimed depreciation u/s 32 of the Act, in case, the expenditure incurred by way of the compensation paid for the surrender of tenancy rights is treated as capital in nature. Since Ground No. 1 has been allowed in favour of the assessee, ground No. 2 is rendered infructuous. 8. Ground No. 3: Deduction u/s 80G of the Act – Rs. 4,42,000/- This ground is also rendered academic since after allowing the deduction of Rs. 1 cr. u/s 37(1) of the Act, the assessee’s income becomes negative and therefore the claim of deduction u/s 80G is not admissible. 9. Ground No. 4: Carry forward of unabsorbed depreciation – Rs. 8,81,190/-. Ground No. 5: Non-grant of MAT credit – Rs. 6,14,510/-. Ground No. 6: Incorrect computation of income. In respect of the above three grounds, the matter is restored for the limited purpose of verification of amounts to be allowed as carry forward unabsorbed depreciation, grant of MAT credit and correct computation of income after giving due opportunity to the assessee. P a g e | 12 ITA No. 896/Mum/2024 A.Y. 2015-16 Todi Industries Pvt. Ltd. 10. Ground No. 7 & 8: Regarding charging of interest u/s 234B & 234D and recovery of interest u/s 244A. These two grounds are consequential in nature and hence need no separate adjudication. 11. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 26.03.2025. Sd/- Sd/- KAVITHA RAJAGOPAL RENU JAUHRI (न्यधनयक सदस्य/JUDICIAL MEMBER) (लेखधकधर सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 26.03.2025 अननक ेत स ुंह र जपूत/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण/ ITAT, Bench, Mumbai. "