AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 1588
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.... needs to be taxed in AY 2006 - 07 needs to be Rs. 154.79 lacs [i.e. Rs. 207.80 lacs minus Rs. 53.00 lacs (already offered for tax u/s. 43B in AY 2005-06)] and further direction needs to be given to the Learned Dy. Commissioner of Income Tax (LTU) to ensure that an amount of Rs. 136.12 lacs in AY 2009 - 10 and Rs. 18.67 lacs in AY 2013 - 14 are not considered while computing taxable income so as to ensure that double disallowance of the same amount is not done. (2) The learned Dy. Commissioner of Income Tax (LTU) Mumbai erred in doubly disallowing 10% of expenditure incurred on account of gift expenses amounting to Rs. 3.45 lacs. (3) We have credited royalty income in our books of accounts amounting to Rs. 1.42 crores with respect of royalty received from our overseas subsidiary M/s SCIB Chemicals SAE, Egypt and same was offered for tax in our return of income. The same being international transaction, it was reported in our Transfer Pricing Audit Report filed in Form No 3CEB. However, Article 13 of DTAA of India with Egypt royalty income is not liable for tax in India & hence, the same needs to be reduced from taxable income. This ground was not raised before ass....
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....ccount and debited the same to 'Refund receivable account' shown in the Balance sheet. In the computation of income attached to the return of income for the instant assessment year assessee reduced the said sum of Rs. 2,07,80,623/-from its taxable income. The aforesaid aspect was explained by the assessee by way of a Note appended to the computation of income annexed to the return of income. As per the assessee, it was advised that it was not liable to pay an entry tax of Rs. 2,07,80,623/- and, though, at the time of finalization of Annual Accounts, it credited such amount to the P&L account, but at the time of filing of income-tax return, assessee reduced it from its taxable income on the ground that the same shall be offered for tax in the year of actual finalization of claim of refund by the statutory authorities. 4.1 The income tax authorities on the other hand, have rejected the plea of the assessee for reduction of taxable income by the aforesaid amount of Rs. 2,07,80,623/- on the ground that once credit for the refund has already been taken by the assessee and reflected in the P&L account, the same cannot be reduced in the computation of total income. Against such....
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.... can be shown that there does not arise any income at all, such an event would be outside the purview of taxation. In other words, what is of importance is to see, whether in a given case what is being brought to the tax is real income or not. The Hon'ble Supreme Court has emphasized on taxing of real income in various judgments viz. in the case of CIT v. Shoorji Vallabhdas & Co [1962] 46 ITR 144 (SC) and in the case of Godhra Electricity Co. Ltd. v. CIT 225 ITR 746 (SC). Therefore, even if, entry of income is made in the books of account maintained by the assessee, yet if it does not result in any income at all, the same cannot be taxed as it would amount to taxing a hypothetical income. The Hon'ble Supreme Court in the case of Godhra Electricity Company Ltd. (supra) has held that in such a situation it would amount to taxing an income which does not materialize, and is only a hypothetical income. Keeping the aforesaid principles in mind, we may now evaluate the facts in the present case. 4.5 In the instant case, it is not in dispute that in the preceding assessment year of 2005-06 assessee paid an entry tax of Rs. 2,07,80,623/- though under protest and in the income ta....
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....igh Court upheld the decision of the Tribunal, which had deleted the said addition from the final assessment on the ground that assessee was not legally entitled to refund in its own case and taxing of such an income would amount to taxing of a hypothetical income. It was noted that assessee's claim for refund of excise duty was never accepted and hence it could not be said that any income had accrued to the assessee. In our view, the ratio of the judgment of the Hon'ble Punjab & Haryana High Court is clearly attracted in the instant fact-situation also and we find no reason to uphold the stand of the Revenue. Before us, the Ld. CIT-DR has emphasized on the suo-moto action of the assessee in crediting the said sum in the P&L account. In our view, the said argument is bereft of any merit since what is required to be taxed is a real income not hypothetical income and merely because the same has been entered in the books of account. 4.6 In this view of the matter, we hereby allow the claim of the assessee. 4.7 Before parting, we may also refer to an alternative plea of the assessee for reduction of the addition on account of amounts, which is otherwise been offered for t....
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....levant facts are on record and it can be adjudicated appropriately. The Ld. Representative for the assessee relied upon the decision of the Hon'ble Kerala High Court in the case of Lekshmi Traders v. CIT [2015] 55 tamann.com 390/[2014] 367 ITR 551 to point out that even in a case where the matter was originally remanded back to decide on merits, the Hon'ble High Court held that the Tribunal could have considered additional Ground pertaining to the point of jurisdiction even in such remand proceedings. It was therefore, contended that since the aforesaid issue involves a point of law and the necessary facts being on record, the DRP ought to have admitted the claim for adjudication. In so far as the merits of the claim is concerned, the Ld. Representative for the assessee pointed out that in assessment year 2012-13 the Assessing Officer has himself accepted the claim of the assessee in an assessment finalized under section 143(3) r.w.s. 144C of the Act dated 25/4/2016, a copy of such order has been placed in the Paper Book at pages 368 to 371. The Ld. Representative for the assessee also referred to the order of the Tribunal for assessment year 2008-09 dated 20/11/2015 vide I....