TaxTMI 
TaxTMI 
2019 (4) TMI 82
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....having manufacturing plants in Kerala and Gujarat. Earlier, the Assessee was assessed to income tax for a short period with the Asst. Commissioner of Income Tax, Central Circle-II, New Delhi and now the assessment is at Cochin. 3. In respect of the assessment year 1993-94, the Assessee had filed return declaring a total income of Rs.40330000/- on 30.12.1993. Thereafter, revised return was filed on 29.03.1995 showing the total income as Rs.3,72,30,437/- The Assessing Officer completed the assessment under Section 143(3) of the Income Tax Act on 22.03.1996, as per Annexure A order produced in the appeals filed by the Department. This was sought to be challenged by filing appeal before the Commissioner of Income Tax (Appeals) by the Assessee and after considering the merits involved, the appeal was allowed in part, as per Annexure B order dated 25.09.1996 (produced in the appeals filed by the Department). Met with the situation, both the Assessee and the Department filed appeals before the Income Tax Appellate Tribunal, Cochin Bench to the extent they were aggrieved. In the meanwhile, the assessment was re-opened under Section 147 of the Act, read with Section 143(3) of the Income Ta....
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....r in question, i.e. 1993-94. With regard to the placement charges of Rs. 35 lakhs, the Commissioner (Appeals) directed the Assessing Officer to verify the position, whether the expenditure related to the issue of new 17% debentures or the earlier issue of 14% debentures; adding that if it related to 17% debentures, it was to be allowed or else if it related to the earlier 14% debentures, it was to be disallowed. On filing further appeals by the Assessee, the Tribunal held that the professional fee of Rs. 56.50 lakhs was raised by M/s.J.M. Financial and Consultancy Services Ltd on 10.03.1993 and it being within the year of assessment (1993-94), it was held as allowable for the said year. 9. In respect of the remaining Rs. 35 lakhs spent towards placement charges (towards 'rights issue' of non-convertible debentures), the matter was already remanded to the Assessing Officer for verification, which hence was not disturbed by the Tribunal. Despite the assertion made by the Assessee that the professional fee would be payable only when demand/bill is raised, it was repelled and the Assessing Officer, on remand, disallowed the amount again. The matter ultimately came up before th....
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....of Rs. 56.50 lacs. Thus, this ground of appeal of the assessee is allowed." 11. According to the learned Sr. Counsel for the Assessee, there is no much relevance to the 'mercantile system of accounting' projected as the basis for raising the challenge by the Department. It is only in respect of the 'statutory payments', that provisions can be made in the relevant year, as it becomes due in that year; whereas in the case of 'contractual payments', it becomes due only when the demand is made. 12. In the instant case, the bill was raised by the Stock Brokers only on 10.03.1993 (within the assessment year 1993-94), though the 'rights issue' had been closed on 04.10.1991 (assessment year 1992-93). This being the position, it was rightly claimed by the Assessee in respect of the assessment year 1993-94. Reliance is sought to be placed on the verdicts in Commissioner of Income Tax vs; Raj Motors Yad [2006] 284 ITR 489 (All) and Commissioner of Income Tax vs. Sanco Trans Ltd. [[2006]284 ITR 51 (Mad)]. It is also pointed out by the learned Sr. Counsel that there is no dispute for the Department as to the genuineness of the expenditure incurred by the Asses....
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....ssee is to be reckoned as 'capital receipt/capital expenditure)' or as 'revenue receipt/revenue expenditure'. It will be worthwhile to extract the course pursued by the Tribunal as revealed from paragraphs 21, 22 and 23 of Annexure-E Order in I.T.Appeal No.1075 of 2009. "21 . From the above two decisions, one by the Apex Court and the other one by the jurisdictional High Court, it is clear that the Tribunal is not confined only to the grounds raised before it in the appeal memorandum and is entitled to admit the additional grounds raised before it even though the same issue were not raised by the assessee before the Assessing Officer or the CIT (Appeals), as long as the grounds raised are legal grounds and no fresh facts are to be brought on record and the facts are already existed in the files of the department. In the case of the present assessee also the same facts and circumstances prevail as regards the additional grounds raised before us. In this view of the matter, we are inclined to admit this additional ground of the assessee in respect of the claim of Rs. 3,03,19,957/- being gains on cancellation of forward contracts, which is claimed to be of capital in....
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....163/Del/1997 dealt with by the Tribunal. The Assessee had entered into a 'Technical Know-how Collaboration Agreement' with M/s. General Tyres International Company, USA on 26.01.1987, which got approval of the Government on 31.12.1987. It was valid for a period of 5 years from 26.01.1987. This expired on 26.01.1992, on which date, a renewal agreement was executed for a further period of five years from 26.01.1992 to 25.01.1997 and submitted for approval of the Government. Approval was granted by the Government on 13.10.1993. The Assessee debited a sum of Rs. 2,61,52,641/- towards royalty payable during the period 26.01.1992 to 31.03.1993. The Assessee claimed the said amount during the assessment year 1993-94, which came to be rejected by the Assessing Officer, stating that approval was given by the Government only on 13.10.1993, i.e. coming within the assessment year 1994-95. The appeal preferred by the Assessee was partly allowed by the Commissioner of Income Tax (Appeals) holding that it was mentioned in the Government letter dated 02.04.1993 that duration of the agreement shall be for a period of 5 years from expiry of the earlier agreement and hence the agreement becam....
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....l preferred by the Revenue was dismissed in relation to the challenge against 'club expenses'. The finding arrived at by the Tribunal is well supported by reasons. The amount spent for acquiring membership in the Clubs stands on a different pedestal from the amounts incurred for availing materials supplied or service provided in the clubs. This Court finds that the said issue is to be answered in favour of the assessee. It is declared accordingly. 20. Another issue considered by the Tribunal is in respect of the claim of deduction of commission of Rs. 40,38,168/- and Rs. 26,980/- paid to M/s.Raunaq International Ltd., a sister concern of the assessee, which according to the Assessing Officer was an instance of 'diversion of funds' and that the deduction was against the decision of this Court in Commissioner of Income Tax vs. Premier Breweries [(2005) 279 ITR 51 (Ker.). The stand of the Assessing Officer was that the persons holding office in both the establishments were same or close relatives. But, in the appeal preferred by the Assessee, the Commissioner of Income Tax (Appeals) deleted the above additions, holding that there was no dispute as to the actual payme....
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....venue in I.T.Appeal No.1347 of 2009 is devoid of any merit and no substantial question of law is involved. 22. I.T.A. 1329 of 2009: The issue mainly pertains to the disputed payments stated as effected by the Assessee, to six concerns towards the advertisement charges during the relevant year. On receipt of some information from the office of the Department at New Delhi, that some of these concerns to whom advertisement charges were stated as given did not exist, notice under Section 148 of the Income Tax Act was issued to re-open the assessment and to disallow some portion of advertisement expenses. In the course of re-assessment proceedings, it was seen from the materials on record that the Assessee had furnished particulars of the parties to whom advertisement charges were given and as to the publicity work involved, besides the particulars of the work done and payments made by 'account payee cheques'. It was substantiated that the cheques were honoured (having encashed by the parties) and never returned to the Assessee. But the summons issued under Section 131 of the Act to the aforesaid parties came to be returned unserved by the postal authorities, with the endorse....
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....r stands proved in view of the encashment of cheques, as vouched by the Bank Manager and no further burden stands on the shoulders of the Assessee in this regard. Reliance is sought to be placed on the verdict of the Bombay High Court in Ramanand Sagar vs. Deputy Commissioner of Income-Tax and others [(2002) 256 ITR 134] 26. After hearing both the sides, we find that the materials produced before the Assessing Officer clearly reveal that the amounts were paid by the Assessee by way of crossed cheques and that there was no dispute with regard to the works in relation to the publicity effected. So also, pursuant to the summons issued by the Assessing Officer, the Bank Manager had produced the details/records; asserting that all the cheques were encashed (also producing copies of the relevant cheques, except the Cheque for the amount aggregating to Rs.9,30,332/-, which could not be traced out). 27. In so far as there is no dispute as to the publicity effected and that the payment was effected through crossed cheques and further since all these cheques have been encashed, we are of the view that this is not a fit case where interference is to be made with the finding and reasoning gi....
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....officer allowed the claim of Rs. 2,30,67,615/- being roll over charges as revenue expenditure towards renewal of contracts for covering the repayment of principal amount of loan taken for the purchase of machinery because the assessee company itself has claimed it so. However, the Special Bench has held that the profit arising out of the cancellation of the forward contracts taken for repayment of loan to the extent of Rs. 11,06,49,739/- is to be treated as capital in nature. If, that is so, the roll over charges paid for renewal of such contracts also would amount to capital expenditure as rightly claimed by the department based on the decision of the Special Bench. In this view of the matter,we allow this additional ground of the revenue and direct the Assessing Officer to treat Rs. 2,30,67,615/- as capital expenditure, while giving effect to this order. Thus this additional ground of appeal is allowed." . 30. After hearing both the sides, we are of the view that the challenge raised by the Assessee does not constitute any substantial question of law coming within the purview of Section 260A of the Income Tax Act, to be entertained by this Court in the appeal. This Court is als....
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....year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeals shall be filed in respect of all such assessment years even if the tax effect is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which tax effect exceeds the monetary limit prescribed. In case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately. 12. It is clarified that the monetary limit of Rs. 20 lakhs for filing appeals before the ITAT would apply equally to cross objections under Section 253(4) of the Act. Cross Objections below this monetary limit, already filed, should be pursued for dismissal as withdrawn/not pressed. Filing of cross objections below the monetary limit may not be considered henceforth. Similarly, references to High Courts and SLPs/appeals before Supreme Court below the monetary limit of Rs. 50 lakhs and Rs. 1 crore respectively should be pursued for dismissal as withdrawn/not pressed. References before High Court and SLPs/appeals belo....