TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 154
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....ount of employee contribution to provident fund and Employees' State Insurance Corporation amounting Rs. 1,63,872 on the ground that the same was not paid on or before prescribed due date and therefore not allowable under section 43B of the Income-tax Act, 1961 ('the Act'). It is submitted that it be so held now and disallowance confirmed be deleted. 1.1 The learned CIT(A) as well as the learned AO erred in law and fact by not appreciating the decision of Hon'ble Apex Court in the case of Alom Extrusions Limited [319 ITR 306]. 2 The Learned CIT(A) erred in law and facts in upholding the disallowance of depreciation on building given on lease amounting Rs. 60,91,110/- by upholding the AO's decision that the lease rental income is income from house property and not business income under the Act. It is submitted that it be so held now and disallowance confirmed be deleted. 3 The Ld. AO erred in law and on facts in making and the Ld. CIT(A) in upholding an upward adjustment of Rs. 2,32,35,833/- u/s 92CA(3) of the Act in respect of international transactions of the appellant pertaining to payment of management fees. 4 The Ld. AO erred in law and on facts and Ld. ....
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....t, 1961. The same was further confirmed by the Ld. CIT(a) the issue is already been decided against the assessee in terms of the ratio laid down passed by the Hon'ble Jurisdictional High Court in the case of Gujarat State Road Transport Corporation (GSRTC) reported in [2014] 41 taxmann.com 100 (Gujarat). Hence, we find no merit in this ground of appeal preferred by the assessee. The same, thus, dismissed. 3. Next ground relates to disallowance of depreciation of building given on lease amounting to Rs. 60,91,110/-. On the ground that the lease rental income is income from house property and not business income under the Act. During the year under consideration, the appellant has received rent of Rs. 93,72,000/- from Hanil Tubes India Pvt. Ltd. (HTIL) in respect of leasing of land and factory building. The said income was offered by the assessee under the head 'business income'. In reply to show-cause issued by the AO as to whether the said income should not be taxed under the head 'income from house property' instead of 'income from business or profession'. The assessee stated that it was a factory building which was given on rent; the same was constructed for carrying out manufa....
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....d thus letting out of the said house property cannot be deemed to be carrying on any business by the appellant. In an identical situation the Hon'ble Apex Court in the matter of the Universal Plast Ltd. (1999) 103 taxmann 493(SC). The Hon'ble Apex Court decide lease rent received from letting out the factory premises in respect of which the assessee had decided to go out of business was to be assessed as income form house property and not business income. Relying upon the judgment while confirming the order passed by the Ld. AO the Ld. CIT(A) observed as follows:- "5.4. On the basis of such discussions, the Apex Court ruled that the lease rent received from letting out the factory premises in respect of which the assessee had decided to go out of business, was to be assessed as income from house property and not as business income. In the present case also, the appellant never intended to conduct any business by utilizing the factory premises which were given on rent to HTIL. Hence the issue is covered against the appellant by the ratio laid down by the Apex Court in the above decision. It may also be mentioned here that the Hon'ble High Court of Madras in its decision in the....
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....er coated steel tubes, plastic fuel tanks and providing support services in IT, CAD & other services and manufacturing of equipment required to make fluid carrying components. The appellant had filed its return of income for the year AY 2011-12 on 29lh November 2011 declaring an income of Rs. 2,96,83.690 under the normal provisions of the Income Tax Act, 1961 (the Act) based on the position prevailing as on the date of filing of the return of income. The book profit returned u/s. 115JB of the Act amounted to Rs. 7,35,82,357. The return was then selected for scrutiny assessment and an order dated 7th April 2015 was passed u/s. 143(3) r.w.s. 144C(3) of the Act by the learned Dy. Commissioner of Income Tax, Circle - 1(1), Vadodara (the learned AO) assessing the total income at Rs. 2,96.83,690 under the normal provisions of the Act effecting various additions / disallowances. It is against this assessment order dated 7th April 2015 passed u/s. 143(3) r.w.s. 144C(3) of the Act that the appellant preferred this appeal before us Ld. CIT(A) who ultimately disallowed the appeal. 3 Additions under the transfer pricing regulations disallowing the management charges - Rs. 2,31,35,833/-. D....
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....are at arm's-length which was also followed by the Ld. Assessing Officer against which appeal has been preferred by the assessee. However the same has been confirmed by the First Appellate Authority. Hence, the instant appeal before us. 7. Heard the respective parties, perused the relevant materials available before us. We have also gone through the date provided by the Ld. Senior Counsel in this aspect at the time of hearing before us. It appears that under the mutual agreement procedure the 70% actual expenses incurred under the management fees was allowed for Assessment Years 2007-08, 2008-09, and 2009-10 in respect of the case of the assessee itself. The details in respect of allowability of expenses under the advanced pricing agreement has also been placed on record by the appellant company before us wherefrom it appears that 2% of the operating revenue of manufacturing segment has been allowed in respect of assessment year 2015-16, 2016-17 and 2017-18. However 3% of the operating revenue of manufacturing segment has been allowed under the advanced pricing agreement for assessment year 2018- 19. It is relevant to mention that the advanced pricing agreement has been recogniz....