TaxTMI 
TaxTMI 
2020 (2) TMI 563
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....o such provision was of Rs. 1,61,30,000/-. The Assessing Officer was of the opinion that the same is contingent liability and added the same to the book profit u/s 115JB of the Act. Upon assessee's appeal, the learned CIT(A) by referring to his own order for assessment year 2008-09 dismissed the issue raised by the assessee. Against this order, assessee is in appeal before us. 3. We have heard both the counsels and perused the records. We find that an identical issue was considered by this Tribunal in assessee's own case for assessment year 2008-09. We find that vide order dated 28.09.2018, this Tribunal has dealt with the issue as under :- "19. On this issue, the A.O. noted that the assessee has made a provision for disputed claim amounting to Rs. 1,35,60,000/-. The amount in question was a provision for the sum towards security charges payable to Jawaharlal Nehru Port Trust as per the concession agreement. The A.O. was not satisfied with the assessee's response. He was of the opinion that the claims were in the nature of dispute and were not ascertainable as to whether the actual amount came could be spent. Hence, he added back the same holding them to be contingent in nature.....
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..... 21. Against the above order, the assessee is in appeal before us. 22. We have heard both the counsel and perused the records. We find that it is settled law that it is the substance that counts and not the nomenclature given to it. In the present case, the assessee has received invoices from JNPT toward security charges. These were on account of deployment of CISF Personal. The payment for which was compulsory. The assessee accepted the liability but awaiting supporting documents made the debit in the name of disputed liability. As mentioned above, the name given by the parities is not determinative of the character of the transaction but it is the substance that counts. 23. In this regard, the case law referred in preceding issue from Hon'ble Apex Court and Hon'ble Bombay High Court is germane. However, we also note that the ld. CIT(A) has noted that what was the ultimate fate of the liability has not been submitted before him. Even before us, the ld. Counsel of the assessee has not given details of the present position of this liability. In our considered opinion this aspect is crucial for proper adjudication of this issue. Hence, we remit this issue to the file of the ....
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....st income, the following u/s. 80IA, the ld. Counsel of the assessee placed reliance upon the recent decision of the Hon'ble jurisdictional High Court in the case of M/s. Tema Exchangers Manufactures Pvt. Ltd. vs The Asst. CIT (in ITA No. 415 of 2004 vide order dated 18.07.2018), wherein the question was as under : (a) On the facts and in the circumstances of the case, whether the Income tax Appellate Tribunal was right in law in reversing the order of the CIT(A) and restoring that of the Respondent No.1 and thereby denying the appellant the benefit of Section 80IA of the I.T. Act, in respect of interest income of Rs. 6,69,573/- ? 26. The Hon'ble jurisdictional High Court has decided the issue in favour of the assessee by holding as under : 3. The deduction under both the aforesaid heads under Section 80IA of the Act was disallowed by the impugned order of the Tribunal. It followed the decision of the Apex Court in Commissioner of Income Tax Vs. Pandian Chemicals Ltd. 318 ITR 420 which has held that the words 'derived from' means something which has direct and immediate nexus with the industrial undertaking. Thus, the claim for deduction on the above heads wa....
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....the issue stands concluded in favour of the appellant assessee by the decision of this Court in Jagdishprasad M. Joshi (supra). 7. Mr. Tejveer Singh, learned Counsel for the Revenue is unable to points out why the aforesaid decision in the case of Jagdishprasad M. Joshi (supra) would not apply to the present facts. 8. In the above view, both the questions of law are answered in the negative i.e. in favour of the appellant assessee and against the respondent Revenue. 9. Accordingly, the appeal is allowed." 27. Per contra, the ld. Departmental Representative submitted that the interest income cannot qualify for deduction u/s. 80IA. For this, he referred to the decision of the Hon'ble Apex Court in the case of Liberty India vs. CIT [2009] 317 ITR 218 (SC) vide order dated 31.08.2009 and CIT vs. Dilip Kumar vide order dated 30.07.2018. 28. Upon careful consideration, we find that since in the recent decision, the Hon'ble jurisdictional High Court has decided the issue in favour of the assessee following the judicial precedent, we uphold the order of the ld. CIT(A)." 7. We note that in the above order, the Tribunal has upheld assessee's case that interest income will ....
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....gibility of deduction under Section 80IB of the Act. The profit must be derived from an industrial undertaking. Placing reliance upon the above, the learned CIT(A) held that these items do not qualify for deduction under Section 80IA of the Act as they cannot be considered to be in the nature of income derived from industrial undertaking. The learned CIT(A) noted that as per the Hon'ble Apex Court decision in Liberty India (supra), the receipt beyond the first degree cannot be considered and these receipts since were beyond the first degree, were held to be not qualifying for deduction under Section 80IA of the Act. As regards the issue of deduction under Section 80IA of the Act on foreign exchange gains, we note that the learned CIT(A) for assessment year 2010-11 has dealt with the issue as under :- "vi. As regards to the deduction claimed u/s. 80IA on foreign exchange gain, it was explained that the same has arisen from reinstatement of management consultancy fees payable to DP World FZE for the services rendered by them to the company and also from reinstatement of balance foreign currency term loan which was taken in AY 2006-07 for the business purposes. Except for this, ....
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....ated enterprise. Since the facts are identical, we are referring to figures from assessment year 2009-10. 11. On this issue, the Assessing Officer observed that it was seen from the audit report filed by the assessee in terms of Section 92CEB of the Act that during the year the assessee had paid fees for technical services amounting to Rs. 3,52,38,530/- to the associated enterprise in Australia. The assessee had agreement with its associated enterprise for receiving various services. To ascertain the arm's length price for payment to associated enterprise, the assessee was asked by the Assessing Officer to provide number of services on which the fees has been paid and the number of heads on which services are received. The assessee explained that the number of heads under which services were receivable was six, but actually the assessee receives services under three heads. The Assessing Officer disallowed 50% of the amount payable to associated enterprise which worked out to Rs. 1,76,19,265/-. 12. Upon assessee's appeal, learned CIT(A) noted that identical issue had come up for his consideration in assessee's own case for assessment year 2008-09 which was decided as under :- "i....
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....al in assessment year 2008-09 as under :- "6. We have heard both the counsel and perused the records. Both the counsel fairly agreed that the issue has been dealt with by the ITAT for assessment year 2003-04 and 2004-05 wherein the tribunal had confirmed the order of ld. CIT(A) and the Revenue has not challenged the said order before the ITAT. 7. We find that in A.Y 2003-04, the Tribunal had concluded as under : 7. We have perused the records and considered the matter carefully. The dispute is regarding transfer pricing adjustments based on arm's length price. The assessee had made payments of Rs. 5,76,10,656/- to its overseas AE for various services claimed to have been rendered as listed in para 2 of this order. CIT(A) after detailed examination has given a finding that full services had been rendered only in respect of clauses (a), (b) & (c). As regards services mentioned in clauses (d) & (e) these were also rendered but these services were mostly required during the initial years and therefore quantum of payment for these services was not justified. In regard to the services mentioned in clauses (f) & (g), CIT(A) was given a finding that there was no evidences to substant....
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....s issue and to this extent. 9. Accordingly respectfully following the precedent as above, we do not find any infirmity in the order of ld. CIT(A). Accordingly we uphold the same." Accordingly, following the Tribunal's order in assessee's own case, where similar order of learned CIT(A) was confirmed, we uphold the order of learned CIT(A) and dismiss the issue raised by the assessee. 14. Apropos the issue of disallowance of expenses under Section 14A of the Act for assessment years 2010-11 and 2011-12. Since the facts are common, we refer to the facts and figures for assessment year 2010-11. The Assessing Officer has made disallowance under Section 14A read with Rule 8D of the Income Tax Rules, 1962. Assessee's submission that assessee has earned very meagre dividend income and has huge general reserves was not considered by the authorities below. Now, in appeal before us, the learned counsel of the assessee's contention is two-fold. The first contention is that disallowance under Section 14A of the Act is to be limited to the extent of exempt income earned. We find that the contention of the learned counsel of assessee is cogent inasmuch as the same view was taken by the Hon'....