AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (6) TMI 564
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....ssment Year : 2011- 12) This stay application is arising out of ITA No.1449/Mum/2016 for A.Y.2011-12. ITA No.7382/ Mum/2017 (Assessment Year : 2013-14) This appeal in ITA No.7382/Mum/2017 for A.Y.2013-14 preferred by the assessee against the final assessment order passed by the Assessing Officer dated 30/11/2017 u/s.143(3) r.w.s.144C(13) of the Income Tax Act, hereinafter referred to as Act, pursuant to the directions of the ld. Dispute Resolution Panel (DRP in short) u/s.144C(5) of the Act dated 22/09/2017 for the A.Y.2013-14. SA No.461/Mum/2019 (Assessment Year 2013-14) This stay application is arising out of ITA No.7382/Mum/2017 for A.Y.2013-14. ITA No.1797/ Mum/2016(Assessment Year : 2011-12) This appeal in ITA No.1797/Mum/2016 for A.Y.2011-12 preferred by the revenue against the final assessment order passed by the Assessing Officer dated 29/01/2016 u/s.143(3) r.w.s.144C(13) of the Income Tax Act, hereinafter referred to as Act, pursuant to the directions of the ld. Dispute Resolution Panel (DRP in short) u/s.144C(5) of the Act dated 18/12/2015 for the A.Y.2011-12. ITA No.719/ Mum/2017 (Assessment Year : 2012-13) This appeal in ITA No.719/Mum/2017 fo....
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....Project Maxwell (Demerger of Mahindra Automobile Distributor Private Limited) 8,66,260 Project Bamford (Acquisition of automobile company in United Kingdom) 26,74,724 Navistar Valuation (For buying out stake in Navistar Inc.) 8,42,700 43,83,684 4) Rates & Taxes -Competition commission of India Application for obtaining their approval for the buyout of Navistar shares in the 2JVs 10.00,000 5) Year-end Provision for M&A Activities Legal Fees / Professional Fees -Bamford (Acquisition of automobile company in United Kingdom) 2,57,09,756 Legal Fees for SYMC (In connection with further equity investment in SYMC) 44,38,800 Legal Fees / Professional Fees -Navistar (For buying out stake in Navistar Inc.) 42,71,600 3,44,20,156 B Head Office i) Legal fees Project Moon (For strategic alliance of systech companies) 34,20,421 Project Vacation (In connection with sale of MHRIL) 7,00,000 ....
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....0 :- * Legal fees for Project Strike & Project Bamford - Rs. 6,61,44,351 * Professional Fees - Rs. 28,80,399 * Legal / Professional fees for Project Bamford - Rs. 2,83,84,48 This expenditure was incurred in respect of acquisitions which never materialized. It is the contention of the assessee that the said expenditure should be allowed as revenue expenditure since it has not resulted in the generation of any capital asset unlike the first set of expenditure which resulted in acquisition of investments and hence the expenditure incurred could be added to the cost of investments as directed by the Tribunal in AY 2009-10 and earlier years. c) For this proposition reliance is placed on the following two decisions:- (i) Commissioner of income tax v/s. M/s. Magnese Ore India Limited (Income tax Reference No. 150 of 1993). The relevant paras of the order are Para 8 in which facts have been set out. The expenses were incurred for setting up a plant but which was never set up. The disputed expenditure was towards travelling expenses which was held by the Department to be capital in nature (para 14). In Para 20 the High Court has referred to the order of t....
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....e ground No.1 raised by the assessee is partly allowed. 3. The next issue to be decided in this appeal is with regard to allowability of deduction towards provision for warranties in the sum of Rs. 50,11,63,331/-. 3.1. We have heard rival submissions and perused the materials available on record. We find from the undisputed facts narrated by the counsels at the time of hearing and on perusal of the records of the lower authorities that, the assessee whenever each and every vehicle / tractor is sold, the said sale is covered by warranty clause and the buyer is entitled to enforce this clause within specified period / mileage provided, the defects in vehicle / tractor noticed by the buyer are covered by the warranty. It was stated that the warranty period extends from six months to 30 months. Pursuant to this warranty clause, the assessee during the year had made provision for warranty in the sum of Rs. 50,11,63,331/- as under:- (Rs. In lakhs) Division Provision for warranty for the year AY 2012-13 Provision for warranty for the year AY 2013-14 Incremental Provision for Warranty Automotive Division 19,053.01 24,637.71 5,584.70 Tractor Divisio....
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....the warranty clause within the warranty period and wherever the existing provision already made requires reversal due to the fact that the claim is made beyond the warranty period or the claim is not covered within the warranty clause etc, the same is reversed. This scientific exercise of making provision for warranty clause for each and every vehicle / tractor sold is made on a regular basis year on year by the assessee which is duly proved in the extensive workings provided before the lower authorities and hence, we find that the issue is squarely covered by the decision of the Hon'ble Supreme Court in the case of Rotork Controls India Pvt. Ltd., vs CIT in 314 ITR 62. We also find that this issue has been allowed by the Tribunal in assessee's own case for the A.Y.1989-1990 to A.Y.1998-1999. Later in A.Y.2009-10, this issue was remitted back to the file of the ld. AO to decide the samein the light of the aforesaid Supreme Court decision. We find that the decision for A.Y.2009-10 was rendered by this Tribunal by placing reliance on the decision rendered in assessee's own case for the A.Y.2006-07 to 2008-09. For A.Y.2006-07 to 2008-09, the ld. AR submitted that the ld. AO had dul....
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....e Hon'ble Supreme Court and accordingly, we direct the ld. AO to consider only those investments which had actually yielded exempt income during the year while working out the disallowance under third limb of Rule 8D(2) of the Rules. Accordingly, the concise ground No.3 raised by the assessee is partly allowed for statistical purposes. 5. The next issue to be decided in this appeal is with regard to transfer pricing adjustment made in respect of corporate guarantee fee of Rs. 4,44,82,256/- by the ld. TPO. 5.1. We have heard rival submissions and perused the materials available on record. We find that the assessee had given guarantee / letter of consent to Mahindra Overseas Industries Company (Mauritius) Ltd., (MOICML in short), Mahindra USA Inc (MUSA) and Mahindra Forgings Europe AG (MFEA) to expand the business operations and achieve overall growth in the business of the assessee. MOICML needed funds to make equity investments in other group companies. MUSA and MFEA needed the loan for working capital and to augment the growth of the business operations. There was no cost incurred to provide corporate guarantee. We find that assessee had voluntarily disallowed 1% of the c....
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....e heard rival submissions and perused the materials available on record. We find that assessee company had given loans to Bristlecone UK Ltd., Mahindra Overseas Investment Company (Mauritius) Ltd, Mahindra Gears International Ltd, at the rate of 6%, 6.20-6.6%, 9% and 6.25%, as the case may be. The assessee company benchmarked the loans using LIBOR rate by using external Comparable Uncontrolled Price Method (CUP). The ld. TPO applied LIBOR for the year of loan and further added the average spread of comparable unsecured loans given in the said year and made ALP adjustment accordingly. We find that the ld. DRP directed the ld. AO to adopt LIBOR rate of the year in which the loan was given in case the loan had been granted at fixed rate for the entire tenure of the loan. However, if the loan had been granted for a floating / flexible rate of interest, the ld DRP directed the ld AO that LIBOR rate to be applied would be LIBOR for the year under consideration. The ld. DRP also directed the ld. AO to adopt the LIBOR as directed above and further add 5% towards basis points. 6.2. Aggrieved by this direction, the assessee is in appeal before us. The ld. DR submitted that let the ld. TPO....
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..... But we find that the entire break-up had been duly submitted by the assessee before the lower authorities and the same are enclosed in page 234 of the paper book and the figures mentioned thereon are fairly ascertainable and are not mere adhoc provisions. Respectfully following the said decision of the Tribunal in assessee's own case for A.Y.2009-10, we have no hesitation in directing the ld. AO to delete the disallowance u/s. 40(a)(ia) in the sum of Rs. 33,78,54,976/-. Accordingly, the concise ground No.5 raised by the assessee is allowed. 8. The next issue to be decided in this appeal is with regard to allowance of weighted deduction u/s.35(2AB) of the Act. 8.1. We have heard rival submissions and perused the materials available on record. We find that assessee has several research and development (R & D) units which were even approved by the Department of Scientific and Industrial Research (DSIR) for the purpose of claiming weighted deduction u/s.35 (2AB) of the Act as under:- a) For the period 01/04/2011 to 31/03/2013 - Mahindra Research Valley Centre. b) For the period 01/04/2010 to 31/03/2015 i) Kandivali R & D Service division ii) ....
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....the Act thereof. The concise ground No.6 raised by the assessee is disposed off in the aforesaid manner. 9. The next issue to be decided is with regard to disallowance u/s.40(a)(ia) of the Act in respect of dealer incentives of Rs. 386,85,00,000/-. 9.1. We have heard rival submissions and perused the materials available on record. We find that the limited issue involved herein is whether provisions of 194 H are applicable in respect of dealer incentives in the form of discounts / rebates paid by the assessee to the dealers on meeting certain criteria. We find that the assessee had contended that the transaction between the dealer and the assessee manufacturer is of a sale of the vehicle on a principal to principal basis, whereas the revenue had been holding that the dealers are agents of the assessee, who had rendered services in the course of buying and selling of goods. According to the revenue, since the dealer is merely an intermediary between the assessee and final customer, the provisions of Section 194H of the Act are applicable and since the assessee had failed to deduct the tax at source, disallowance u/s.40(a)(ia) of the Act need to be made in respect of dealer i....
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....t of Stamp Duty, refund of royalty and any other benefits (as may be specified by the Government) availed by the eligible Mega Projects under PSI 2001 / 2007, whichever is lower. The copy of the said incentive scheme are enclosed in page 278 to 318 of the paper book filed before us. We find that assessee treated the amount of incentive received under Industrial Promotion Subsidy as capital receipt in the return of income on account of the following reasons:- (a) The main objective of the Scheme was to ensure sustained industrial growth through innovative initiatives for development of key potential sectors and further improving the conducive industrial climate in the State, for providing the global competitive edge to the State's industry. The policy envisages grant of fiscal incentives to achieve higher and sustainable economic growth with emphasis on balanced regional development and employment generation through greater private and public investment in industrial development. In other words, the Scheme was meant to correct regional imbalance in the industrial development of the State and also achieve higher and sustainable economic growth. (b) It is clear f....
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.... following decisions of Hon'ble Supreme Court in favour of the assessee as under:- (a) Chaphalkar Brothers, case reported in (2017) 88 Taxmann.com 178 (SC) (b) Shree Balaji Alloys and others, case reported in (2017) 80 Taxmann.com 239 (SC) 10.5. Respectfully following the said decision, we hold that the subsidy in the sum of Rs. 45,36,95,084/- is to be treated as capital receipt. Accordingly, the concise ground No.8 raised by the assessee is allowed. 11. The next issue to be decided in this appeal is with regard to treatment of industrial promotion subsidy incentive of Rs. 119,85,01,118/- in the hands of the assessee. 11.1 We have heard rival submissions and perused the materials available on record. We find that assessee had claimed a sum of Rs. 119,85,01,118/- for the industrial promotion subsidy incentive received on the basis of 'Package Scheme of incentive 2007 declared by Government of Maharashtra' for setting up of industry in certain backward areas (Chakan). The said incentive was given by Directorate of Industries for locating in a backward area and sales tax payment is only a measure or yard stick to determine the quantum of incentive. We find t....
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....s Ltd., in ITA No.6919 & 6920/Mum/2016 dated 28/11/2018 wherein the receipt of subsidy had been held to be capital receipt as the same had been held to be capital receipt as the same had been granted for either setting up new unit or for expanding the existing unit in certain regions of the State. It was further held that the subsidy was granted in the form of sales tax payable on finished goods and spares sold by the assessee. This Tribunal decision was rendered by duly considering the decision of Hon'ble Supreme Court in the case of Ponni Sugars and Chemicals Ltd., reported in 306 ITR 392. Respectfully following the same, we direct the ld. AO to treat the receipt of industrial promotion subsidy incentive of Rs. 119,85,01,118/- under the 2007 incentive scheme as capital receipt. Accordingly, the concise ground No.9 raised by the assessee is allowed. 12. The next issue to be decided in this appeal is with regard to disallowance of deduction of difference in exchange rate of Rs. 119,37,27,592/-. 12.1. We have heard rival submissions and perused the material available on record. We find at the outset that the difference in exchange rate arises out of the repayment of foreign cu....
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....) has carried forward certain amount in the 'Foreign Currency Monetary item Translation Difference Account' to be written-off to the profit & loss account in later years. 12.8. The exchange loss debited to 'Foreign Currency Monetary Item Translation Difference Account' is written-off to the profit & loss account over the life of the corresponding foreign currency loans. 12.9 Section 43A of the Income Tax Act, 1961 deals with exchange difference arising on repayment of liabilities incurred for the purpose of acquiring fixed assets outside India. Since there is no specific provision dealing with adjustment based on foreign exchange fluctuation for assets acquired locally in India, the Company has claimed the Difference in Exchange of Rs. 63,02,52,539/- to the Fixed assets / Capital work- in- progress and Rs. 56,34,75,052/- carried forward in the 'Foreign Currency Monetary Item Translation Difference Account' as deductible revenue expenditure. 12.10. We find that the ld. AO had disallowed the aforesaid exchange fluctuation loss as notional and contingent and also capital in nature and accordingly, disallowed the same in the assessment which was upheld ....
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....er, such exchange loss should be allowed as revenue expenditure. We find that this line of argument was not taken up by the assessee for A.Y.2009-10 while addressing this issue before the Tribunal for A.Y.2009-10. Accordingly, there was no occasion for this Tribunal to adjudicate this aspect of the issue. The ld AR submitted that this exchange loss that is debited to FCMITA is not related to acquire fixed assets and hence, the same should be allowed as revenue expenditure. The ld. AR further stated that, in any event, the process of capitalisation of such exchange loss should end with the commencement of overseas investments utilizing foreign currency loans. Exchange loss for the period after acquisition of investments and therefore, be allowed as revenue expenditure according to the ld. AR. We find that the decision taken by this Tribunal in A.Y.2009-10 may not be fully applicable to the facts of the instant case and we hold that the said decision would hold good with some modifications as suggested below based on factual developments that had happened later:- (a) Foreign currency loans utilised for acquiring fixed assets and overseas investments is to be capitalised and ....
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....d in 225 ITR 798 held that the said expenditure would be capital in nature. This action was upheld by the ld. DRP. We find that this issue is now settled by the Special Bench of the Bangalore Tribunal in the case of Biocon Ltd., in favour of the assessee, wherein it has been held that the deduction is to be allowed for the difference between the exercise price of the option and the market price at the time of exercise of the option. We find that in the return of income, the assessee had claimed deduction for the difference between the exercise price and the market price on the date of grant of option. This Tribunal while rendering the decision for the A.Y.2009-10 in assessee's own case had restored this issue to the file of the ld. AO to consider the claim of deduction in the light of the Special Bench decision in the case of Biocon Ltd., We find that the ld. AR fairly submitted that in principle, this issue is decided in favour of the assessee by the Special Bench in the case of Biocon Ltd., but still in the interest of justice, a specific direction need to be given to the ld. AO to allow deduction in respect of all options exercised during the year equal to the difference between....
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....re. Further, he observed that this benefit will be given to retiring employees and not working employees and hence, not allowed as business expenditure. 14.3. Similarly, with regard to provision made for post-retirement medical scheme in the sum of Rs. 206.30 lakhs, the ld. AO disallowed the same on the same ground that it is a mere provision and contingent in nature and that the benefit will be given to retiring employees and not to working employees. The copy of the said actuarial valuation report for post retirement medical benefits is enclosed in pages 429-445 of the paper book filed before us. 14.4. We find that the issue under dispute is squarely covered in favour of the assessee by the coordinate bench decision of this Tribunal in the case of Hindustan Petroleum Corporation Ltd., in ITA No.1294/Mum/2011 vs. JCIT dated 26/09/2012. We have gone through the said Tribunal order and find that this issue is squarely decided in favour of the assessee on similar facts and circumstances. We also find that assessee had filed a modified ground of appeal before us on 'without prejudice basis' that in any case, at least the actual payment made during the year towards post retiremen....
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....apply to appellate authorities especially the Tribunal, which fact is clearly mentioned in the last paragraph of the said decision. It is not the case of the revenue that the claim made by the assessee herein to reduce the same and Rs. 3,33,56,000/- is ingenuine. We would like to place reliance on the decision of the Hon'ble Jurisdictional High Court in the case of Pruthvi Brokers and Shareholders Pvt. Ltd., reported in 349 ITR 336 (Bom) and accordingly, entertain the claim of the assessee and direct the ld. AO to reduce a sum of Rs. 3,33,56,000/- from the total income while giving effect to this order. Accordingly, the concise ground No.13 raised by the assessee is allowed. 16. The next issue to be decided in this appeal is with regard to taxability of interest income on tax free bonds amounting to Rs. 529,12,192/-. 16.1. We have heard rival submissions and perused the materials available on record. During the year under review, the company has offered to tax interest on long term and current investments amounting to Rs. 39,48.03,120 under the head 'income from other sources'. 16.2. Out of the above amount, Rs. 6,33,76,065/- relates to interest on current investme....
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.... 8.28.00.000 2,48,57,432 5,79,42.568 LAND AT WAGHOLI PUNE GAT NO 2358 0 HEC.75ARES 1,20,00,000 1,01,68,830 18,31.170 LAND AT PUNE WAGHOLI GAT NO. 2360 O.HEC 82 ARES 1,30,00,000 1,11,18,201 18,81,799 GAT NO.2359 PUNE WAGHOLI LAND 44.12 ARES 70,00,000 57,08,380 12,91,620 Total 11,48,00,000 5.18.52,843 6,29,47,157 18.1. The ld. AO adopted the valuation determined by the Stamp Valuation Authority and observed that the sale is higher than the sale consideration received by the assessee and accordingly computed the capital gains in terms of Section 50C of the Act. The ld. DRP directed the ld. AO to refer the issue to the Departmental Valuation Officer and recompute the capital gains in terms of Section 50C(2) of the Act. 17.2. Before us, the ld. AR accepted to the fact of determination of value in terms of Section 50C(2) of the Act and pleaded that the report of the Departmental Valuation Officer (DVO) in respect of subject mentioned properties were received after the order of the ld. DRP and hence, he pleaded that let these DVO reports be examined by the ld. AO and let AO recompute the capital gains in terms of Section 50C(2) ....
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....l business of the company x Rudrapur unit turn over Total turn over 19.2. This formula was adopted by placing reliance on the order of the ld. DRP for A.Y.2009-10 and 2012-13. This action was upheld by the ld. DRP. 19.3. The ld. AR before us argued that there is absolutely no finding given by the lower authorities during the year under appeal that facts of this year i.e. A.Y.2013-14 are similar to those in A.Y.2009-10. Hence, the ld. AR argued that the lower authorities grossly erred in following the DRP order of A.Y.2009-10 mechanically. He further drew our attention to the fact that the transactions related to Rudrapur unit were recorded as "Specified Domestic Transaction" (SDT) in terms of Section 92BA(v) of the Act and accordingly those transactions were duly subjected to transfer pricing assessment and were part of audit report in form 3CEB filed by the assessee. He specifically submitted that the transactions relating to Rudrapur Unit included purchase and sale of raw materials and consumables and also payment of expenses. With regard to the total transactions of Rudrapur unit, he drew our attention to the transfer pricing study report enclosed in pages 552 to 562 of....
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.... the file of the ld. AO to recompute the deduction with specific directions after primarily accepting the method of computation of eligible profits followed by the assessee. He drew our attention to the paras 55 to 59 of the said Tribunal order for A.Y.2009-10 wherein in Para 55, the Tribunal has rejected DRP's action of questioning employee cost and power cost of Rudrapur unit; sales pricing of various models/variants sold by Rudrapur unit; wherein in Para 57, it has directed the ld. AO to examine the details on record as regards inter- unit pricing; wherein in Para 58, it has directed the ld. AO to examine the issue of non-allocation of certain R & D expenses to the Rudrapur unit and also non-allocation of other items of revenue expenditure to the Rudrapur unit in the light of the explanation offered by the assessee. He argued that there was no adverse finding recorded either by the ld. AO / ld. TPO / ld. DRP during the year under appeal and hence, the finding of this Tribunal in A.Y.2009-10 cannot be made applicable to the year under appeal. 19.4. Per contra, the ld. DR submitted that this issue should be remitted back to the file of the ld. AO in light of order of this T....
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....h regard to profitability of Rudrapur Unit. In view of the aforesaid findings, we direct the ld. AO to accept the claim of deduction u/s.80IC of the Act made by the assessee in the return of income. Accordingly, the concise ground No.17 raised by the assessee is allowed. 20. In the result, appeal of the assessee in ITA No.7382/Mum/2017 for A.Y.2013-14 is partly allowed for statistical purposes. SA No.461/Mum/2019 (A.Y.2013-14) 21. Since the main appeal is decided, the stay petition preferred by the assessee in SA No.461/Mum/2019 is hereby dismissed as infructuous. ITA No.1449/Mum/2016 (Assessee appeal) A.Y.2011-12 22. The concise grounds 1-8 raised by the assessee for A.Y.2011-12 are exactly similar to concise grounds No.1-8 raised for A.Y.2013-14 in ITA No.7382/Mum/2017. The decision rendered for A.Y.2013-14 would apply with equal force for A.Y.2011-12 also except with variance in figures. The Ld. AO is directed to suitably replace the figures based on the facts provided by the assessee in the fact sheet before us. This direction is given for the sake of brevity and to avoid repetition and especially in view of the fact that the ld DR had not disputed the primary fa....
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....e was extinguishment of the rights of the assessee and hence, this reduction has resulted into a capital loss in the hands of the shareholder i.e. assessee company. 24.2. In this regard, it would be relevant to address the primary undisputed facts before us. We find that the assessee had held 24681437 shares of Rs. 10/- each in Mahindra Shubhlabh Services Ltd., The Hon'ble Bombay High Court approved the scheme of capital reduction on 25/03/2011 in terms of which, the number of shares post reduction was 9089448/- of Rs. 10/- resulting in cancellation of remaining 15591989 shares. We find that the workings for determination of capital loss in this regard are enclosed in page 465 of the paper book filed before us. We find that the assessee received no consideration of reduction of share capital. We find that the ld. AR placed reliance on the decision of Bangalore Tribunal in the case of Jupiter Capital Pvt. Ltd., in ITA No.445/Bang/2018 dated 29/11/2018 in support of the proposition that reduction in share capital amounts to transfer of capital asset u/s.2(47) of the Act and accordingly pleaded that capital loss arising on account of share capital could be allowed to be carried for....
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....ale is only one of the modes of transfer envisaged by section 2(47). Relinquishment of the asset or the extinguishment of any right in it, which may not amount to sale, can also be considered as a transfer and any profit or gain which arises from the transfer of a capital asset is liable to be taxed under section 45. 11. When as a result of the reducing of the face value of the share, the share capital is reduced, the right of the preference shareholder to the dividend or his share capital and the right to share in the distribution of the net assets upon liquidation is extinguished proportionately to the extent of reduction in the capital. Whereas the appellant had a right to dividend on a capital of Rs. 500 per share, that stood reduced to his receiving dividend on Rs. 50 per share. Similarly, if the liquidation was to take place whereas he originally had a right to Rs. 500 per share, now his right stood reduced to receiving Rs. 50 per share only. Even though the appellant continues to remain a shareholder, his right as a holder of those shares clearly stands reduced with the reduction in the share capital. 12. The Gujarat High Court had in another case as Anarka....
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....se (supra) is that whereas in Anarkali Sarabhai's case (supra), preference shares were redeemed in entirety, in the present case there has been a reduction in the share capital inasmuch as the company had redeemed its preference share of Rs. 500 to the extent of Rs. 450 per share. The liability of the company in respect of the preference share which was previously to the extent of Rs. 500 now stood reduced to Rs. 50 per share." 24.3. From the aforesaid facts before the Hon'ble Supreme Court and the decision rendered thereon, it could be seen and there was payment of cash consideration to the existing shareholder pursuant to reduction of share capital, whereas in the instant case, there is absolutely no dispute that the assessee company i.e. Mahindra and Mahindra Ltd., received no consideration on reduction of capital. Hence, the decision relied on the Hon'ble Supreme Court in Kartikeya Sarabhai supra by the Coordinate Bench of Bangalore Tribunal in the case of Jupiter Capital supra is factually distinguishable with that of the assessee herein. We find that in the facts before the Hon'ble Special Bench of Mumbai Tribunal referred supra, there was no receipt of consideration. ....
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....rdingly, the additional ground No.2 raised by the assessee is allowed. 27. In the result, the appeal of the assessee in ITA No.1449/Mum/2016 for A.Y.2011-12 is partly allowed for statistical purposes. SA No.462/Mum/2019 (A.Y.2011-12) 28. Since the main appeal is decided, the stay petition preferred by the assessee in SA No.462/Mum/2019 is hereby dismissed as infructuous. ITA No.1797/Mum/2016 (A.Y.2011-12) - Revenue Appeal 29. The only issue to be decided in this appeal is as to whether the ld. DRP was justified in holding that the dealer incentive paid by the assessee does not fall within the ambit of provisions of Section 194H of the Act and consequently, no disallowance u/s.40(a)(ia) of the Act could be made thereon. 29.1. We have heard rival submissions and perused the materials available on record. We find that during the course of assessment proceeding, a query was raised by the ld. AO about the applicability of TDS provisions to the dealer incentives and service coupon reimbursed to the dealers. The assessee responded that basically there must be a relationship of a service provider and the service receiver pursuant to which payment is made by the receiver t....
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....ded that the said payment would fall within the ambit of Section 194H of the Act warranting deduction of tax at source, for which there would be disallowance u/s.40(a)(ia) of the Act was made in the assessment. We find that this issue has already been decided in favour of the assessee for A.Y.2008-09 by this Tribunal and against that order, the revenue had preferred an appeal before the Hon'ble Jurisdictional High Court. The Hon'ble Jurisdictional High Court vide its order dated 06/02/2017 in ITA No. 1148/Mum/2014 had dismissed the appeal of the revenue. Further the Special Leave Petition (SLP) preferred by the revenue before the Hon'ble Supreme Court was also dismissed vide SLP No.37462/17 dated 12/01/2018. Hence, respectfully following the aforesaid decision, the appeal filed by the revenue of A.Y.2011-12 deserves to be dismissed and is hereby dismissed. ITA No.719/Mum/2017 (A.Y.2012-13) Assessee Appeal 30. The concise grounds 1-11 raised by the assessee for A.Y.2012-13 are exactly similar to concise grounds No.1-11 raised for A.Y.2013-14 in ITA No.7382/Mum/2017. The decision rendered for A.Y.2013-14 would apply with equal force for A.Y.2012-13 also except with variance in ....
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..... AO to modify the assessment order and allow the loss to the assessee company as consequential effect consequent to determination of final loss of MADPL. Accordingly, the concise ground No.15 for A.Y.12-13 is allowed for statistical purposes. 35. The concise ground No.16 raised by the assessee is with regard to seeking proper credit for TDS, TCS and foreign tax. 35.1. We have heard rival submissions and perused the materials available on record. From the grounds of the assessee we find that assessee is seeking credit for TDS of Rs. 7,59,98,107/-, credit for TCS of Rs. 8,33,496/- and foreign tax credit of Rs. 4,35,96,968/-. The ld. AO is hereby directed to verify the said claim and allow credit appropriately for A.Y.2012-13. Accordingly, the concise ground No.16 raised by the assessee is allowed for statistical purposes. 36. We find that assessee had raised additional ground No.2 seeking exemption from taxability in respect of interest on tax free bonds amounting to Rs. 4,47,57,189/-. This additional ground No.12 is exactly similar to additional ground No.2 raised by the assessee for A.Y.2011-12 and the decision rendered thereon would apply with equal force for A.Y.2012-13....
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.... said rule itself. This rule was inserted as a result of directions of Hon'ble jurisdictional High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein Their Lordships had, inter alia, directed that "We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment". In the ruled so framed, as a result of these directions, the expression "ordinarily" has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether the passin....
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....clause) maybe invoked, wherever considered appropriate, following the due procedure...". The term 'force majeure' has been defined in Black's Law Dictionary, as 'an event or effect that can be neither anticipated nor controlled' When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an "ordinary" period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is ....