TaxTMI 
TaxTMI 
2022 (12) TMI 1477
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.... the assessee has raised various grounds for A.Y. 20011-12, the only effective issue to be decided is as to whether the ld. PCIT was justified in assuming revisionary jurisdiction u/s. 263 of the Act in the facts and circumstances of the case. The grounds raised by the assessee challenged the validity of assumption of jurisdiction u/s. 263 by the ld. PCIT as well as adjudication of the issue on merits. 3. We have heard rival submissions and perused the materials available on record. The return of income for the A.Y. 2011-12 was filed by the assessee on 30/11/2011 declaring total income of Rs. 8501,32,75,637/- under normal provisions of the Act. The final assessment was completed pursuant to the directions of the ld. Dispute Resolution Panel (DRP) on 25/01/2016 vide order u/s. 143(3) r.w.s. 144C(13) of the Act determining total income at Rs. 9302,36,17,248/- under normal provisions of the Act. The ld. AO in the said final assessment order had observed that since the tax computed under normal provisions of the Act is more than the tax computed u/s. 115JB of the Act, the income is finally determined under normal provisions of the Act as the a....
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.... concept of borrowing. If there is no obligation to refund the capital provided interest on such capital is not deductible 4. The Hon'ble DRP has sustained an identical disallowance in the case of the assessee for A.Y. 2013-14. (ii) In view of the aforesaid facts and provisions of the Act, the Assessing Officer was required to examine and disallow the aforesaid claims of reduction from taxable income. However, no such examination or disallowance was made. The failure of the Assessing Officer to make the enquiries which were warranted in the facts and circumstances of the case and under the provisions of law and failure to disallow the aforesaid claims of reduction has rendered the assessment order dt 25.01.2016 erroneous in so far it is prejudicial to the interest of revenue." 3.1. The assessee filed its written submissions in response to the show cause notice stating that the ld. PCIT could invoke revision jurisdiction u/s. 263 of the Act only if the order has been passed by the subordinate authority i.e. the Assessing Officer. In the instant case, the final assessment order dated 25/01/2016 was passed pursuant to the directions of the ld. DRP which c....
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....missioner shall not invoke Section 263 of Act 1961 whereas similar Clause is not forth coming in respect of the matter examined by DRP against Draft Assessment Order of the AO along with objections of the Assessee. Therefore, the contention of the petitioner that respondent does not have power to invoke Section 263 of the Act insofar as examination of Final Assessment Order along with Assessee's objection pursuant to the DRP decision, is untenable. No-doubt DRP panel consists of three Commissioners and Principal Commissioner examining or sitting over decision of the DRP may not be appropriate. At the same time, one cannot lose sight off, of a statutory provision like Section 263 of Act 1961, unless and until Section 263 of Act 1961 prohibits to examine the Final Assessment order, pursuant to the DRP decision. One cannot go beyond the statutory provision and so also 'read' or 'add' words by the Courts while interpreting a statutory provision. Time and again, Supreme Court and other Courts have held that in a matter of interpretation of statutory provisions, Court cannot 'add any words or sentence'. Even if there is any ambiguity, at the best Court can rea....
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....ible Debentures ('PNCDs') (also know as "Hybrid Securities") on private placement basis, of Rs. 1500 crs at the rate of 11.50% per annum for first 10 years. PNCDs are perpetual in nature with no maturity or redemption and are callable only at the option of the Company. The Company can exercise a call option to redeem the PNCDs at par only at the end of 10 years from the date of allotment of PNCD and at the end of every year thereafter. 2. The company has incurred various expenses amounting to Rs. 24,85,25,000/-, in connection with the PNDC. The details of the same are attached in 'Annexure A'. 3. The term Debenture has been defined in the section 2(12) of the Companies Act, 1956 as "debenture" includes debenture stock, bonds and any other securities of the company, whether constituting a charge on the assets of the company or not." As per the Oxford English Dictionary, Second Edition, 'A bond issued by a corporation or company (under seal), in which acknowledgement is made that the corporation or company is indebted to a particular person or to the holder in a specified sum of money on which interest is to be paid until repayment of principal. ....
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....re of Equity Share Capital nor Preference Share Capital f. In the event of the liquidation of the Company, the PNDC holders would not be entitled to share in the assets of the Company. 4.3. The assessee also placed reliance on the following decisions in support of its claim of deduction of issue expenses and interest as revenue expenditure before the ld. AO:- (a) Decision of the Hon'ble Supreme Court in the case of India Cements Ltd. vs. CIT reported in 60 ITR 52. (b) Decision of the Hon'ble Rajasthan High Court in the case of CIT vs. Secure Meters Ltd reported in 221 CTR 405 (Raj) (c) Decision of the Hon'ble Jurisdictional High Court in the case of Premier Automobiles Ltd vs. CIT reported in 80 ITR 415 4.4. Based on the aforesaid factual submissions and judicial precedents, the assessee concluded that the expenses of Rs. 24,85,25,000/- incurred on the issue of PNCDs i.e. Hybrid Securities are Revenue in nature allowable as business expenses. The assessee also gave the details of issue expenses as under:- 4.5. The assessee also enclosed the relevant portion of the Information Memorandum for issue of Unsecured, Subordinated Perpetual....
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....lies were filed by the assessee, the ld. PCIT changed his stand that "full enquiry" was not made by the ld. AO on the impugned issue. This is evident from para 7.2 of his order. Again somewhere in the middle in para 7.2, the ld. PCIT again states that the assessment was framed by the ld. AO "without making enquiries". This proves the complete shifting of stand by the ld. PCIT from "No Enquiry" to "Inadequate Enquiry" and to "No Enquiry". Finally in para 7.6 of his order, the ld. PCIT concludes that "full enquiry" was not made by the ld. AO. This categorically goes to prove that nonapplication of mind by the ld. PCIT. The law is very well settled that revision jurisdiction u/s. 263 of the Act could be invoked only when there is "lack of enquiry" and not when there is "inadequate enquiry". However, in the instant case before us, it is not a case of "inadequate enquiry" by the ld. AO. In fact, the ld. AO had enquired the matter in full and had taken to its logical conclusion while framing the assessment. Hence, the provisions of Explanation 2 to Section 263 of the Act which came into effect from A.Y. 2015-16 also would not be applicable in the instant case. Moreover, we find....
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....reover, we also find that these bonds were indeed repaid by the assessee on 18/03/2021 with interest and on 11/05/2021 with interest. The evidences in this regard are enclosed in pages 254 and 255 of the paper book filed before us and the fact of repayment of these borrowings with interest had also been duly notified by the assessee to BSE Ltd. and NSE Ltd as per the requirement of SEBI regulations. For the sake of convenience, the intimation given to BSE and NSE are reproduced hereunder: 4.8. This categorically goes to prove that it is not a case of equity and the issue of perpetual bonds is only borrowing made by the assessee. Since the said borrowing has been used for business purposes of the assessee, the interest paid thereon would be squarely allowable as deduction u/s. 36(1)(iii) of the Act. Hence, even on merits, the action of the ld. PCIT would have no legs to stand. 5. We further find that similar issue was subject matter of adjudication by this Tribunal in the context of section 263 proceedings itself by the ld. PCIT in the case of Tata Power Company Ltd., in ITA Nos. 2710, 2711/Mum/2018 and 6720 & 7608/Mum/2019 for A.Yrs. 2012-13 and 2013-14 respectively date....
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....the offer document the terms and conditions of issuing perpetual debentures, basis of allotment, creation of debenture redemption reserves along with object of the issue were clearly mentioned. As per the copy of object of the issue placed at page 67 of the paper book, it is mentioned that utilization of funds to be raised through this private placement will be for general business purpose and at page No. 62 issue size was mentioned of 15000 debentures of face value of Rs 10 lac each aggregating to Rs. 1500 crores. It is demonstrated from the detailed submission and copies of documents placed in the paper book that assessing officer has made detailed inquiry/verification during the course of assessment proceedings that assessee has borrowed funds for business use by issue of debentures. The borrowed fund were payable on call option exercising by company after the 10th year or any at the end of every year thereafter. It was also explained that the lenders were not entitled to share any surplus or bear any loss like shareholders. Debentures trustee were appointed to safeguard Interest of the lenders. The assessee company had also stated on the basis of aforesaid discussion that it ha....
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....crip Code: 500470/890144 947146 (PHS) Dear Madam, Sirs, March 18, 2021 National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051. Maharashtra, India. Symbol: TATASTEEL/TATASTLPP 11.80% Perpetual Hybrid Securities with ISIN INE081A08165 aggregating to 1,500 crore ('PHS') This is with reference to our letters dated November 13, 2020 and February 11, 2021 intimating about the exercising of call option to redeem the abovementioned PHS in full, together with final interest at the rate of 11.80% p.a. (payable semi-annually) on March 18, 2021 and setting the record date for the same. In view of the above and in terms of Regulation 57(1) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, we certify that final interest at the rate of 11.80% p.a., along with full Principal amount of 1,500 crore was paid on the above mentioned PHS today i.e. on March 18, 2021. This is for your information and records. Yours faithfully, Tata Steel Limited Pasvaneesan Parvatheesam Kanchinadham Company Secretary & Chief Le....