TaxTMI 
TaxTMI 
2025 (6) TMI 151
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....n Appeals No.CIT(A), Delhi-5/10315/2019-20 and NFAC/2017-18/10089095 arising out of the appeals before it against the orders dated 27.12.2019 and 27.09.2021 passed u/s 143(3) and 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the DCIT, Circle-13(2), New Delhi and NFeAC (hereinafter referred to as the Ld. AO), respectively. 2. Heard and perused the records. The assessee company is engaged in the business of manufacturing of ERW, black and galvanized steel pipes and tubes in different thickness conforming to the various national and international standards. In the relevant years before this Bench, the assessee's returns were selected for scrutiny leading to certain disallowances which have been delete....
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....rig superintendent and assistance in operation and maintenance were provided by M/s JDIL and no equipment was provided by JDIL to assessee during the year under consideration. The assessee was only charged by JDIL @ $850 per day for providing rig manager/rig superintendent and providing assistance in operation and maintenance and the invoices issued by the assessee were accepted by ONGC and this establishes the rendering of services as received by the assessee from JDIL. It was submitted that the Rig Division of the assessee has reported a profit of Rs. 24.03 crore during AY 2016-17 and incurred expenses of Rs. 4.08 crore on technical services obtained from JDIL which shows that the assessee company was able to generate additional profit by....
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....ight of the division's profitability. Further there is substance in the contention of ld. Counsel, that the disallowance of the technical know-how fees has resulted in the same income being taxed twice, once as an expense in the hands of the assessee and again as income in the hands of M/s JDIL. The technical know-how fees paid or payable by the assessee company to JDIL is a legitimate business expense for the assessee, while it is recognized as income for JDIL. The ld. CIT(A), in its order righlty observed that both the assessee and JDIL fall within the same tax bracket under the provisions of the Income Act, therefore, no additional benefit has accrued to either the assessee company or JDIL from the transaction. 6. Even otherwise, ....
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.... segments reported in financial statements observed that Power-Electricity Division was showing losses of Rs. 12,79,82,440/- in AY 2016-17 and, accordingly, required the assessee to submit segregated balance sheet and P&L Account for this segment and to establish that the power has actually been supplied. The necessary evidences were filed. It was submitted that there are no separate segment of Power and Electricity division as the segment was not generating any revenue from selling of electricity. That it is only the requirement of auditor to show Power Electricity Division as a separate segment in the financial statements. 8. The ld.CIT(A) has appreciated that no revenue was generated from these reported segments and the electricity ge....
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.... year. The ld. counsel has pointed out that during the year the assessee had received rent from agricultural land of Rs. 7 lakhs and against this, the assessee had disallowed Rs. 4,245/- being expenses incurred in relation to this exempt income from agricultural land and declared Rs. 69,57,550/- net exempt income. The total investment in the agricultural land is of Rs. 29,42,500/-. The ld.CIT(A) has taken this investment as the base and 1% of the same has been disallowed which comes to Rs. 2,94,250/-. The law in this regard is no more res integra and the Hon'ble Delhi High Court in the case of ACB India Ltd. vs. ACIT, ITA 615/2014 and Cargo Motors Pvt. Ltd. vs. DCIT (2022) 10 TMI 571, vide order dated 07.10.2022 has held that it is not all ....