TaxTMI 
TaxTMI 
2026 (8) TMI 455
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....in partly upholding the additions made by the Assessing Officer in the assessment order passed under section 143(3) r.w.s 144C(1) of the Act. Validity of the assessment order on account of reference to Transfer Pricing Officer u/s. 92CA of the Act 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding. the validity of reference made by the Assessing Officer to the Transfer Pricing Officer (TPO) under section 92CA of the Act, thereby upholding that the transaction with Fiora Services Limited would fall within the ambit of specified domestic transactions under section 92BA read with section 40A(2) of the Act and therefore the Assessing Officer was correct in passing the order within the extended time limited allowed under section 153 of the Act. Disallowance of deduction claimed in respect of discount on Gift cards sold 4 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the disallowance made by the Assessing Officer of discount on unredeemed Gift Cards, on the ground that the gift cards are redeemed in subsequent years and accordingly corresponding discount h....
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....tion Discount) Rs. 6,79,80,994/- (Sales Promotion Club West Store Credit Redeemed), and Rs. 34,41,382/- (Customer Loyalty Program) while computing book profit under section 115JB of the Act, without appreciating the fact that there was no specific finding in the assessment order for making addition while computing book profits under section 115JB of the Act. 11. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in taking contradictory stand by allowing the deduction for the said expenditure, subject to verification by the Assessing Officer, while computing the total income of the Appellant under the normal provisions of the Act and therefore erred in holding that the same is not allowable while computing book profits under section 115JB of the Act. Deduction of interest charged on income tax against income received from the income-tax Department 12. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not granting deduction of interest charged under section 234B and under section 234C of the Act against the interest received under section 244A from the Income-tax Department which was of....
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....ile computing book profit under section 115JB of the Income-tax Act, 1961, by relying on the decision of the Special Bench of the ITAT in the case of Vireet Investment Put. Ltd. vs. CIT (82 taxmann.com 415) however the said decision has been challenged by the Department and is pending adjudication before the Hon'ble High Court. 7. Whether Ld. CIT(A) failed to consider that the disallowance under section 14A represent expenditure relatable to income not forming part of total income under the Act, and such expenditure ought to be considered for the purpose of computing the book profit under section 115JB in accordance with clause (f) of Explanation I to section 115JB(2). 8. "Whether Ld. CIT(A) erred in not appreciating that clause (f) of Explanation 1 to section 115.JB(2) specifically requires the addition of expenditure relatable to exempt income to the book profit, and the computation made under Rule &D provides a reasonable basis for determining such expenditure?" 9. "The appellant craves the leave to add, amend, alter and/ or delete any of the grounds of appeal as above" 3. Brief facts of the case are that the assessee-company is engaged in the b....
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....onfirming the various other disallowances. 5. We have heard the submissions of learned Authorised Representative (ld. AR) of the assessee and the learned Commissioner of Income Tax - Departmental Representative (ld. CIT-DR) for the Revenue. First, we have taken the various grounds of appeal raised by Revenue and inter- connected grounds of appeal raised by assessee in appeal. Ground no. 1, 2 & 6 to 8 in revenues relates to disallowance under section 14A. Brief facts relating to disallowance under section 14A are that during assessment, the assessing officer has noted that assessee has shown exempt dividend income of Rs. 6,99,349/- and made suo moto disallowance of Rs. 23,935/- towards direct and indirect administrative expenditure. The assessing officer recorded that investments for earning exempt income are of Rs. 951.42 crore. The suo moto disallowance was not accepted by assessing officer. On show cause notice as to why disallowance under section 14A be not made. Assessee in its reply dated 17.11.2016 stated that they have made suo moto disallowance of Rs. 23,935/ -. The assessee has surplus fund generated from business as well as raised from share holders for retailing busin....
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....8, the similar disallowance was made by assessing officer and was confirmed by ld. CIT(A). However on further appeal before Tribunal by following the decision of Tribunal in lead case in ITA No. 5775/M/2024 for A.Y. 2007-08 to 2013-14 dated 15.07.2012 allowed relief to the assessee on the ground that no proper satisfaction has been recorded by assessing officer as prescribed under section 14A(2) and directed to accept the suo moto disallowance. The ld. AR of the assessee further submits that interest free funds with assessee are in far excess to the investment made by assessee; such fact is not disputed by assessing officer. The ld AR of the assessee further submits disallowance made under section 14A cannot be added to the book profit under section 115JB as has been held by Special Bench of Delhi Tribunal in ACIT vs Vireet Investments ltd. (2017) 82 taxmann.com 415 (SB). 8. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We have also deliberated on the decision of Co-ordinate Bench of Tribunal in assessee's own case for A.Y. 2008-09 to 2013-14 and in A.Y. 2017-18. On careful perusal of such order ....
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....Tata Autocomp Systems Ltd. ITA No. 7596/M/2012 and Tata Chemicals Ltd. in ITA No. 2956 & 3383/M/2015. The ld. CIT(A) quoted the relevant part of decision in case of Rallies India Ltd. (supra). The ld. CIT(A) concluded that nature and purpose of the brand equity payment made by assessee is identical in various cases recorded by him. Tata Sons has entered into standard agreement with multiple group companies including assessee on similar term. Thus, by following the order of Tribunal in Tatas Group cases, the assessee was allowed relief and deleted the disallowance of Rs. 1.74 crore. Aggrieved by the order of ld. CIT(A), the Revenue is in appeal before us. 10. The ld. CIT-DR for the revenue relied upon the order of assessing officer and would submit that assessee is having its own brand value. 11. On the other hand, the ld. AR of the assessee supported the order ld. CIT(A). The ld. AR of the assessee submits that assessee has made payment of brand equity fees to Tata Sons Ltd. pursuant to brand agreement dated 23.12.1999 for the use of business name, marks and marketing indcia. 12. We have considered the rival submissions of both the parties and perused the orders of lower a....
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....ion. In case of expiry no actual discount is ever applied, thus, no expenses arise. Therefore, the expenditure is certain and not contingent. The ld. CIT(A) on considering the submission of assessee concurred with the action of assessing officer. The ld. CIT(A) held that discount offered is a Revenue expenses but timing of deduction depend on the matching concept that allows the expenses to be matched with the income when it is earned. Thus, the discount is an allowable expense when gift cards / vouchers are actually redeemed. When the assessee company sell the cards at a price lower than the face value, the "discount" represents an economic expense to the company in return of upfront cash. Thus, discount should be recognised in profit and loss account only in the period when corresponding voucher is redeemed that is when the Revenue is recognised. Until redemption, the assessee company merely holds cash against a future obligation, so neither the discount nor any cost of sale is booked upfront as revenue expenditure. Hence, the assessing officer rightly disallowed amount attributable to unredeemed gift cards and vouchers aggregating to Rs. 11,51,363/-. Aggrieved by order of ld. CI....
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....e entire amount of Rs. 1000 received is being offered to tax by the assessee in the year when in which it is underutilised. To support his submission the learned AR of the assessee relied upon decision of honourable Supreme Court in case of Taparia Tools Ltd. (2015) 372 ITR 605 (SC), wherein it was held that though the entire expenditure was incurred in that year, it was the assessee who wanted to spread over. It was noted by Apex Court that they are conscious of the principle that normally revenue expenditure is to be allowed in the same year in which it is incurred, but at the instance of assessee, who wanted spreading over, the court agreed to allow the assessee that benefit when it was found there was a continuing benefit to the business of the company over the entire period. It was held that normally the ordinary rule is to be applied, namely revenue expenditure incurred in a particular year is to be allowed in that year. If the assessee claims that expenditure in that year, the revenue department cannot denied the same. However, in those cases where the assessee himself wanted to spread the expenditure over a period of ensuing years, it can be allowed only if the principle of....