Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 1021 - AT - Income TaxDisallowance of loss on foreign exchange derivatives - HELD THAT:- Reliance placed on the decision of DCIT vs. Tega Industries Ltd [2019 (11) TMI 269 - ITAT KOLKATA] wherein also the issue of MTM loss has been allowed in the favour of the taxpayer on both counts i.e. such loss is neither speculative loss within the meaning of section 43(5) of the Act nor the same being notional or contingent in the nature. Hence the said sum being loss on foreign exchange derivatives deserves to be allowed in the light of the order of Hon’ble Tribunal of the preceding assessment year i.e. AY 2008-09 [2017 (3) TMI 966 - ITAT KOLKATA] wherein the facts are identical.D/R, could not controvert the arguments of the assessee that the facts are identical for both the Assessment Years. Thus, consistent with the view taken by the co- ordinate bench of the Tribunal in the assessee’s own case we delete the disallowance on account of loss on foreign exchange derivatives and allow this ground of the assessee. Disallowance u/s 14A r.w.r. 8D- HELD THAT:- We restrict the disallowance u/s 14A of the Act to the extent of exempt income earned by the assessee company during the year.The argument that the Assessing Officer has not recorded satisfaction before the invoking Rule 8D of the Income Tax Rules, 1962 (‘Rules’), is not factually correct. On a reading of the assessment order, we find that he Assessing Officer has recorded his satisfaction. In the result, ground of the assessee is allowed in part. Disallowance of non compete fee - Allowable expenditure - HELD THAT:- Coming to the facts in the present case, it is undisputed fact that the consideration is paid to individuals who had experience in the business of consultancy for not to engage themselves in similar kind of business and activities for a period of 3 years. It is also not disputed that such consideration is independent and not part of the cost of acquisition of business paid to shareholders. It is also an admitted fact that both the Share Transfer Agreement and Non-Compete Agreement are separate agreements with different parties, though entered on the same date.The cases relied upon by the assessee above are squarely applicable on the facts of the assessee’s case, Thus, the payment in question is revenue in character and hence allowable as an expenditure. Disallowance of depreciation on leased assets and non-grant of claim of principal portion of lease rentals - HELD THAT:- As decided in assessee's own case [2016 (7) TMI 1052 - ITAT KOLKATA] wherein the coordinate Bench of the Hon’ble Kolkata Tribunal dismissed the Revenue’s appeal and upheld the order of the CIT(A) by holding that the lease rentals (net of interest element) should be allowed as deduction. Disallowance of PWC World firm charges - HELD THAT:- As decided in own case [2018 (9) TMI 1812 - ITAT KOLKATA] find no substance in Revenue’s instant stand. We make it clear that the assessee- company is engaged in multi functional consultancy services as a group entity of PWCDA organization based in Netherlands. Learned counsel has also filed before us relevant assessment records with regard to the payee entity pertaining to the impugned assessment year itself accepting the returned income without making any addition. Necessary reference regarding Firm Services Agreement is also made - no TDS is deductible in case of such firm services agreement payments not including any income component but only reimbursement of expense on cost allocation formula. Addition on account of non refundable grant - HELD THAT:- Grant received for specific purpose i.e., for procuring a capital asset is in the nature of a capital receipt, not subject to tax and this receipt being in cash cannot be taxed u/s 28(iv) of the Act. Hence this ground of the assessee is allowed. Non grant of deduction u/s 35(1)(II) - HELD THAT:- We restore this matter to the file of the Assessing Officer with a direction to verify the certificate issue u/s 35(1)(II) of the Act, which was produced by the assessee before the lower authorities. The Assessing Officer shall dispose off the issue de novo, in accordance with law. This ground of the assessee is allowed for statistical purposes.
|