2021 (12) TMI 462 - CALCUTTA HIGH COURT - Income Tax

Head Note / Extract:
Addition u/s 14A r.w.r. 8D - Sufficiency of assessee own funds - HELD THAT:- As per the decision of South Indian Bank Ltd. [2021 (9) TMI 566 - SUPREME COURT] issue decided is against the revenue. Disallowance of aircraft and maintenance charges including depreciation being 10% of the expenditure on running, repairs and maintenance of aircraft of which were used for the personal purposes of the Directors - HELD THAT:- We find that the issue is fully factual and the Tribunal had pointed out that such claim made by the assessee was allowed in the assessee's own case for the earlier assessment years [2018 (7) TMI 2238 - CALCUTTA HIGH COURT] Deemed short term capital gains computed under section 50 on long term depreciable assets set off against long term capital loss under section 74 - HELD THAT:- Tribunal followed the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax, Panji Vs. V. S. Dempo Company Ltd. [2016 (10) TMI 62 - SUPREME COURT]. Therefore, the question no.(iv) is not entertained. Appeal is admitted only on the following substantial questions of law: "(i) Whether on the facts and in the circumstances of the case, the Learned Tribunal fell in error in excluding investment in subsidiaries and consider only such investment that had yielded only dividend income/exempt income for computing disallowance under section 14A of the Income Tax Act read with Rule 8D(iii) of the Rules? (ii) Whether on the facts and in the circumstances of the case, the Learned Tribunal fell in error in reversing the order passed by the Assessing Officer and upheld by the Dispute Resolution Panel holding that providing corporate guarantee by the assessee to its Associated Enterprise for the purpose of business amounts to international transaction as per the explanation to section 92B of the Income Tax Act and rightly applied the Arms Length Method (ALP) fixing the guarantee fee rate at 3%? (iii) Whether the Learned Tribunal committed substantial error of law in deletion of the addition of ₹ 2,56,49,228/- made by the Assessing Officer by holding that guarantee fee rate of 3% to the Arms Length for marking the transaction of receipts of corporate guarantee from the subsidiary? (iv) Whether the Learned Tribunal fell in error in disregarding that there was a clear benefit accrued to the Associated Enterprises by the guarantee provided accepted even by the assessee and when such benefit was passed on by the assessee to the AE's, guarantee commission should have been charged at the Arms Length Price?"