2016 (11) TMI 1302 - ITAT MUMBAI

Validity of assessment u/s 144C - Held that:- the claim of the assessee company that as the insertion of Sec. 144C had created new rights and obligations, not only in favour of assessee, but also in favour of DRP and concerned assessing officer, therefore by implication the said statutory provision would partake the color and character as that of a 'Substantive provision', is not found to be acceptable and is hereby rejected.

In the case of the assessee company, the A.0 who remained under a statutory obligation to frame the assessment, not later then 31.01.2012, is found to have framed the same as on 19.01.2012, therefore the same is within the period of limitation. Thus the claim of the assessee company that the assessment framed by the A.0 is barred by limitation, is rejected.

Treating remittances by the assessee company to its 'AE' towards 'Share application' money as loans and advances - adjustment/addition towards impugned interest computed @14% p.a w.r.t the aforesaid amount in the hands of the assessee company - Held that:- We herein set aside the order of the Ld. CIT(A), to the extent the latter had upheld the order of the A.0 treating remittances to the extent of US $ 6,60,000/- by the assessee company to its 'AE', i.e M/s Taurian CISA at Abdidjan Ivory Coast of South Africa (the 'WOS' of the assessee company) towards 'Share application' money, as loans and advances, and on the said basis had thus sustained the consequent adjustment/addition towards impugned interest computed @14% p.a w.r.t the said amount in the hands of the assessee company. That the order of the Ld. CIT(A), to the extent relatable to remittance of US $ 2,00,000 to its aforesaid 'WOS', and the consequent adjustment/addition as regards the same is however sustained, however the A.O/TPO is herein directed to work out and restrict the said adjustment/addition by adopting rate of interest as 6 months LIBOR plus 150 basis point for the delayed receipt of the payments by the assessee company from its aforesaid WOS/AE.

Disallowance of 'lease rentals' - whether the 'lease transaction' executed by the assessee company was a Finance lease' and not an 'Operating lease'? - Held that:- We herein set aside the order of the Ld. CIT(A) to the extent the latter had upheld the order of the A.0 who despite holding the lease transaction as that being in the nature as that of a 'Finance lease', had however declined to allow the claim of the assessee company towards 'depreciation' and 'Interest', and herein direct the A.0 to verify the amount of loan and the amounts of interest payments made by the assessee company during the year under consideration towards such loans taken for purchase of railway wagons through finance lease method and allow the claim of interest payment accordingly. Still further the A.O is directed to verify the rate and amount of depreciation on the railway wagons to which the assessee company would stand entitled as per Sec. 32(1) of the 'Act' r.w the Income tax rules and allow depreciation in the hands of the assessee company.

Disallowance of difference in value of the forward contracts as on the date on which contract was entered into and the rate prevailing as at the end of the financial year, on the ground that the same represents notional loss - Held that:- As before us it was at the very outset submitted by the Ld. A.R for the assessee company that as the A.0 vide his assessment order dated. 26/03/2013 so passed for A.Y. 2009-10, had allowed the impugned loss in the said year, therefore the same may not be allowed in the year under consideration. We have considered the aforesaid submission of the Ld. A.R and in the background of the said factual position, going by the statement of the Ld. A.R that as the impugned loss had been allowed by the A.0 while framing assessment in the hands of the assessee company for A.Y. 2009-10, therefore the same may not be allowed in the year under consideration, the said ground of appeal is dismissed as not pressed by the assessee company.

Levy of Interest u/s 234A, 234B and 234C is mandatory, automatic and consequential, no infirmity can be attributed to the general observation of the CIT(A) therein directing the A.0 to levy interest at the time of giving appeal effect to his order