Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 887 - HC - Income TaxMAT - Addition being provision for wealth tax, while computing the Book profits u/S. 115JB - Held that:- The legislature has advisedly not included wealth tax in this clause. By no interpretative process, the wealth tax can be included in clause (a). The Revenue, further made a vague attempt to bring this item in clause (c) noted above. Clause (c) would include the amount set aside for provisions made for meeting liabilities other than ascertained liabilities. For applicability of this clause, therefore, fundamental facts would have to be brought on record which in the present case, the Revenue has not done. In fact, the entire thrust of the Revenue's argument at the outset appears to be on clause (a) which refers to the income tax which according to the Revenue would also include wealth tax. This question, therefore, is not required to be entertained. Addition being gain on extinguishment of debentures / bonds treated as income u/s 41(1) - Held that:- In the present case, the Revenue has not established these basic facts. In other words, it is not even the case of the Revenue that in the process of issuing the bonds, the assessee had claimed deduction of any trading liability in any year. Any extinguishment of such liability would not give rise to applicability of sub-section (1) to Section 41 of the Act. Also notice that the decision of this Court in the case of Mahindra and Mahindera Ltd [2003 (1) TMI 71 - BOMBAY HIGH COURT] came to be confirmed by the Supreme Court in the case of Commissioner Vs. Mahindra & Mahindra Ltd [2018 (5) TMI 358 - SUPREME COURT]. It was reiterated that for applicability of Section 41(1) of the Act, it is a sine qua non that there should be an allowance or deduction claimed by the Assessee in any assessment year in respect of loss, expenditure or trading liability incurred by the assessee. Then, subsequently, during any previous year, if the creditor remits or waives any such liability, then the Assessee is liable to pay tax Under Section 41 of the IT Act. This question, therefore, does not require any consideration. Commission / surcharge paid to State Oil Marketing Organization (“SOMO”), an Iraqi Government Agency - disallowance - Volcker Committee report (India being a member state of the UN) which was prepared after due diligence and investigation of documents as well as personnel interviews - Revenue argues that the assessee had paid illegal commission for purchase of such oil and therefore, such expenditure was not allowable - Held that:- CIT(A) in detail order while reversing the disallowance made by the Assessing Officer, observed that there was no evidence that the assessee had paid any such illegal commission. He noted that except for the Volcker Committee Report, there was no other evidence for making such addition. He noted that even in the said report, there is no finding that the assessee had made illegal payment. It appears that the payments were made by an agent and there was no evidence to suggest that the assessee had made any illegal commission payment to Iraqi government. The Tribunal confirmed this view of the CIT(A). The entire issue is thus based on appreciation of materials on record and is a factual issue. No question of law arises.
|