Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (11) TMI 853 - ITAT CHENNAI

2015 (11) TMI 853 - ITAT CHENNAI - [2015] 42 ITR (Trib) 408 (ITAT [Chen]) - Adjustment of corporate guarantee provided to associated enterprise - Held that:- As for the assessment year 2007-08 [2015 (8) TMI 40 - ITAT CHENNAI ], a similar adjustment was made wherein this Tribunal after placing its reliance on the decision of Bharti Airtel Ltd. v. Addl. CIT [2014 (3) TMI 495 - ITAT DELHI] found that providing corporate guarantee to its associated enterprise does not involve any cost to the assesse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce on the order of this Tribunal in the assessee's own case for the assessment year 2009-10 and the judgment of the apex court in S. A. Builders Ltd. v. CIT (Appeals) [2006 (12) TMI 82 - SUPREME COURT ] this Tribunal found that the expenditure claimed by the assessee is an allowable expenditure. Since the facts are identical, this Tribunal is of the considered opinion that the claim of the assessee has to be allowed as business expenditure. - Decided in favour of assessee.

Disallowanc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l interest on the borrowed funds. Since the assessee specifically claims that no borrowed funds were diverted for investment in other companies, this Tribunal is of the considered opinion that funds available with the assessee on the date of making investment has to be examined. Accordingly, the orders of the lower authorities are set aside and the issue of disallowance made by the Assessing Officer under section 14A of the Act to the extent of ₹ 2,55,33,000 is remitted back to the file of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he appellant. S. Balasubramanian for the respondent. ORDER The order of the Bench was delivered by 1. N. R. S. Ganesan (Judicial Member).-This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-V, Chennai, dated October 26, 2012 and pertains to the assessment year 2008-09. 2. Shri R. Vijayaraghavan, learned counsel for the assessee submitted that the first issue that arises for consideration is adjustment of ₹ 5,49,000 in respect of corporate g .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cost to the assessee, therefore, it has no bearing on the profit, income, loss or assets of the assessee. Therefore, such guarantee is outside the ambit of international transaction. 4. On the contrary, Shri S. Balasubramanian, the learned Departmental representative submitted that an identical issue came before the Tribunal with regard to corporate guarantee provided by the assessee to the very same associated enterprise at Singapore. This Tribunal after placing its reliance on the decision of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dered the rival submissions on either side and also perused the material available on record. As rightly submitted by learned counsel and the learned Departmental representative, for the assessment year 2007-08, a similar adjustment was made to the extent of ₹ 1,84,17,371. This Tribunal after placing its reliance on the decision of the Delhi Bench of this Tribunal in Bharti Airtel Ltd. v. Addl. CIT [2014] 2 ITR (Trib)-OL 475 (Delhi), found that providing corporate guarantee to its associat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

following the decision of this Tribunal in the assessee's own case for the assessment year 2007-08, the addition made by the lower authorities to the extent of ₹ 5,49,000 is deleted. 6. The next issue that arises for consideration is disallowance of trade mark licence fee. 7. Shri R. Vijayaraghavan, learned counsel for the assessee submitted that the very same issue came before this Tribunal for the assessment year 2007-08. This Tribunal, referring to its earlier order for the assessm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat nothing uncommon in the assessee's making payment to use the trade mark "Redington" to M/s. Redington Distribution Pte. Ltd., Singapore. By placing its reliance on the order of this Tribunal in the assessee's own case for the assessment year 2009-10 and the judgment of the apex court in S. A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1 (SC), this Tribunal found that the expenditure claimed by the assessee is an allowable expenditure. Since the facts are identical, this .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hri R. Vijayaraghavan, learned counsel for the assessee submitted that the investment was made out of the internal accruals. Learned counsel further submitted that the paid-up capital and reserves and surplus of the assessee for the year ending March 31, 2008 was ₹ 5,69,55,22,000. The investment in Indian companies were only to the extent of ₹ 89,07,33,000. Learned counsel further submitted that the assessee has not received any income by way of dividend during the year under conside .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y of which is filed before this Tribunal. 12. On the contrary, Shri S. Balasubramanian, the learned Departmental representative submitted that as on March 31, 2008, the assessee made investment to the extent of ₹ 3,20,82,00,000 as against ₹ 2,38,07,00,000 in the preceding year. The assessee has not offered any dividend income for taxation. The Assessing Officer also found that no disallowance was made by the assessee under section 14A of the Act. According to the learned Departmental .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version