Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

REDINGTON (INDIA) LTD. Versus ASSISTANT COMMISSIONER OF INCOME-TAX

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 assessee, therefore, it is outside the ambit of international transaction to which .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt 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.

Disallowance under section 14A - assessee now claims before this Tribunal that the inve .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t 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 the Assessing Officer. The Assessing Officer shall re-examine the issue afr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 guarantee provided to associated enterprise, namely, M/s. Redington Distribut .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oss 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 the Delhi Bench of this Tribunal in Bharti Airtel Ltd. v. Addl. CIT [2014] .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ilable 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 associated enterprise does not involve any cost to the assessee, therefore, it is ou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 assessment year 2009-10 in the assessee's own case and the judgment of the apex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ark "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 Tribunal is of the considered opinion that the claim of the assessee has to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nvestment 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 consideration. Referring to the decision of this Tribunal in Asst. CIT v. Shri M. B .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ubramanian, 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 representative, a portion of the expenditure attributable for making such a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Excise duty credit on finished stock at additional place of business.

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Forum: GST rates on mobile recharge business

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Forum: import purchase

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Forum: 3B mistake

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters

Highlight: It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission - HC

Highlight: Deemed dividend u/s 2(22)(e) - advances given to societies - in the absence of legal right of the assessee in the said society the amount advanced cannot be treated as deemed income.

Highlight: When electrical installations are treated as plant and machinery the depreciation has to be allowed @ 25% as per provisions contained u/s 32

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 – comments and suggestions-reg.



|| 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