TMI Blog2021 (4) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court has confirmed the order of the Tribunal wherein the Tribunal estimated the guarantee commission at the rate of 0.50%. We therefore by considering the facts and circumstances of the case, we are of the opinion that we will fix the guarantee commission at the rate of 0.50%. Accordingly, we set aside the order passed by the Assessing Officer and direct the Assessing Officer to adopt at the rate of 0.50% commission on guarantee issued by the Assessee on behalf of its AEs, a subsidiary company. Disallowance of Interest Expenditure - interest expenditure on borrowed funds utilized for the purpose of additional capital in foreign owned subsidiary - HELD THAT:- We find that the similar issue came up for consideration in the Assessment Year 2010 2011, 2011 2012 in [ 2016 (10) TMI 807 - ITAT CHENNAI ] AND [ 2017 (6) TMI 1345 - ITAT CHENNAI] for the Assessment Year 2012 2013, the Hon ble Tribunal has considered for the Assessment Year 2011 2012, 2010 2011 and 2011 2012 by order dated 19.06.2017 and directed the Assessing Officer to verify as to whether the investment made in subsidiary to have controlling interest, or to avoid the dilution of controlling inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not enter into such a contract for the nature of the business of the Assessee - HELD THAT:- So far as the first objection raised by the AO is concerned, we find that the line of the business of the Assessee is charter-hiring of offshore drilling rigs to oil companies like ONGC, Hardy Exploration, etc. The revenue is in the nature of charter-hire income from drilling and production services. All payments under these agreements for provision of the rigs on charter-hire and drilling services are in foreign currency, predominantly in USD. Therefore, the Assessee pleads that it has taken a business decision to protect its interest and had entered into a Forex contract with Banks and subsequently it has claimed loss on the Forex contracts. Second objection raised by the AO, non furnishing of details i.e., invoices, risk analysis statement submitted to the bank etc. e are setting aside the order passed by the Assessing Officer and we direct the Assessing Officer to re-consider the issue details and pass the order thereupon, keeping in view the decision of the Hon ble ITAT of Bangalore Bench in the case of M/s. Essilor India Private Limited Vs. The Deputy Commissioner of Income Tax [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited, Singapore. We find that the reason given by the AO in our opinion is justified for the reason that the AO has given different treatment for the same shares for the year 2014-15 and 2015-16, the AO is disallowed the capital loss claimed by the assessee by following the decision of the Hon ble Jurisdictional High Court in the case of Premier Synthetic Industries Vs. Income-Tax Officer, Ward II (7), Coimbatore [ 2012 (7) TMI 72 - MADRAS HIGH COURT] Even the Hon ble Dispute Resolution Panel [DRP] has taken support from the same decision. In the case of the Premier Synthetic Industries held that the loss cannot be allowed either as a revenue loss or a capital loss. The above decision is not applicable to the facts of the case. As per the note filed by the Assessee in the present case, the Assessee has made investment in M/s. Aban Holdings Private Limited, Singapore for the financial year 2008 2009 dated 27.09.2012, AGM held by M/s. Aban Offshore Private Limited to buyback of shares on 30.10.2013, buyback of shares of the first half on 01.02.2013 and buyback of shares of the second half was on June 2014. The above facts were neither properly examined by the DRP nor by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act, 1956 engaged in the business of providing offshore drilling and production services to companies engaged in exploration, development and production of oil and gas both in domestic and international markets. The company is also engaged in the ownership and operation of wind turbines for generation of wind power in India. 3. The Assessee had filed the return of income for the Assessment Year 2015-16 electronically on 27.11.2015 admitting a total income of ₹ 126,66,09,760/-. The return filed by the Assessee was processed u/s.143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). Subsequently, the case was selected for scrutiny under Computer Aided Scrutiny Selection (CASS) and notice u/s.143(2) of the Act dated 22.09.2016 was served on the Assessee. During the previous year relevant to the assessment year under consideration, the Assessee had entered into an international transaction with Associated Enterprises to the tune of ₹ 1018,47,03,207/- and specified domestic transactions to the tune of ₹ 19,32,98,095/-. The case has been referred to the Transfer Pricing Officer [TPO] and thereafter a notice u/s.142(1) of the Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore does not have an International Transaction. He has also submitted that providing a Corporate Guarantee to an AE is to discharge his own obligation. He alternatively submitted that if the Corporate Guarantee is an International Transaction, the rate charged by the Assessing Officer at 1% is higher and submitted that 0.25% may be charged. Further, he relied upon the decision in the case of Asian Paints Limited Vs. Additional Commissioner of Income-Tax, Large Tax Payer Unit (LTU) reported in [2014] 41 Taxmann.com 71 (Mumbai Trib.). He also relied upon the decision of the Hyderabad Bench of the Tribunal in the case of the Deputy Commissioner of Income-Tax, Circle 16(1), Hyderabad Vs. Lanco Infratech Limited reported in [2017] 81 Taxmann.com 381 (Hyderabad Trib.) 7. On the other hand, the learned Departmental Representative has submitted that the Corporate Guarantee given by the Assessee to an AE is an International Transaction and the rate charged by the Assessing Officer at 1% is reasonable and strongly supported the order passed by the Assessing Officer. 8. We have heard both the sides and considered the arguments and had gone through the orders of the lowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by holding company for the benefit of its AE, a subsidiary company. In view of the above discussion, appeal does not raise any substantial question of law and it is dismissed. 10. From the above decision of the Hon ble Mumbai High Court, it is clear that Corporate Guarantee by an entity on behalf of its AEs a subsidiary company is a international transaction. However, while arriving at a rate, the Assessing Officer has taken comparables from commercial banks to at arrive at mean margin of 1.04% and adopted such rate to determine the ALP of corporate guarantee issued by the Assessee. The Hon ble Mumbai High Court has confirmed the order of the Tribunal wherein the Tribunal estimated the guarantee commission at the rate of 0.50%. We therefore by considering the facts and circumstances of the case, we are of the opinion that we will fix the guarantee commission at the rate of 0.50%. 11. Accordingly, we set aside the order passed by the Assessing Officer and direct the Assessing Officer to adopt at the rate of 0.50% commission on guarantee issued by the Assessee on behalf of its AEs, a subsidiary company. Thus the ground of appeal filed by the Assessee for the Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxable only on the receipt basis. So the assessee cannot claim the interest expenses to the tune of ₹ 159.39 crores as there is no dividend income earned during the year. The interest expenses towards investment in shares are to be capitalized, if the Assessee is not doing share trading business. The Assessing Officer by following the decision of the Hon ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs Trishul Investments Limited [2008] 305 ITR 434 (MAD) has observed that the interest paid for acquisition of shares would partake character of cost of share and therefore the same was rightly capitalized along with the cost of acquisition of shares. 13. The Assessing Officer further noted that in the Assessee s own case for the Assessment Year 2010 2011, the Hon ble DRP has upheld the Assessing Officer s decision on the same issue, since the facts of the case remain the same, the panel agrees with the findings for the Assessment Year 2010 2011 and reaffirms the reasons given by Panel. Considering the above, the objection of the Assessee is not acceptable. The Assessing Officer has further noted that even with the decision of the Hon ble DRP, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011, 2011 2012 and 2012 2013. The issue has been restored back to the file of the Assessing Officer and the Assessing Officer has passed a consequential order dated 30.11.2018 for the Assessment year 2012 2013 and the addition made u/s.36(1)(iii) of the Act has been deleted. 18. He further submitted that the Hon ble ITAT for the Assessment Year 2010 2011 and for the Assessment Year 2011 2012 in M.A.Nos.067 68/Mds/2017, vide order dated 29.11.2017 in Paragraph No.21 has directed the Assessing Officer to comply with the directions of the Hon ble ITAT with regard to the relevance of expenditure u/s.36(1)(iii) of the Act. 19. Subsequently, a consequential order has been passed by the Assessing Officer on 04.01.2018 for the Assessment Years 2010 2011 and 2011 2012, wherein the same issue has been deleted. He further submitted that even for the Assessment Year 2013 2014, DCIT finally has passed an order dated 26.03.2019 by allowing the interest expenditure u/s.36(1)(iii) of the Act. 20. The learned Counsel for the Assessee has further submitted that as per the Assessment Order which shows that the addition made by the Assessing Officer is only because the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Memorandum of Association of the Assessee company and to decide thereupon. The case of the Assessee is that in pursuance to the order passed by the Tribunal, the Assessing Officer deleted the addition for the Assessment Years 2010 2011, 2011 2012 and 2012 2013. We find that in ITA No.450/Mds/2017 forAY 2012-13 vide order dated 19.06.2017, the Tribunal has followed the assessee s own case in ITA Nos. 585/Mds/2015 267/Mds/2016 for AYs 2010-11 2011-12 dated 14.09.2016. For the sake of convenience, the relevant portion of the order extracted by the Tribunal in assessee s own case is extracted as under: After hearing to both the parties, we are of the opinion that the similar issue was considered by the Tribunal in Assessee s own case in I.T.A.Nos.585/Mds/2015 267/Mds/2016 for the Assessment Years 2010-2011 and 2011 2012 dated 14.09.2016 wherein the Tribunal held that:- 31. We find that the reliance placed on by the learned Departmental Representative on the judgement of the Madras High Court in the case of Trishul Investments (supra) is misplaced. The main contention of the learned Departmental Representative is that the interest expenditure on borrowings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, it had specifically provided so under various heads. For example, in computing the income from house property, the assessee is allowed deduction under section 24 of the Act on account of interest paid on the borrowed funds utilised for acquiring the immovable property. Similarly, when the income is to be computed under the head Profits and gains from business or profession , the deduction account of interest on borrowed fund is provided under section 36(1)(iii) the Act, where the business assets are acquired out of borrowed funds. At this stage, it may be pertinent to note that depreciation is also allowable as deduction under section 32 in respect of business assets on the cost of acquisition. In determining the cost of acquisition, the interest component after bringing the asset into existence is not taken into consideration as Explanation 8 to section 43 of the Act. If the interest is to be added to cost of acquisition, then the assessee would be entitled to double deduction once under section 36(1)(iii) and the other under section 32 of Act, which is not permissible in view of the decision of the Supreme Court in the case of Escorts Ltd. v. UOI[1993] 199 ITR 43. 31.5 Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would include all expenditure necessary to bring the assets into existence and put them in working condition. Nowhere in the above observations, the Supreme Court held that the expenditure incurred after the acquisition of asset would be included in the cost of assets. The terminal point is the time when the asset is brought into existence or when the asset is put in a working condition. Therefore, on the basis of the Supreme Court judgment, it cannot be said that expenditure incurred after the asset brought into existence, i.e., after the acquisition of the asset would form part of the actual cost. The Supreme Court laid down the proposition that interest paid on monies borrowed for acquisition of capital asset and to meet expenses connected with its installation etc. and capitalized, has to be added to the cost of asset for the purpose of deprecation. 31.8 Thus in our opinion if the money was borrowed for purchase of shares of subsidiary company for the purpose of acquiring controlling interest and acquisition of such controlling interest was of the business of the assessee and it resulted in promote the business of the assessee as well as helpful to the assessee for having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has noted that it is seen from the finances furnished by the Assessee that it has incurred ₹ 64.00 crores towards professional and consultancy fees. On verification of the details, it is seen that the Assessee has not deducted tax for an amount of ₹ 2,48,46,142/- stating that the TDS is not applicable as expenses incurred outside India (Dubai). For the sake of convenience, the relevant portion is extracted as under: 7. Non-Deduction of TDS for Technical Services rendered: 7.1. It is seen from the financials furnished by the assessee that it has incurred an amount of ₹ 64.00 crores towards Professional and Consultancy Fees. On verification of the details, it is seen that the assessee has not deducted tax for an amount of ₹ 2,48,46,142/- stating that the TDS is not applicable as expenses incurred outside India and paid out India (from Dubai). Sl.No. Name of the Service Provider Amount (in Rs.) 1) Anchor Marine Equipment Co., 530,835 2) Aqualis Offshore Marine Services 318,901 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside India (Dubai) and as such these incomes were not chargeable to tax in the hands of the non-resident service providers. He further submitted that the provisions of Section 195(2) of the Income Tax Act, 1961 applies only when a part of the sum paid to non-residents will be income chargeable in India. Since the payments are to Dubai companies and consultancy services are not chargeable to tax in India. The payment is made outside India by the branch of the Assessee, as the branch did not have any establishment in India. No services are rendered in India and therefore Section 195(2) of the Act is not applicable. Therefore, there is no need to deduct TDS as there is no application of the Section 40(a)(ia) of the Income Tax Act, 1961. 27. The learned Counsel for the Assessee to support his arguments relied upon the decision of the Hon ble Supreme Court of India in the case of M/s. GE India Technology Centre Private Limited Vs Commissioner of Income Tax reported in [2010] 327 ITR 456. He also relied upon the decision of the Hon ble ITAT, Chennai Benches in the case of the Assistant Commissioner of Income Tax Vs. M/s. M.M. Forgings Limited reported in I.T.A. No.2679/Mds/2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e criteria of rendering service in India and the utilization of the service in India to attract tax liability u/s.9(i)(vii) remained untouched and unaffected by the Explanation to Section 9 of the Act and outside India. Therefore, the twin criterion of rendering of services in India and utilization of services in India become evidently necessary condition to deduct tax. However, in respect of the said payments, the rendering of services being purely off shore and outside India, the whatever paid towards the said services does not attract tax liability. 12.1 In view of the above, we are inclined to remit the issue to the file of the Assessing Officer to examine the issue afresh in the light of the above order along with the concerned DTAA and decide thereupon. The issue is partly allowed for statistical purposes. 32. In view of the above, we respectfully following the order of Co-ordinate Bench of the Tribunal, set aside the order passed by the AO and remit the matter back to the AO and direct the AO to follow the above decision of the Co-ordinate Bench of the Tribunal in assessee s own case and pass assessment order thereupon. Thus the ground of appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... away with for fastening the tax liability. However, the criteria of rendering service in India and the utilization of the service in India to attract tax liability u/s.9(i)(vii) remained untouched and unaffected by the Explanation to Section 9 of the Act and outside India. Therefore, the twin criterion of rendering of services in India and utilization of services in India become evidently necessary condition to deduct tax. However, in respect of the said payments, the rendering of services being purely off shore and outside India, the whatever paid towards the said services does not attract tax liability. 12.1 In view of the above, we are inclined to remit the issue to the file of the Assessing Officer to examine the issue afresh in the light of the above order along with the concerned DTAA and decide thereupon. The issue is partly allowed for statistical purposes. 39. In view of the above, we respectfully following the order of Co-ordinate Bench of the Tribunal, we set aside the order passed by the AO and remit the matter back to the AO and direct the AO to follow the above decision of the Co-ordinate Bench of the Tribunal in assessee s own case and pass assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee, the assessee is entitled to get advance credit to the extent tax paid in foreign country. We find that this issue has been considered by the Co ordinate Bench of this Tribunal in assessee s own case in ITA No.450/Mds/2017 for AY 2012-13 vide order dated 19.06.2017, the issue is remitted back to the file of AO. For the sake of convenience, the relevant portion of the order is extracted as under: 21. After hearing both the parties, we are of the opinion that the similar issue was considered by the Tribunal in assesse s own case in ITA Nos.585/Mds/2015 267/Mds/2016 for the assessment years 2010-11 and 2011-12 dated 14.9.2016 wherein Tribunal held that:- 23. We have heard both the parties and perused the material on record. This issue came for consideration in assessee s own case in I.T.A.No.1159/Mds/2012 challenging the action of the CIT(A) in restricting the assessee s claim of relief u/s 90 of the Act of _ 224,67,411/- to the extent of tax payable in India on net income of _ 516,93,732/- i.e difference between interest earned from M/s AHPL and interest paid on borrowings made for advancing the loans to M/s AHPL. The Tribunal while adjudicating the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. We therefore respectfully following the order of the Co-ordinate Bench of this Tribunal, we set aside the order passed by the AO and remit the matter back to the file of AO. We direct the AO to follow the order passed by the Tribunal for AY 2012-13 and pass order thereupon. Thus the ground of appeal filed by the assessee is allowed for statistical purposes. 44. The seventh ground of appeal relating to disallowance of loss on forward contracts: Facts are in brief that in the Assessment Order, the Assessing Officer has noted that as per the Note.23 of the Financials (Other Expenses), it is reported that an amount of ₹ 5.53 crores in the Profit and Loss account is at loss in respect of the cancellation of forward contracts as on 31st March, 2015. The Assessing Officer has called for the relevant details. 45. After considering the relevant details filed by the Assessee, the Assessing Officer has noted the export of goods and services to foreign countries and that are exposed to the vagaries of fluctuations in the Forex market. In order to protect against these vagaries of Forex transaction, exporters are allowed to hedge their risk within the regulatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contracts were entered. Accordingly, he has disallowed the amount of ₹ 5.53 crores by treating it as speculative loss. The Assessee has raised objections on the draft assessment order passed by the Assessing Officer before the DRP and the DRP has confirmed the draft assessment order and directed the Assessing Officer to complete the assessment. 48. Before us, the learned Counsel for the Assessee has submitted that the company s main line business is charter-hiring of offshore drilling rigs to oil companies like ONGC, Hardy Exploration, etc. The revenue is in the nature of charter-hire income from drilling and production services. All payments under these agreements are made for provision of the rigs on charter-hire and drilling services in foreign currency, predominantly in USD. The nature of company s business also requires substantial imports for equipment and stores and spares for the maintenance and upkeep of the offshore rigs in order to ensure uninterrupted drilling operations. 49. He also submitted that when the entire business of the Assessee runs the risk of foreign exchange fluctuation and hence such losses can be nothing but business losses inextricably li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or want of particulars from the assessee. In view of the above, we are setting aside the order passed by the A.O and direct the A.O to re-consider the issue afresh keeping in view of the decision of the Hon'ble ITAT of Bangalore Bench in the case of M/s. Essilor India Pvt. Ltd. Vs. The DCIT, supra. 57. In so far as the second objection raised by the AO, non furnishing of details i.e, risk analysis statement submitted to the banks. Therefore, in view of the above, we are setting aside the order passed by the Assessing Officer and we direct the Assessing Officer to re-consider the issue details and pass the order thereupon, keeping in view the decision of the Hon ble ITAT of Bangalore Bench in the case of M/s. Essilor India Private Limited Vs. The Deputy Commissioner of Income Tax (supra). Thus the ground of appeal filed by the Assessee is allowed for statistical purposes. 58. The eight ground of appeal relating to Disallowance of expenses relates to earning exempt income u/s.14A r.w.R 8D: Facts are in brief that in the Assessment Order, the Assessing Officer has noted that an amount of ₹ 13,82,34,191/- as dividend from mutual funds / shares during the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Section 115JB of the Act another provision with fiction cannot be superimposed and the question of increasing the Book Profit due to disallowance u/s.14A of the Act will not arise due to the fact that any notional adjustment in the book profit is not permissible. To support his argument he relied on the decision of the Delhi Special Bench in the case of Vireet Investments, 82 Taxmann.com 415 62. The learned Departmental Representative supported the order of the authorities below. 63. We have heard both the sides and perused the records and had gone through the orders of the authorities below. 64. The case of the Assessee is that he has not incurred any expenses for the earnings of the dividend income. However, the Assessee has not been able to establish before the Assessing Officer because the borrowed funds are not utilized for the purpose of investment. Therefore, the Assessing Officer has invoked Section 14A r.w.R 8D of the Income Tax Act, 1961. He has made a disallowance of ₹ 5,35,925/- which is 0.5% of the average investments. 65. On appeal, the Dispute Resolution Panel has modified the order passed by the Assessing Officer and also made one more addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FY: 2008-09 - 582 14,887,655 Index cost of acquisition FY : 2014 15 1024 Loss on sale of investments to be carried forward (82,87,6565) INR Conversion @ TT buying SBI Card rate as on May 21st @ 58,75 (₹ 48,68,99,749) / ..(A) Sale consideration of Investments sold on various dates of July in F.Y. 2014 2015 1,02,56,410 Equity Shares @ USD 0.78 each 8,00,000 Less : Cost of acquisition Cost of inflation index 1,02,56410 shares @ USD 1.00 FY: 2008-09 - 582 18,045,643 Index cost of acquisition FY : 2014 15 1024 Loss on sale of investments to be carried forward (10,045,643) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 67,56,757 50,00,000 14.07.2014 Equity Investment in Wholly owned subsidiary 67,56,757 50,00,000 Total 337,83,783 250,00,000 69. From the above, the Assessing Officer has noted that the Assessee has sold tranche of shares in the wholly owned subsidiary M/s. Aban Holdings Private Limited from 13.06.2014 to 01.07.2014 for a sum of USD 146,00,000 incurring huge long term capital loss, only thirteen days later a sum of USD 250,00,000 was invested in the same shares by the Assessee. Since this is against a common prudence, the Assessee was asked to explain the transaction along with copies of buyback offer, copies of valuation reports, reason for sale and subsequent purchase of shares of the wholly owned subsidiary supported by minutes of meeting and copies of valid documentary evidences along with all relevant details. The Assessee has submitted as under: Our wholly owned subsidiary had come out with an offer for buyback of its equity shares in October 2013. Company had planned for redeeming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined as per Rule 11 UA, our company has rightly claimed the long term capital loss on sale of such shares and same may kindly be allowed to carry forward to future years. We would like to submit that the part of the above transaction had taken place in FY 2013-14 relevant to AY-2014-15 and a total capital loss on sale of shares of MIs Aban Holding Private Limited was arrived at 112,66,71,005/-. During the course of scrutiny proceedings, queries was raised regarding the Long Term Capital Loss claimed by our company and after our reply, the same was ace Private by the Assessing officer for A Y2014-15. Since the loss in current year in on the same transaction, we request you to kindly accept the Long Term Capital loss claimed by our company. Herein, it is once again submitted before you kind office that the during the FY 2013-1 4, the assessee company was going through liquidity crises and therefore our company requested to buy back AHPL shares, AHPL agreed to buy back its shares from our company (A ban Offshore Limited). The decision to buy back of shares was finalized during FY2013-14 when our company was facing liquidity crises. However, the buyback transactions took pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss claimed by the Assessee is disallowed. 75. The Assessing Officer also relied upon the decision of the Madras High Court in the case of M/s. Premier Synthetic Industries Vs. Income Tax Officer, Ward II (7), Coimbatore [2012] 22 Taxmann.com 333 (Mad.). Keeping in view of the direction given by the DRP. 76. The ld. Counsel for the assessee has argued that the assessee has taken a business decision of buy and sale the shares therefore, the AO cannot step into the shows of the assessee. Further he relied on the decision of Hon ble Supreme Court in the case of S.A Builders Vs. CIT 288 ITR 01 (SC). He further submitted that the capital loss on account of sale of shares was not adjusted against any capital gain even till date. Accordingly, no tax benefit was levied therefore, obtained by the assessee company after the capital loss was booked by it. To support his argument, he relied on the decision of the Hon ble Delhi High Court in the case of CIT vs. Gillette Diversified Operations (P.) Ltd. [2010] 324 ITR 226 (Del). He further submitted that part of the transaction had taken place at for the financial year 2013-14 relevant to the AY 2014-15 a total capital loss on sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer for the Assessment Year 2014 2015, in the scrutiny proceedings allowed the capital loss of the Assessee. In the year under consideration, the Assessing Officer says that the Assessment Year 2014 2015 is different from the Assessment Year 2015 2016. The Board has taken a decision with regard to the buyback of the shares. One transaction has already been completed for the Assessment Year 2014 2015 and the same is allowed by the Assessing Officer. The remaining part of the transaction is completed during the subsequent year and the Assessing Officer has doubted the same on the ground that the Minutes of the Meeting has not been placed before the Assessing Officer and also the Assessee has sold the same shares to M/s. Aban Holdings Private Limited, Singapore. We find that the reason given by the AO in our opinion is justified for the reason that the AO has given different treatment for the same shares for the year 2014-15 and 2015-16, the AO is disallowed the capital loss claimed by the assessee by following the decision of the Hon ble Jurisdictional High Court in the case of Premier Synthetic Industries Vs. Income-Tax Officer, Ward II (7), Coimbatore (supra). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Services Limited is a company founded in the year 1995 is providing financial advice in various areas and is listed in the major recognized stock exchanges of India including Bombay Stock Exchange. The company is located in Mumbai and its PAN is AAACE 0994L. During the year under consideration, M/s. Emkay Global Financial Services Limited ha provided our company consultancy services in respect of financial restructuring of our company and accordingly has raised an invoice of ₹ 1,89,00,000/- towards such services and also charged service tax @ 12.36% of ₹ 23,36,040/-. Thus, the payment was made after deducting the applicable TDS. It is not out of place to submit here that the above payments are reflected in the Form 26AS of M/s. Emkay Global Financial Services Limited and the same is offered by them to Income Tax. Further, M/s. Emkay Global Financial Limited is not a related party to M/s. Aban Offshore Limited. Therefore, it is submitted that the payments made to M/s. Emkay Global Financial Services Limited are towards the business requirements of our company which helped us in restructuring the financial structure of the company. Therefore, the expenditure incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same cannot be disallowed. He further submitted that the Assessee has deducted service tax and also the Tax Deducted at Source [TDS] in respect of the payment made to Emkay Global Financial Limited. He also submitted that the Assessee has taken a decision in respect of his business and a Consultant is engaged for which he had paid consultancy charges for the services and therefore the Assessing Officer cannot sit upon the business decision taken by the Assessee and disallow the expenditure which is incorrect. To support his arguments, he relied upon the decision in the case of M/s. S.A. Builders Limited Vs. Commissioner of Income Tax (Appeals) reported in 288 ITR 1/158 Taxmann 74 (SC); Assistant Commissioner of Income Tax Vs. Durgapur Tea Company [2003] 131 Taxmann 39; Principal Commissioner of Income Tax Vs. Basti Sugar Mills Company Limited reported in [2018] 98 Taxmann.com 401 (Delhi). He also relied upon the decisioni in the case of Commissioner of Income Tax Vs. South India Sugars Limited reported in [2005] 275 ITR 491 (Mad.) 89. We have heard both the sides and perused all the records and had gone through the orders of the lower authorities. 90. The case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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