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TMI Blog2023 (11) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... For convenience, the relevant parts of the order dated 23.08.2023 are set forth hereafter: "1. This appeal concerns Assessment Year (AY) 2010-11. 2. Via this appeal, the appellant/revenue has assailed the order dated 14.05.2019 passed by Income Tax Appellate Tribunal [in short "Tribunal"]. 3. The appellant/revenue has proposed the following questions of law: "(i) Whether, on the facts and circumstances of the case, the ITAT was correct in law in restricting the addition on disallowance u/s 14A of the Income Tax Act read with Rule 8D of the Income Tax Rules, to Rs. 78,037/- as against the addition made by the AO of Rs. 7,94,53,077/-, by ignoring the fact that under Rule 8D the disallowance is not to be restricted to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner was correct, the addition in issue, by way of deletion of disallowance could not have been made because the exempt income earned by the respondent/assessee was only Rs. 78,037/-. 10. This aspect is covered by the following judgments rendered by various Courts: (a) Pr. Commissioner of Income Tax~6, New Delhi vs. Mcdonald's India Pvt. Ltd, 2018:DHC:6836-DB. (b) Cheminvest Ltd. vs. Commissioner of Income-tax IV (2015) 378 ITR33 (Delhi). (c) Commissioner of Income-tax, Central-I, Chennai vs. Chettinad Logistics (P) Ltd. (2017) taxman 55 (Madras). 11. We may note that a Special Leave Petition was filed, insofar as the decision rendered by the Madras High Court in Commissioner of Income-tax, Central-1, Chennai vs. Chetti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed in the relevant year as it is the transition phase of sale of debts and that is why the assessee has been appointed as debt recover [sic...recovery] agent and the hypothecated assets against which the loan given by the assessee were in the process of transfer to STFCL. Further, such sales of approximately 24,000 debts take time to get transferred in totality. Further, such sale of actionable claim is out of the purview of the Sales [sic...The Sale] of Goods Act. Due to indemnity and condition to recover the enhance [sic...enhanced] loss over and above 20% of debts from the assessee till claim made by STFCL. We therefore, [sic...are] of the considered view that the sale of debts has not materialized in totality in the relevant year and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finding of fact returned by the Tribunal, albeit, after a detailed analysis of the agreement executed between the respondent/assessee and Shriram, which is encapsulated in paragraph 38 of the impugned order: "38. After considering the facts in totality, in the light of the sale agreement and various relevant clauses discussed hereinabove, we are of the considered opinion that transaction has taken place during the year under consideration and loss has crystallized during the year under consideration and the assessee is entitled for claim of loss of Rs. 103.87 crores in the year itself. We, accordingly direct the Assessing Officer to delete the addition of Rs. 104.87 [sic...103.87] crores." [Emphasis is ours] 8. However, for the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not arise from the orders passed by the statutory authorities. 13. Insofar as to whether the liability had, in fact, crystallized in the period in issue, the Tribunal, after examining the assignment agreement executed between the respondent/assessee and Shriram, has returned a categorical finding of fact that the liability indeed arose in the period in issue, as indicated in paragraph 38 of the Tribunal's order extracted hereinabove. 14. The appellant/assessee [Sic, should be 'Revenue'] has not proposed any question of law to the effect that this finding is perverse. Therefore, on this score as well, we are not inclined to entertain the appeal, and the appeal is, accordingly, closed. 15. Parties will act based on the digitally s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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