TaxTMI 
TaxTMI 
2016 (10) TMI 1403
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.... if the interest was charged on the wholly owned subsidiary company in such a situation, ultimately it has to be written off since the assessee could not recover the interest from subsidiary company. Referring to the order of this Tribunal for the assessment year 2010-11 in the assessee's own case, the Ld.counsel submitted that on identical situation, this Tribunal remitted back the matter to the file of the Assessing Officer. Therefore, for the year under consideration also, the issue of disallowance of interest may be remitted back to the file of the Assessing Officer. 4. On the contrary, Dr. Milind Madhukar Bhusari, the Ld. Departmental Representative, submitted that interest shall be charged on the amount advanced by the assessee to its subsidiary company in UK. Therefore, the Assessing Officer by applying LIBOR rate of interest, made the addition. The Ld. D.R. further submitted that by advancing the borrowed funds to a non-resident company without charging any interest, the assessee is apparently shifting the taxable income to a foreign jurisdiction. When the assessee claims the interest expenditure in India, while computing the taxable income, the income of the assessee ....
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....bmitted that for the assessment year 2010-11, the DRP by following the order of this Tribunal in Redington (India) Limited (supra), accepted the claim of the assessee. During the year under consideration, the DRP found that the facts are totally different. During the year under consideration, the assessee extended corporate guarantee on behalf of AE CPFL and the actual amount outstanding as on 31.03.2011 was Rs. 61,86,647/- as against the balance of Rs. 58,55,773/- as on 01.04.2010. The assessee has given fresh bank guarantee of Rs. 79,65,761/- in January, 2011 and the actual amount outstanding as on 31.03.2011 was Rs. 82,63,097/-. The assessee actually paid commission to the bank for availing this facility. Therefore, it is not a corporate guarantee. Therefore, the DRP directed the TPO to verify the actual commission paid by the assessee work out the arm's length price in respect of the bank guarantee. 9. We have considered the rival submissions on either side and perused the relevant material available on record. The assessee claims that the issue was covered in its favour by the decision of this Tribunal in Redington (India) Limited (supra). However, the Revenue contends th....
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....capital and reserves and surplus was available to the extent of Rs. 55,494.96 lakhs as on 31.03.2011 and the investment was only to the extent of Rs. 14,236.74 lakhs. Therefore, it has to be presumed that the investment was made from own capital. It is not known whether the paid up capital, reserves and surplus were available with the assessee in liquid cash. The assessee has invested in plant and machinery, therefore, the liquid cash may be available with the assessee. Therefore, the assessee cannot claim in such a situation that the investment was made from the available funds with the assessee. Therefore, it has to be ascertained whether the assessee has any liquid cash on hand on the date of investment. Moreover, the caim of subsidiary company also needs to be verified with reference to shareholding pattern of so-called subsidiary company. Since the shareholding patter is not on record, this Tribunal is of the considered opinion that the matter needs to be reconsidered. Accordingly, the orders of the lower authorities are set aside and the issue of disallowance under Section 14A of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-exa....
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....erest of the Revenue. Accordingly, the orders of the lower authorities are set aside and the issue of disallowance of interest on the free loans and advances to subsidiary company is remitted back to the file of the Assessing Officer. The Assessing Officer shall reexamine the issue in the light of the material that may be filed by the assessee and thereafter decide the same in accordance with law after giving a reasonable opportunity to the assessee. 17. The next issue arises for consideration is disallowance of claim of software expenses. 18. Sh. Vikram Vijayaraghavan, the Ld.counsel for the assessee, submitted that the DRP has disallowed the software expenses. However, this Tribunal in the assessee's own case for assessment year 2010-11 in I.T.A. No.688/Mds/2015, remanded back the matter to the file of the Assessing Officer for reconsideration. 19. We have heard Dr. Milind Madhukar Bhusari, the Ld. Departmental Representative also. As rightly submitted by the Ld.counsel for the assessee, the Tribunal remitted back the matter to the file of the Assessing Officer by directing the DRP to verify the nature of expenditure and thereafter decide the issue. This Tribunal found tha....
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....mined irrespective of the fact whether the circular of the CBDT is withdrawn or not. Therefore, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer. Accordingly, the orders of both the authorities below are set aside and the issue of disallowance made by the Assessing Officer under Section 40(a)(ia) of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the issue afresh in the light of the provisions of Income-tax Act after considering the withdrawal of circular issued by CBDT and the judgment of Madras High Court in Faizan shoes Pvt. Ltd. (supra) and thereafter decide the issue in accordance with law after giving a reasonable opportunity to the assessee. 25. The next ground of the appeal is additional depreciation under Section 32(1)(iia) of the Act. 26. The issue of additional depreciation was examined by this Tribunal in the assessee's own case. This Tribunal found that the assessee is entitled to additional depreciation in the subsequent year since the machinery was put to use for 180 days in the earlier assessment year. The order of this Tribunal in the assessee'....