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These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.

06-06-2019, Pidilite Industries, Section 194J, 80IA(5), Tribunal Mumbai

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3 months 1 week ago #9674 by amit
Section - 194J, 80IA(5), 14A(2), 28(iv), 41(1)
Order Date - 06-06-2019
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - DCIT
Respondent - Pidilite Industries Ltd.
Justice - MAHAVIR SINGH, JM & MANOJ KUMAR AGGARWAL, AM
Citation - 619Taxpundit90
Appeal No. - I.T.A. No.7352/Mum/2017
Asstt. Year - 2010-11

Order

PER : Manoj Kumar Aggarwal

1. Aforesaid appeals, both by revenue, for Assessment Year [AY] 2010-11 contest the order of Ld. Commissioner of Income-Tax (Appeals)-8, Mumbai, [CIT(A)], Appeal No. CIT(A)-8/IT-156/14-15 dated 04/09/2017 and rectification order passed u/s 154 against the same on 30/10/2017. The revenue has filed two appeals since Ground No. 7 of the assessee’s appeal, before first appellate authority, in order dated 04/09/2017 was decided against the assessee. However, the same has subsequently been allowed by first appellate authority by rectifying its earlier order u/s 154 on 30/10/2017. ITA No.7351/Mum/2017 is against order dated 04/09/2017 whereas ITA No.7352/Mum/2017 is against rectification order u/s 154 dated 30/10/2017. The combined effective grounds raised in both the appeals reads as under: -

ITA No. 7351/Mum/2017

1. Whether on the facts and circumstances of the case and in law the Ld CIT(A) has erred in deleting the disallowance of Rs. 45,85,68,733/-made u/s 40(a)(ia) of the I T Act 1961 in respect of the local purchases without appreciating that the disallowance made by the AO was after analyzing the facts of the case and after concluding that the purchases were in nature of job work liable to the provision of tax deducted at source u/s 194C of the Act.

2. Whether on the facts and circumstances of the case and in law the Ld CIT(A) has erred in deleting the disallowance of Rs. 44,65,86,415/-made u/s 40(a)(ia) of the I T Act 1961 in respect of the import purchases without appreciating that the disallowance made by the AO was after analyz ng the facts of the case and after concluding that the purchases were in nature of job work liable to the provision of tax deducted at source u/s 194C of the Act

3. Whether on the facts and circumstances of the case and in law the Ld CIT(A) has erred in deleting the disallowance of Rs. 2,88,52,671/-made u/s 40(a)(ia) of the I T Act 1961 in respect of the freight payment on raw-materials without appreciating that the disallowance made by the AO was after analyzing the facts of the case and on the AO had concluded that the freight payment on raw-materials were in nature of job work liable to the provision of tax deducted at source - u/s 194C of the Act.

The CIT(A) has failed to appreciate that for the purpose of application of provisions of tax deducted at source there is no condition that the contract has to be a written and that the contract could be oral or implied contract.

4. Whether on the facts and circumstances of the case and in law the Ld CIT(A) has erred in deleting the disallowance of Rs. 1,24,96,386/- made u/s 40(a)(ia) of the I T Act 1961 in respect of payment of professional fees to foreign parties without appreciating that the "disallowance made by the AO was after analyzing the facts of the case and on the AO had concluded that the payment of professional fees to foreign parties were paid for services utilized by the Indian Company in its business carried on by it in India irrespective of place where the services were rendered, and such the services were within ambit of provisions of section 194J of the I T Act 1961.

5. Whether on the facts and circumstances of the case and in law the Ld CIT(A) has erred in deleting the disallowance of Rs. 4,30,371/- made u/s 14A of the I T Act 1961 to without appreciating that the disallowance made by the AO was after analyzing the accounts of the assessee and was based on the Rules which were laid specifically to compute the disallowance u/s 14A of the Act?

6. Whether on the facts and circumstances of the case and in law the Ld CIT(A) has erred in deleting the disallowance of Rs. 4,30,371/- made u/s 14A r.w.Rule 8D [over and above the suo-moto disallowance of Rs. 22,60,000/-] without appreciating that the disallowance u/s 14A of the I. T. Act, 1961 has to be computed as per Rule 8D of I. T. Rules, 1961 as held in the order of the Hon'ble High Court in the case of M/s Godrej & Boyce Manufacturing Co. Ltd?

7. Whether on the facts and in the circumstances of the case and in law the Ld CIT(A) was justified in deleting the addition of Rs.2,13,09,500/- made by the A.O. u/s. 28(iv) of the I.T. Act on account of discount received on FCCB buy back without appreciating that the said discount received was taxable as revenue receipts u/s 28(iv) of the Act?

8. Whether on the facts and in the circumstances of the case and in law the Ld CIT(A) was justified in holding that the deduction u/s. 80IB is admissible to the assessee without appreciating the fact that the assessee does not fulfill the condition laid down u/s. 80IB(2)(iv) of the Income Tax Act 1961?

9. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) has in erred in deleting the disallowance deduction claimed of Rs. 81,96,759/- u/s. 80IA of the Act without considering the fact that the assessee did not set-off unabsorbed depreciation before making the claim in violation of the provision of section 80IA(5) of the Act when the law is very clear that brought forward unabsorbed depreciation has to be first adjusted against the profit of the undertaking and only such profit of the undertaking which are in excess of such unabsorbed depreciation can be allowed as deduction u/s 80IA of the Act .

10. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) is perverse in applying the decision of the Hon'ble Bombay High Court in assessee's own case for AY 2006-07 and 2007-08 when the Hon'ble Court's order was in the context of applicability of CBDT Circular No.1 of 2016 whereas the issue in the impugned matter is different and not covered by CBDT Circular No. 1 of 2016?”

Ground Nos. 1 to 8 are subject matter of ITA No.7351/Mum/2017 whereas ground Nos. 9 to 10 are subject matter of ITA No. 7352/Mum/2017.

2. The Ld. Authorized Representative for assessee [AR], Shri Yogesh Thar, at the outset, placed on record issue-wise chart to submit that most of the issues under appeal are squarely covered by the judgment of this Tribunal / Hon’ble Bombay High Court for other years in assessee’s own case. The decisions of Hon’ble Bombay High Court / Tribunal could be tabulated in the following manner: -

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