DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), HYDERABAD vs. SHRIRAM CHITS PRIVATE LIMITED, HYDERABAD

We come to the assessee's appeal ITA No.718/Hyd/2019 raising its sole substantive grievance that both the lower authorities' have erred in law and on facts in upholding taxability of its foreman dividend to the tune of Rs.15,28,60,606 in the course of assessment dt.14.12.2018 and upheld in the CIT(A)’s order as under :

Suffice to say, it has come on record that this tribunal has already settled the very issue against the assessee and the Revenue’s favour right from Assessment Years 1999- 2000 to 2014-15. No distinction on facts or law has been pin pointed at the assessee's behest. We thus adopt judicial consistency to affirm the impugned addition pertaining to the taxability of foreman dividend amounting to Rs.15,28,60,606. The assessee's appeal 718/Hyd/2019 raising the instant sole issue fails therefore.

The learned CIT (Appeals) erred in allowing the claim of the assessee on royalty payment amounting to Rs.4,04,56,377/- ignoring the fact that the parent company is not rendering any services to assessee-company.”

We advert to the Revenue’s first and foremost grievance pertaining to disallowance of bad debt qua running and terminated chits in alleged violation u/s.36(2) of the Income Tax Act (in short 'the Act'). We are taken to CIT(A)’s detailed discussion deleting the impugned bad debt disallowance as under :

Both the learned representatives are fair enough in informing us that this tribunal’s orders have already decided the very issue in assessee's favour qua its bad debt claim pertaining to running and terminated cheques. We do not notice any distinction on facts or law qua the same. It rather emerges that the CIT(A) has granted relief to the assessee to the extent of 95% only(supra) than that its entirety. We therefore follow the above detailed reasoning mutatis mutandis to affirm the CIT(A) findings on the issue of running and terminated cheques as well.

The factual position is no different regarding royalty issue as well reading as under :

Learned departmental representative’s only case is that the assessee's parent company has not rendered any service so as to be eligible for claiming the impugned deduction u/s.37 of the Act. We are informed that this tribunal’s earlier co-ordinate bench (supra) has already settled the issue in assessee's favour and against the department on the issue under consideration. More particularly that of commercial expediency in incurring a particular head of expenditure. We therefore see no merit in Revenue’s instant grounds. The same are rejected

Both these assessee's and Revenue’s cross appeals 718 & 975/Hyd/2019 are dismissed in above terms. A copy of this common order be placed in the respective files.