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Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
against the order of Learned Commissioner of Income Tax (Appeals)-34 & 03, New Delhi [Ld. CIT(A)”, for short], dated 19/08/2019, 07/05/2019 for Assessment Years 2010-11& 2015- 16 respectively. Grounds taken in these appeals are as under:
1. That the Commissioner of Income Tax (Appeals) ('CIT(A)’) erred on facts and in law in confirming disallowance of Rs. 58,807,548 made by learned Assessing Officer ‘AO’ under section 14Aofthe Income Tax Act, 1961 (‘the Act’).
2. That on the facts and circumstances of the case and in law, the Id. CIT(A) erred in not holding that in terms of the law laid down by the Hon’ble Delhi High Court in the cases of Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Del) and CIT vs. Holcim India P. Ltd. (2014) 272 CTR 282 (Del), no disallowance under section 14A of the Act was required to be made, in respect of investment from which no exempt dividend income was earned during the relevant
year.
3. That on the facts and circumstances of the case and in law, the Id. CIT(A) erred on the law by ignoring the revised grounds of appeal filed during the course of appellate proceedings.
4. Without prejudice, the CIT(A) erred on facts and in law in not appreciating that the disallowance made under section 14A of the Act cannot exceed exempt income of Rs.159,053 earned during the year as per the principle laid down by Hon’ble Delhi High Court in the case of McDonalds I Pvt. Ltd v Pr. CIT-6 (TS- 680-HC-2018-DEL).
5. Without prejudice that the CIT(A) erred on facts and in law in sustaining disallowance of Rs.64,547,177 (net disallowance of Rs. 58,807,548) made under section 14A of the Act by not appreciating the fact that at best the disallowance was required to be restricted to Rs.5,739,629 as offered by the Appellant being expenditure related to earning of exempt dividend income as computed by the appellant after excluding strategic investments wherefrom no dividend income was earned during the year, in the course of appellate proceedings.
6. That the Commissioner of Income Tax (Appeals) did not allow exemption ii/s 10A of Rs. 41,011,425 claimed by the Appellant on the grounds that no details of such exemption and Auditor’s Certificate were furnished with respect to such exemption however the Id. CIT(A) has erred on the facts and in law that, - the details of such exemption and certificate issued by a Chartered Accountant in Form 56F were duly furnished by the Appellant vide its submission dated Oct 30, 2014.
- Without prejudice, no opportunity was given to the Appellant to furnish the same during the final course of appellate proceedings.
(ASSESSMENT YEAR 2015-16)
1. That the Commissioner of Income Tax (Appeals) ('CIT(A)’) has erred on facts and in law in confirming disallowance of Rs. 20,692,899 made on account of foreign exchange fluctuation losses on loans given to wholly owned subsidiaries.
That the learned CIT(A) has erred on facts and in law without appreciation the fact that loans were given for working capital requirements of the subsidiaries and the Appellant earns substantial operating revenue from such subsidiaries.
3. That thelearned CIT(A) has erred on facts and in law that the Appellant had duly offered profit on restatement of loans to the subsidiaries to tax in preceding years and losses on restatement such loans in current year are incidental to business and allowable under tax laws.
That thelearned CIT (A) has erred on the facts and in law that such loans were not advance for any fixed capital and losses on account of exchange fluctuation on loans needs to be transferred to the profit and loss account as per accounting principles and taxation laws.”
(ASSESSMENT YEAR 2010-11)
On the facts and circumstances of the case Ld. CIT(A) erred in deleting the addition of Rs. 5,93,30,747/- u/s 14A of the Income Tax Act, 1961.
2. On the facts and circumstances of the case Ld. CIT(A) erred in deleting the addition of Rs.50,00,000/- on account of IT Service Charges.
On the facts and circumstances of the case, the decision of the Ld.CIT(A) in allowing the set off of brought forward losses of M/s Religare Technova Global Solution Limited of the amount of Rs. 17,50,37,021/- u/s 72A of the Income tax Act, 1961 is not acceptable because Information Service Division of M/s Religare Technova Global Solution Limited was transferred via slump sale and not by the amalgamation. The entire company, M/s Religare Technova Global Solution Limited was not transferred by amalgamation. Hence, brought forward losses should not be allowed to set off (B) In the course of appellate proceedings in Income Tax Appellate Tribunal (“ITAT” for short), letter dated 18/02/2022 has been received from Mr. Pardeep Kumar Lakhani, Insolvency Professional. The relevant portion of the aforesaid letter is reproduced as under:-
“This is to inform you that the Assessee Company - Dion Global Solutions Ltd. is undergoing Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code, 2016 (IBC), vide the order dated 18.08.2020 of Hon’ble National Company Law Tribunal (NCLT) New Delhi Bench (Copy enclosed. The undersigned was appointed as the Interim Resolution Professions vie the same order and was subsequently confirmed as Resolution Professional vide order dated 07/10/2020 of Hon’ble NCLT, New Delhi (Copy enclosed)
It is further informed that pursuant to section 14 of the IBC, the Hon’ble NCLT vide its Order dated 18.08.2020 has also declared moratorium prohibiting the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority.
The provisions of Section 14 of the IBC are reproduced hereunder for your reference:
Section-14: Moratorium