PR. COMMISSIONER OF INCOME TAX -7, DELHI vs. P C JEWELLERS LTD.

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ITA - 580 / 2023HC Delhi13 October 20233 pages
For Petitioner: PUNEET RAI
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What did the High Court hold?

The Delhi High Court noted that one issue (TDS on credit card commission) was covered by a previous judgment in favour of the assessee. Another set of issues (education cess) was covered in favour of the revenue due to a retrospective amendment.

What were the facts?

The Revenue appealed against an ITAT order concerning AY 2013-14 and 2014-15. The appeal raised several questions of law regarding TDS on credit card commission, additional grounds for claiming expenses, share issue expenses, IPO expenditure for book profit, and education cess deduction.

What were the issues?

The key issues involved the applicability of a CBDT notification for TDS on credit card commission, the allowance of additional grounds for expenses, and the deductibility of share issue expenses and education cess.

Which sections of the Income-tax Act were involved?

Section 40(a)(ii),Section 37(1),Section 115JB

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$~34 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 580/2023 & CM APPL. 53515/2023

PR. COMMISSIONER OF INCOME TAX -7, DELHI..... Appellant Through: Mr Puneet Rai, Sr Standing Counsel with Mr Nikhil Jain, Adv.

versus

P C JEWELLERS LTD.

..... Respondent

Through: Ms Aabgina Chishti, Adv.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA

O R D E R %

13.10.2023 [Physical Hearing/Hybrid Hearing (as per request)] 1. This appeal concerns Assessment Year (AY) 2013-14. 2. Via the instant appeal, the appellant/revenue seeks to assail the order dated 07.12.2021 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”]. 3. To be noted, the aforementioned order is also common to the respondent’s/assessee’s case concerning AY 2014-15. 4. Mr Puneet Rai on behalf of the appellant/revenue has proposed the following questions of law for consideration by this court: “(A) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal [ “ Tribunal”] was right in applying the CBDT Notification No.56/2012 dated 31.12.2012 which came in force with effect from 01.01.2013 and deleted the addition made by the AO on account of non- deduction of TDS qua expenditure amounting to Rs.1,82,53,095/-

ITA 580/2023

page 1 of 3 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:01:30

incurred on account of Credit Card and Debit Card Commission? (B) Whether on the facts and in the circumstances of the case, the Tribunal was right in accepting the additional ground for claiming expenses through cross objection although the respondent/assessee company had neither claimed the same in Income Tax Return nor raised the issue with the Assessing Officer or Commissioner of Income Tax (Appeals)? (C) Whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the share issue expenses as revenue expenses u/s 37(1) of the Act ignoring the fact that the said expenses were in the capital expenditure? (E) Whether on the facts and in the circumstances of the case, the Tribunal erred in allowing the expenditure on IPO while computing Book Profit u/s 115JB of the Act? (F) Whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the deduction concerning Education Cess paid under section 37 of the Act ? (G) Whether on the facts and in the circumstances of the case, the Tribunal erred in allowing deduction qua education Cess even while the CBDT had issued a clarification in the 2022 Budget and accordingly proposed an amendment with retrospective effect i.e., AY 2005-06?”

5.

Insofar as the proposed question (A) is concerned, it is covered against the appellant/revenue and in favour of the respondent/assessee by virtue of the judgment rendered by the coordinate bench of this court in CIT v. JDS Apparels Pvt. Ltd., (2015) 370 ITR 454. 6. We may also note that the proposed F and G is evidently covered in favour of the appellant/revenue by virtue of a retrospective amendment made in Finance Act, 2022 to Section 40(a)(ii) of the Income Tax Act, 1961 [in short, “Act”]. The amendment has been brought into force w.e.f. 01.04.2005. 7. This aspect has been noticed in the judgment rendered by the Supreme Court in JCIT v. Chambal Fertilizers and Chemicals Ltd., (2023) 450 ITR 164 (SC). ITA 580/2023

page 2 of 3 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:01:30

8.

Insofar as the other aspects are concerned, issue notice to the respondent/assessee. 8.1. Ms Aabgina Chishti accepts notice on behalf of the respondent/assessee. 9. List the matter on 15.02.2024.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

OCTOBER 13, 2023

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ITA 580/2023

page 3 of 3

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:01:30

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