STEEL AUTHORITY OF INDIA LTD. vs. DCIT

PDF · subscribers
ITA/55/2018HC DelhiDLHC01002805201817 January 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration. Regarding the loan waiver, the Court noted that for previous years, it had ruled against the same assessee in Steel Authority of India vs. Commissioner of Income Tax, (2012) IV AD (Delhi) 262, and for the same reason, no question of law arose. Concerning the freight expenditure of Rs. 2,00,000/-, the Court observed that this was an issue of fact decided purely on the appreciation of documents, and therefore, no question of law arose. Consequently, the appeal was dismissed.

What were the facts?

The assessee, Steel Authority of India Ltd., filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT). The appeal challenged disallowances made with respect to amounts brought to tax under Explanation 10 to Section 43(1) of the Act. The ITAT and lower authorities considered loan waivers as subsidies. A separate issue involved freight expenditure of Rs. 2,00,000/-. The Assessing Officer (AO) had disallowed this expenditure, the Commissioner of Income Tax (Appeals) granted relief to the assessee, but the ITAT allowed the Revenue's appeal on this point.

What were the issues?

1. Whether the amounts of loan waiver constitute subsidy, leading to disallowance of expenditure under Explanation 10 to Section 43(1) of the Act? The assessee contended that the loan waiver did not constitute a subsidy. The Revenue argued that it did. The Tribunal considered this aspect based on previous rulings. 2. Whether the disallowance of freight expenditure of Rs. 2,00,000/- was justified? The assessee argued for the relief granted by the CIT(A). The Revenue argued for the disallowance. The ITAT had allowed the Revenue's appeal on this issue. The Court noted that these were issues of fact decided on appreciation of documents.

Which sections of the Income-tax Act were involved?

Section 260A,Section 43(1)

AI-generated summary — verify with the full judgment below

$~39 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 55/2018

STEEL AUTHORITY OF INDIA LTD.

..... Appellant

Through Ms. Monika Garg, Adv.

versus

DCIT

..... Respondent Through Mr. Zoheb Hossain, Sr. Standing counsel with Mr. Deepak Anand, Jr. Standing Counsel.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

17.01.2018

Two questions of law urged by the assessee in its appeal under Section 260A of the Income Tax Act, 1961 (‘the Act’) relate to the expenditure disallowed with respect to the amounts brought to tax under explanation 10 to Section 43(1) of the Act. The Income Tax Appellate Tribunal (ITAT) and the adjudicating authorities below were of the opinion that the amounts of loan waiver constitute subsidy. On this aspect, for previous years, this Court had ruled against the same assessee/appellant in Steel Authority of India vs. Commissioner of Income Tax, (2012) IV AD (Delhi) 262. For the same reason, no question of law arises.

So far as the other question of law urged is concerned, it relates to the sum of Rs.2,00,000/- brought to tax by the Revenue, with

respect to freight expenditure. We notice that the AO had disallowed the expenditure claimed; the CIT(A), no doubt, granted the relief to the assessee. However, the ITAT, upon an overall appreciation, allowed the Revenue’s appeal on this aspect. Since these are issues of facts decided purely on appreciation of documents, no question of law arises.

For the above reasons, the appeal has no merit and is therefore, dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J JANUARY 17, 2018 rc

More judgments on Section 43(1)

All 613 judgments and leading authorities on Section 43(1) →

Recent GST High Court judgments

Search GST case law →