PRINCIPAL COMMISSIONER OF INCOME TAX DELHI 4 vs. NESTLE INDIA LTD

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ITA/300/2023HC DelhiDLHC01001931202204 July 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that proposed question nos. (i), (ii), and (iv) were covered by previous judgments of the court. Specifically, question (i) was covered by the court's decision in ITA 662/2005, where the Revenue's appeal was dismissed. Questions (ii) and (iv) were covered by the court's judgment dated 17.05.2023 in ITA 281/2023, where it was concluded that no substantial question of law arose and the Tribunal's view was sustained. Proposed question no. (iii) was also the subject matter of another appeal, ITA 303/2023, where the Revenue's appeal was dismissed and the questions of law were answered in favour of the respondent/assessee. Consequently, the court found that no substantial question of law arose for consideration in the present appeal. The appeal was accordingly closed.

What were the facts?

This appeal by the Principal Commissioner of Income Tax (Revenue) concerns Assessment Year 2010-11. The Revenue is challenging a common order dated 31.07.2020 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No.4916/Del/2014. The assessee is Nestle India Ltd. The appeal raises four proposed questions of law concerning additions made by the Assessing Officer (AO) and disallowances made under Section 14A, as well as depreciation claims. The High Court notes that some of these issues are covered by previous judgments of the court, while another is addressed in a contemporaneously decided appeal.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether the ITAT was correct in deleting the addition of Rs.73,40,98,815/- made by the AO on account of disallowance of license fee. 2. Whether the ITAT was correct in reducing the disallowance under Section 14A of the Income Tax Act to Rs.11,52,656/- from Rs.16,95,310/-, made by the AO in accordance with Rule 8D and CBDT Circular 5/2014. 3. Whether the ITAT was correct in allowing higher depreciation at 60% as against 15% allowed by the AO, overlooking the functional test and establishing perversity, especially when the case of BSES Rajdhani Powers was overruled by the Madras High Court in Dinamalar Vs ITO. 4. Whether the ITAT was correct in confirming the order of the CIT(A) deleting the addition of Rs.17,27,059/- made by the AO on account of disallowance of depreciation on energy saving & pollution control devices, which were not put to use during the year. Assessee's contentions were not recorded in the provided text. The Revenue argued for the correctness of the AO's additions and disallowances on these points, citing perversity and overruled precedents in question (iii).

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

ITA 300/2023

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

Judgement reserved on 24.05.2023 %

Judgement pronounced on 04.07.2023

+ ITA 300/2023

PRINCIPAL COMMISSIONER OF INCOME TAX DELHI 4

..... Appellant Through: Mr Abhishek Maratha, Sr Standing Counsel with Mr Akshat Singh, Standing Counsel.

versus

NESTLE INDIA LTD

..... Respondent Through: Mr Ajay Vohra, Sr Advocate with Mr Neeraj Jain, Mr Aniket D. Agarwal and Mr Saksham Singhal, Advs. CORAM: HON'BLE MR JUSTICE RAJIV SHAKDHER HON'BLE MR JUSTICE GIRISH KATHPALIA

RAJIV SHAKDHER, J.:

1.

This appeal concerns Assessment Year (AY) 2010-11. 2. Via the above-captioned appeal, the appellant/revenue has assailed the common order of the Income Tax Appellate Tribunal [in short, “Tribunal”] dated 31.07.2020 passed in ITA No.4916/Del/2014. The following questions of law have been proposed by the appellant/revenue in the above-captioned appeal: “(i) Whether in the facts and circumstances of the case and in law Hon'ble ITAT is correct in deleting the addition of Rs.73,40,98,815/- made by AO, on account of disallowance of license fee?

(ii) Whether in the facts and circumstances of the case and in law Digitally Signed By:ATUL JAIN Signing Date:05.07.2023 14:23:48 Signature Not Verified

ITA 300/2023

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Hon'ble ITAT is correct in reducing the disallowance U/S 14A of the Act to Rs.11,52,656/- from Rs.16,95,310/- made by the Assessing Office in accordance with Rule 8D and according to CBDT Circular 5/2014 dated 1l/02/2014?

(iii) Whether in the facts and circumstances of the case and in law Hon'ble ITAT is correct in allowing higher depreciation @60% as against depreciation @15% allowed by the AO overlooking the functional test proving and establishing perversity in the order passed by them both on facts and in law, especially when the case of BSES Rajdhani Powers has been overruled by Hon'ble Madras High Court in the case of Dinamalar Vs ITO Ward 1(1) Madurai [(2016) 74 taxmann.com 14 (Madras)]?

(iv) Whether in the facts and circumstances of the case and in law Hon'ble ITAT is correct in confirming the order of CIT(A) deleting the addition of Rs.17,27,059/- made by AO on account of disallowance of depreciation on energy saving & pollution control devices, which were not put to use by the assessee, during the year under consideration?”

3.

Insofar as proposed question no. (i) is concerned, it is covered by the decision dated 11.05.2011 of the coordinate bench of this court rendered in ITA 662/2005. Via this decision, appellant/revenue’s appeal was dismissed. Likewise, proposed question nos. (ii) and (iv) are covered by our judgement dated 17.05.2023, rendered in ITA 281/2023. Via the aforesaid judgement, we concluded that no substantial question of law arose for consideration and thus, sustained the view taken by the Tribunal. 4. The remaining question i.e., proposed question no. (iii) was also subject matter of another appeal preferred by the appellant/revenue i.e., ITA 303/2023 in which arguments were heard and judgement was reserved on 24.05.2023. 5. In ITA 303/2023, the appeal of the appellant/revenue has been dismissed and the questions of law, as framed, have been answered in favour Digitally Signed By:ATUL JAIN Signing Date:05.07.2023 14:23:48 Signature Not Verified

ITA 300/2023

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of the respondent/assessee. 6. Hence, in the above-captioned appeal, no substantial question arises for our consideration. 7. The appeal is, accordingly, closed.

(RAJIV SHAKDHER) JUDGE

(GIRISH KATHPALIA) JUDGE

JULY 4, 2023/vg

Digitally Signed By:ATUL JAIN Signing Date:05.07.2023 14:23:48 Signature Not Verified

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