Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘C ‘BENCH KOLKATA
Before: Hon’ble Shri J.Sudhakar Reddy, AM & Smt. Madhumita Roy, JM ]
PER MADHUMITA ROY, JM
The instant appeals have been filed by the assessee formerly known as Coats India Limited now DIC India Ltd before us for A.Y.1989-90 and 1990-91 by an under common order dated 17.09.1992. The ld. Tribunal was pleased to dispose of these two appeals against which the assessee preferred reference applications u/s 256(1) of the Income Tax Act, 1961 (the Act) before the ld. Tribunal being R.A.No.604/Cal/1997 and R.A.No.605/Cal/1997 respectively which were also dismissed by the ld. Tribunal by an under common order dated 17.02.1998.
ITA No.766/Cal/1993 (A.Y.1989-90)
Being aggrieved by the order passed by the ld. Tribunal dated 17.02.1998 reference application u/s 256(2) in connection with was filed before the Hon’ble Calcutta High Court which was admitted on 05.01.1998. & 200/Cal/1994 Coats of India Ltd. A.Y.1989-90 & 1990-91 2 Ultimately the same was disposed of by a judgment order dated 20.06.2018 by a Divisional Bench presided by Hon’ble Justice I.P.Mukherjee and Hon’ble Justice Amrita Sinha whereby the following orders were passed :-
“ As far as question (b) is concerned, it is clearly covered by the judgment of the Supreme Court in Commissioner of Income Tax versus Woodward Governor India P.Ltd reported in [2009] 312 ITR 254 (SC). We are also convinced that this particular issue is not covered by Section 43A of the Income Tax Act which has come into force from 1st April, 2003 inasmuch as there is no acquisition by the assessee of any asset from a country outside India for the purpose of its business. The question is answered in the negative in favour of the assessee.
As far as questions (c),(d),(e),(f),(g) are concerned, Mr. Khaitan submits that the order of the Tribunal is perverse. He said that on the one hand the Assessing Officer had partially allowed commission payments as expenditure and on the other hand questioned the authority of the assessee to make such payment. This according to learned Counsel was contradictory resulting in a perverse order. In any event, the assessee should have refrained from disallowing Rs.14,25,276/- on that account.
First of all, in our opinion, the amount involved is very small. After so many years we are not inclined to deal with the issue. Moreover, the perversity if at all arises from non application of questions of fact. Here, also after passage of so many years we are not inclined to investigate the correctness of factual findings.
Therefore, the above questions (c) to (g) need not be answered.
We direct the Registrar General of this Court to transmit a copy of this order to the Income Tax Tribunal ‘ C ‘ Bench, Kolkata. We direct that it should revise its order out of which this reference arises in accordance with the observations made in this order, resulting in answering question (b) referred to above in favour of the assessee.
We request the Tribunal to make its decision within three months of communication of this order.
The order of the Tribunal relating to the issue covered by question (b) is set aside.”
& 200/Cal/1994 Coats of India Ltd. A.Y.1989-90 & 1990-91 3
Respectfully following the judgement and order dated 20.06.2018 passed by the Hon’ble High Court of Calcutta we now deal with the issue in terms of the direction given by the Hon’ble Calcutta High Court.
The issue relating to the disallowance of subscription to Staff Recreation Club u/s 40(a)(9a) has not been pressed by the assessee before the Hon’ble Calcutta High Court. Hence the same was dismissed by the Hon’ble court as not pressed. Thus the order passed by the ld. Tribunal on this issue rejecting the claim of the assessee is hereby confirmed.
The issue relating to the disallowance of liability arising out of an account of exchange fluctuation loss in respect of fees payable to foreign company to the tune of Rs.7,00,200/- has been considered by the Hon’ble Jurisdictional High Court. Following the judgment of the Hon’ble Supreme Court in the matter of CIT vs Woodworth Governor Pvt. Ltd. (312 ITR 254) the Hon’ble High Court at Kolkata has been pleased to direct us to allow deduction thereby allowing the issue itself in favour of the assessee.
In that view of the matter we allow the liability arising on account of foreign exchange loss in respect of fees payable to the foreign company to the tune of Rs.700,200/-,
The issue relating to the disallowance of commission paid to selling agent to the tune of Rs.14,25,276/- has been dismissed by the order dated 20.06.2018 passed by the Jurisdictional High Court at Kolkata since no substantial question of law arose. Thus the order passed by the ld. Tribunal rejecting the claim of the assessee on this issue is hereby confirmed.
The issue relating to the disallowance of credit liability to the tune of Rs.13,85,130/- u/s 40A(7) of the Act has been dismissed by the Hon’ble High Court at Kolkata was not pressed by the assessee. In view of the matter the order passed by this ld. Tribunal rejecting the claim of the assessee on this particular issue is confirmed.
ITA No.200/Kol/1994 A.Y.1990-91 & 200/Cal/1994 Coats of India Ltd. A.Y.1989-90 & 1990-91 4
The reference in connection with was disposed of by a judgement order dated 21.06.2018 by a Divisional Bench presided by Hon’ble Justice I.P.Mukherjee and Hon’ble Justice Amrita Sinha whereby the following orders were passed :-
“As far as questions (h) and (i) of this reference application are concerned, the issue is covered and admitted to be covered by learned counsel for the revenue, in favour of the assessee by the decision of the Supreme Court in Commissioner of Income Tax vs. General Insurance Corporation reported in [2006] 286 ITR 232 (SC) where the highest Court affirmed the Bombay and Calcutta High Court decisions referred to therein and held that the expenditure for issuance of bonus shares was revenue expenditure. The Court while dealing with the issue referred to its own earlier decisions in Punjab State Industrial Development Corporation Limited reported in (1997) 225 ITR 292, and Brooke Bond India Limited reported in (1997) 225 ITR 798 and remarked that they were not of much assistance to it.
We direct the Registrar, Original Side of this Court to send a copy of this order to the Income Tax Appellate Tribunal, C Bench: Calcutta.
We direct the Tribunal to answer the reference in accordance with our observations above resulting in answering the questions (a), (h) and (i) in favour of the assessee. We request the learned Tribunal to pronounce its decision within three months of communication of this order.”
Respectfully following the judgement order dated 21.06.2018 passed by the Hon’ble High Court of Calcutta we now deal with the issue in terms of the direction given by the Hon’ble Calcutta High Court.
The issue relating to the disallowance of liability arising on account of exchange fluctuation loss in respect of fees payable to the foreign company to the tune of Rs.1,92,227/- which has been referred by the assessee before the Hon’ble High Court and was considered. Relying upon the judgement of the Hon’ble Supreme Court in the matter of CIT vs Woodworth Governor Pvt. Ltd. (312 ITR 254) the Hon’ble Jurisdictional High Court has been pleased to direct us to allow the deduction and thereby the issue in favour of the assessee. In view of the matter we allow the liability & 200/Cal/1994 Coats of India Ltd. A.Y.1989-90 & 1990-91 5 to the tune of Rs.1,92,227/- arising on account of exchange fluctuation loss in respect of fees payable to the foreign company.
The issue relating to disallowance of expenses of Rs.69,692/- incurred on account of bonus shares has been considered and disposed off by the Jurisdictional High Court. Relying upon the judgement of the Hon’ble Supreme Court in the case of CIT vs General Insurance Corporation (286 ITR 232) the Hon’ble Court has been pleased to direct us to allow deduction and thereby allowing the issue in favour of the assessee. We thus respectfully following the judgment and order passed by the Jurisdictional High Court allow the expenses to the tune of Rs.69,692/- incurred on issue of bonus shares in favour of the assessee.
Both the assessee’s appeals are hereby disposed of in terms of the mandates/directions given by the Hon’ble Jurisdictional High Court.
Order pronounced in the Court on 26.09.2018.