LARSEN & TOUBRO LIMITED (SUCCESSOR TO M/S L & T VALDEL ENGINEERING LIMITED ),MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE 5(4), MUMBAI

ITA 4554/MUM/2023Status: DisposedITAT Mumbai30 October 2024AY 2014-15Bench: SMT. BEENA PILLAI (Judicial Member), SHRI OMKARESHWAR CHIDARA (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the payments made by the assessee to its holding company were in the nature of reimbursement of expenses for employees deputed to the assessee and were incurred in the course of business. Therefore, the disallowance was incorrect.

What were the facts?

The assessee, L&T Valdel Engineering Ltd. (now Larsen & Toubro Ltd.), claimed deduction for amounts paid to its holding company, L&T Ltd., as reimbursement for ESOP benefits provided to deputed employees. The Assessing Officer disallowed this deduction.

What were the issues?

Whether the reimbursement of ESOP costs to a holding company for deputed employees is a deductible business expense. Whether forward contracts entered into by an exporter to hedge foreign exchange fluctuations constitute speculative transactions.

Which sections of the Income-tax Act were involved?

Section 43(5)

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Cases cited in this judgment(18)Show list

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Heard together (8 matters)

I.T.A. No.4551/Mum/2023
I.T.A. No.4552/Mum/2023
I.T.A. No.4553/Mum/2023
I.T.A. No.4554/Mum/2023
I.T.A. No.4555/Mum/2023
I.T.A. No.4684/Mum/2023
I.T.A. No.4767/Mum/2023
I.T.A. No.4682/Mum/2023

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI OMKARESHWAR CHIDARA, AM I.T.A. No.4552/Mum/2023 (Assessment Year: 2012-13) I.T.A. No.4554/Mum/2023 (Assessment Year: 2014-15)

Larsen & Toubro Ltd. (successor to ACIT, CC-5(4) (earlier AO L&T Valdel Engineering Ltd.) DCIT, Circle-11(5), Bangalore), L&T House, N.M. Marg, Vs.

Room No. 1927, 19th Floor, Mumbai-400001. Air India Building, PAN : AAACL0140P Nariman Point, Mumbai-400021 I.T.A. No.4767/Mum/2023 (Assessment Year: 2011-12) DCIT, CC-5(4) , L and T Valdel Engineering Ltd.

Room No. 1927, 19th Floor, RMG Galleria, 5th Floor, Opp. To Air India Building, Yelahanka Police Station, Vs.

Nariman Point, Mumbai-400021 Bangalore Bellary Road, Yelahanaka, Bangaluru-560064. PAN : AABCL0552G DCIT, CC-5(4) , Larsen & Toubro Ltd. (earlier Room No. 436, 4th Floor, known as L&T Valdel Kautilya Bhawan, Bandra Kurla Engineering Ltd.)

Vs.

Complex, Mumbai-400

The order continues below.

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