THE PRINCIPAL COMMISSIONER OF INCOME TAX vs. M/S. APOLLO TYRES LTD

Appeal is allowed in part as indicated

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR.JUSTICE VIJU ABRAHAM

loss on forward contract as deduction : 98,10,765 ITA No.44/2017 -5- 7 Disallowance of claim of prepaid expenses as deduction : 5,15,34,726 2.2 We have heard learned Counsel Mr Christopher Abraham and Senior Advocate Mr Joseph Markos for the parties. 3. Substantial Question Nos.1, 1.1, 1.2: “1 Whether the Hon'ble Tribunal, in the facts and circumstances

M/S.APOLLO TYRES LTD. vs. THE DEPUTY COMMISSIONER OF INCOME TAX

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

forward contracts in foreign exchange which was inextricably linked to the advancement of foreign currency loans to the Mauritius subsidiary and the loan was an advance for the purpose of the business of the assessee company. The advantage intended to be gained by the assessee was an enhancement of efficiency of tyre manufacturing business by leveraging the sophisticated technology

M/S. APPOLO TYRES LTD. vs. THE DEPUTY COMMISSIONER OF INCOME-TAX

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

disallowed the set-off claimed by the assessee I.T.A. No.216/2013 -6- under Sec 70 (3) of the Act. 4.2 The reasoning of the Assessing Officer is that whatever income is exempt under different clauses of Section 10, such income shall be removed from the purview of income before computation of the total income of an assessee. Hence, an income that

M/S.APOLLO TYRES LTD. vs. THE DEPUTY COMMISSIONER OF INCOME TAX

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

loss would have been carried forward to next year and allowed accordingly. Simply because assessee has not claimed a particular deduction, it cannot be said to be a colourable device as envisaged by the decision of McDowell case. The deduction relates to payment of bonus which has actually been paid in the present year and deduction has been claimed

THE COMMISSIONER OF INCOME TAX vs. PREMIER TYRES LTD.

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

forward, we bear in view the narrative considered by the authorities under the Act in the orders made by them and do not propose to state these circumstances in detail. The revenue categorized the receipt of lease rental as income from other sources, because the assessee was not actually manufacturing the tyres and selling the manufactured tyres in the market

THE COMMISSIONER OF INCOME TAX, vs. PTL ENTERPRISES LIMITED,

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

forward, we bear in view the narrative considered by the authorities under the Act in the orders made by them and do not propose to state these circumstances in detail. The revenue categorized the receipt of lease rental as income from other sources, because the assessee was not actually manufacturing the tyres and selling the manufactured tyres in the market

THE COMMISSIONER OF INCOME TAX vs. PREMIER TYRES LTD.

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

forward, we bear in view the narrative considered by the authorities under the Act in the orders made by them and do not propose to state these circumstances in detail. The revenue categorized the receipt of lease rental as income from other sources, because the assessee was not actually manufacturing the tyres and selling the manufactured tyres in the market

M/S. APPOLLO TYRES LTD vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR.JUSTICE VIJU ABRAHAM

forward contract. In other words, a notional gain is derived by the assessee. The Assessing Officer, in the draft assessment order under Section 144C of the I.T.A. No. 249/2015 -19- Act, disallowed the said claim and the disallowance was considered by the Dispute Resolution Panel (DRP) as objection no.11. The DRP and the Assessing Officer considered that the assessee rests