PRINCIPAL COMMISSIONER OF INCOME TAX-3 Vs. M/S. EIH LTD.
LAWS(CAL)-2021-12-65
HIGH COURT OF CALCUTTA
Decided on December 16,2021

Principal Commissioner Of Income Tax-3 Appellant
VERSUS
M/S. Eih Ltd. Respondents


Referred Judgements :-

CENTRE OF EXCELLENCE P. LTD. VS. COMMISSIONER OF INCOME TAX [REFERRED TO]
THE COMMISSIONER OF INCOME TAX VS. M/S. NGC NETWORKS (INDIA) PVT. LTD. [REFERRED TO]
ARJUN PANDITRAO KHOTKAR VS. KAILASH KUSHANRAO GORANTYAL [REFERRED TO]


JUDGEMENT

- (1.)This appeal filed by the revenue under Sec. 260A of the Income Tax Act, 1961 (the 'Act ' in brevity) is directed against the composite order dtd. 5th April, 2017 passed by the Income Tax Appellate Tribunal, "A " Bench, Kolkata (the 'Tribunal ' in short) in ITA No.866/Kol/2012 and ITA No.932/2012 for the assessment year 2008-09.
(2.)The revenue has raised the following substantial questions of law for consideration:
(i) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance of Rs.1,99,56,281.00 being 60% of the aggregate expenditure incurred on running and maintenance of aircrafts without considering that the aircrafts were also used for personal purposes of the directors?

(ii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance of Rs.1,30,77,646.00 under Sec. 40(a)(i) on account of professional and consultancy charges to non residents by ignoring the fact that such fees are subject to tax in India under Sec. 9(1) read with Sec. 195 of the act?

(iii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance of Rs.9,27,20,974.00 under Sec. 40(a)(i) on account of advertisement publicity and sales promotion to non resident by ignoring the fact that such expenses are subject to tax in India under Sec. 9(1) read with Sec. 195 of the Act?

(iv) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance of Rs.9,27,20,974.00 under Sec. 40(a)(i) on account of advertisement publicity and sales which was reasonable considering the fact that the documents in support of such expenses were not produced by the assessee before the assessing officer?

(v) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance of expenditure of Rs.1,79,93,426.00 in respect of earning dividend income and tax free interest on US 64 tax free bonds without appreciating the finding of the assessing officer who disallowed 0.5% of average investment by applying rule 8D of income tax rules and made disallowance of expenses under Sec. 14A ?

(vi) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the addition on account of interest amounting to Rs.1,71,99,475.00 being 12% of interest free advances given to subsidiary companies for non business purpose based on the presumption that those advances were made by the assessee out of its own funds and not out of the borrowed funds bearing interest?

(vii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance under Sec. 40(a)(i) of Rs.18,29,94,840/-paid as commission to and sitting fees to directors of the company without deducting tax at source under Sec. 194H of Income Tax Act?

(viii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance under Sec. 40(a)(i) of Rs.3,37,48,429/-paid as commission to non residents by ignoring the fact that such commission are subject to tax in India under Sec. 9(1) read with Sec. 195 of the Income Tax Act?

(ix) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance under Sec. 40(a)(i) of Rs.3,37,48,429/-paid as commission to non residents without considering the facts pertaining to such expenses were not produced by the assessee before the assessing officer?

(3.)We have heard Mr. S. N. Dutta, learned standing counsel assisted by Mr. Soumen Bhattacharjee, learned advocate for the appellant/revenue and Mr. J. P. Khaitan, learned senior counsel for the respondent/assessee.
;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.