2015 (11) TMI 1687 - HC - Income Tax

Licence fee payable to the Railways is an accrued liability - Held that - The questions to be considered in these appeals of the Revenue as well as the cross-objections of the Assessee are reframed as under (i) Whether the order dated 31st July 2009 of the ITAT is in conformity and decides all the aspects/issues remitted to it by order dated 11th December 2008 passed by this Court? (ii) If the answer to the above question is in the negative, was the assumption of jurisdiction under Section 147 of the Act for the AYs 1997-98 to 2000-01 and 2002-03, valid? (iii) Was the ITAT right in holding the licence fee payable to the Railways to be an accrued liability?

Summary

Issues:
1. Whether the license fee payable by the Assessee to the Railways is an accrued liability?
2. Scope of remand by the High Court to the ITAT regarding the validity of assumption of jurisdiction under Section 147 of the Act and reopening of assessment under Section 148.
3. Consequences of ITAT's failure to decide all aspects/issues remitted by the High Court.
4. Reframing of questions for consideration in the appeals of the Revenue and cross-objections of the Assessee.

Analysis:
1. The Revenue's appeal questions whether the license fee is an accrued liability. The Assessee contends that the ITAT misunderstood the scope of remand by the High Court and failed to address the validity of jurisdiction assumption under Section 147 and reopening of assessment under Section 148. The Assessee filed appeals challenging the ITAT's decision, seeking a review of the remand scope and the jurisdiction assumption issue.

2. The High Court reframed the questions for consideration, focusing on whether the ITAT's order aligns with the High Court's remand scope and if the license fee is an accrued liability. The Court deliberated on the consequences of a negative answer to the first question, considering either remanding the matter to the ITAT again or deciding the issue itself. The Court emphasized the need for clarity on the consequences of a negative answer to the first question.

3. The reframed questions now include whether the ITAT's order adheres to the High Court's remand directions, the validity of jurisdiction assumption for specific assessment years, and the correctness of treating the license fee as an accrued liability. The Revenue sought additional time to address the reframed questions, leading to a further hearing scheduled for January 22, 2016. The case involves intricate legal considerations and requires a detailed examination of the remand scope and jurisdictional issues to ensure a fair and just resolution.