9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (12) TMI 142 - HC - Income TaxForeign exchange Fluctuation Held that - Following Dredging Corporation of India Ltd 2011 (7) TMI 584 - ITAT VISAKHAPATNAM - The gain on account of foreign exchange fluctuation, is related to the activity of operating qualifying ships - It has to be taxed under the Tonnage Tax Scheme as provided under Chapter XIIG of the Act Decided in favour of assessee. Gratuity Held that - The amount paid towards gratuity is deductible u/s 43B - The Assessing Officer was directed to verify the bank account, and examine the matter in the light of such other evidence Partly allowed in favour of assessee. Expenses on issue of FCCB Held that - The Assessing Officer was directed to examine the issue of allowability or otherwise of the expenses incurred by the assessee in connection with the issue of FCCBs - Partly allowed in favour of assessee.
Issues involved:
1. Jurisdiction of Commissioner of Income Tax under Section 263 of the Income Tax Act. 2. Assessment of difference in foreign exchange as income from other sources. 3. Disallowance of gratuity. 4. Disallowance of expenses for issuing Foreign Currency Convertible Bonds (FCCB). Analysis: Issue 1: Jurisdiction of Commissioner of Income Tax under Section 263 The appeal challenged the order of the Commissioner of Income Tax exercising revisional powers under Section 263 of the Income Tax Act. The appellant contended that the preconditions for such jurisdiction were not fulfilled. The Tribunal found that the Assessing Officer did not pass a speaking order and the initial assessment lacked proper application of mind. The Tribunal held that the non-application of mind was prejudicial to the party's interest and justified the Commissioner's exercise of revisionary jurisdiction under Section 263. The appeal was dismissed based on these findings. Issue 2: Assessment of difference in foreign exchange The Tribunal reversed the Commissioner's order regarding the assessment of difference in foreign exchange as income from other sources. It held that the gain on account of foreign exchange fluctuation should be taxed under the Tonnage Tax Scheme. The decision was based on a previous judgment and the nature of the activity related to operating qualifying ships. Issue 3: Disallowance of gratuity Regarding the disallowance of gratuity, the Tribunal found discrepancies in the gratuity liability claimed by the assessee. It directed the Assessing Officer to verify the bank account and examine the matter further to determine the allowability of the claim. The Tribunal modified the Commissioner's order and remanded the issue for fresh assessment. Issue 4: Disallowance of expenses for FCCBs The Tribunal also remanded the matter concerning the disallowance of expenses for issuing Foreign Currency Convertible Bonds (FCCBs). It directed the Assessing Officer to examine the allowability of the expenses in accordance with relevant decisions and after providing a reasonable opportunity of hearing to the assessee. The Tribunal's decision to remand the issue was upheld without any identified illegality or infirmity. In conclusion, the High Court dismissed the appeal, stating that no element of law was involved in the matter. The judgment provided detailed analysis and upheld the decisions made by the Tribunal regarding the various issues raised in the case.
|
