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TMI Blog2018 (4) TMI 1691X X X X Extracts X X X X X X X X Extracts X X X X ..... partner, is a subject matter of dispute at the hands of the Revenue - assessee contends that such expenditure is in the nature of his business expenditure and therefore, allowable under section 37 - HELD THAT:- Tribunal did not accept the Revenue's contention that section 37 itself was not applicable and the entire expenditure should have been disallowed. This view of the Tribunal, the Revenue has challenged in corresponding appeal [2018 (4) TMI 1686 - GUJARAT HIGH COURT]. However, in the present appeal, the question is confined to the disallowance under section 14A of the Act which arises out of the Tribunal's decision in assessee's appeal and which, as noted above, was not allowed by the Tribunal. Therefore, this question is not entertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- 23-4-2018 - MR. JUSTICE AKIL KURESHI And MR. JUSTICE B.N. KARIA For the Appellant : MR.VARUN K.PATEL(3802) For the Respondent : MR S N SOPARKAR, SR ADV WITH MR B S SOPARKAR(6851) ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Tax Appeal is admitted for consideration of following substantial questions of law: 1. Whether on the facts and circumstances of the case and in law, the ITAT was justified in directing the AO to delete the transfer pricing adjustment of ₹ 5,21,70,765/- made by it on account of Interest on loan to Sun Pharma Global Inc (AE) at London Inter Bank Offer Rate (LIBOR) Plus 2% Rate =7.401% which is almos equal to the Prime Lending Rate or American Bank lending rate? 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act in relation to the expenditure for registration of Foreign Trade Marks and Patents? 2. We notice that the Revenue has suggested two more questions which read as under: (1) Whether on the facts and circumstances of the case and in law, the ITAT was justified in directing the AO to calculate amount of disallowance u/s. 14A of the Act as per Rule 8D on the issue of disallowance of expenses incurred by the assessee on behalf of M/s. Sun Pharmaceutical Industries? (2) Whether on the facts and circumstances of the case and in law, the ITAT was justified in directing the Assessing Officer to consider Foreign Exchange Fluctuation Gain of ₹ 14,33,80,289/- on account of cancellation/renewal of forward contracts made by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The Tribunal rejected the Revenue's appeal also. In other words, the Tribunal did not accept the Revenue's contention that section 37 itself was not applicable and the entire expenditure should have been disallowed. This view of the Tribunal, the Revenue has challenged in corresponding appeal being Tax Appeal No. 312 of 2018. However, in the present appeal, the question is confined to the disallowance under section 14A of the Act which arises out of the Tribunal's decision in assessee's appeal and which, as noted above, was not allowed by the Tribunal. Therefore, this question is not entertained in the present Tax Appeal making it clear that the corresponding question of applicability or otherwise of section 37 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 320 ITR 720, the Court was concerned with facts where the assessee had received a gain of ₹ 68.66 lacs on cancellation of forward foreign exchange contract and had treated such surplus as not allowable to tax. The Tribunal had added that it was a capital receipt not allowable to capital gains tax as cancellation of such a contract did not involve any transfer or assignment of any asset within the meaning of section 2(47) of the Act. The question of law framed at the instance of the Revenue in appeal before the High Court was Is profit on cancellation of forward exchange contract, a capital receipt or a revenue receipt? . This Court answered the question against the Revenue making following observations: 14. Thus, the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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