9911796707
TMI Blog2024 (7) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... tself records that the assessee had not earned any exempt income during the assessment year and even investments were made in its subsidiary for commercial expediency for which no borrowings were specifically undertaken. Therefore, the question of disallowing any expenditure would not arise. The ITAT further held that the interest paid u/s 36(1)(iii) of the Act was an allowable deduction as the borrowed funds were duly utilised by the assessee for its own business. TP Adjustment on interest earned by the assessee in connection with loans granted to its Associated Enterprise - Respondents correctly held with respect to the deletion of the Transfer Pricing Adjustment on account of interest earned by the assessee in connection with loans granted to its Associated Enterprise [AE]. Cash payments u/s 40A(3) read with Rule 6DD(k) - ITAT correctly deleted addition observing cash payments u/s 40A(3) read with Rule 6DD(k) alongwith development charges, consultancy charges payments made by the assessee and interest paid on amount advanced to various third party companies. Disallowance on interest paid in respect of delay in payment of Indirect Taxes (Service Tax and VAT) - ITAT correctly held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned counsel appearing for the appellant and Mr. Pardiwala, learned senior counsel appearing for the respondent, we take note of the following questions which are proposed: - 1. Whether on the facts and circumstances of the case and in law, the Hon'ble Income Tax Appellate Tribunal ('ITAT') has erred in holding that the transaction of Composite Scheme of Arrangement and Amalgamation ('Scheme') took place in the previous year relevant to Assessment Year 2011-12 and not in the relevant previous year under consideration ended March 31, 2012, corresponding Assessment Year 2012-13. 2. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in holding that since the Scheme has been approved by the Hon'ble High Court could not have been regarded as a colourable device to avoid payment of the taxes and that the validity and genuineness thereof cannot be questioned. 3. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in holding that the transactions pursuant to the Scheme cannot be regarded as having being carried during the course of business and. therefore, provisions of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounting to Rs.43,17,02,728 on account of interest charged on loan granted by the Assessee to its Associated Enterprise namely Aamby Valley (Mauritius) Limited. 13. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in deleting the addition amounting to Rs.39,58,925/- made under Section 40A(3) of the Act in respect of payment made to M/s Aishwarya Enterprises. 14. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in deleting the disallowance of the consulting charges amounting to Rs.12,66,63,005/- paid by to M/s Siva Ventures Limited. 15. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in deleting the addition of interest amounting to Rs.6.24 crores made in respect of amounts advanced to M/s Charita City Homes Jaunpur Private Limited. 16. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in deleting the addition made amounting to Rs.4,14,944/- on account of notional interest in respect of long outstanding balance of imprest. 17. Whether on the facts and circumstances of the case and in law, the Hon'ble I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrectly observes that the Show Cause Notice [SCN] itself records that the assessee had not earned any exempt income during the assessment year and even investments were made in its subsidiary for commercial expediency for which no borrowings were specifically undertaken. Therefore, the question of disallowing any expenditure would not arise. The ITAT further held that the interest paid under Section 36(1)(iii) of the Act was an allowable deduction as the borrowed funds were duly utilised by the assessee for its own business. 5. Question 12 has also been correctly answered by the ITAT and we find that the respondents correctly held with respect to the deletion of the Transfer Pricing Adjustment on account of interest earned by the assessee in connection with loans granted to its Associated Enterprise [AE] . 6. The ITAT has also made appropriate observations with regard to questions 13 to 18 pertaining to cash payments under Section 40A(3) of the Act read with Rule 6DD(k) of the Income Tax Rules, 1962 [Rules] alongwith development charges, consultancy charges payments made by the assessee and interest paid on amount advanced to various third party companies. 7. While deleting the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same of any government or statutory authority or local body and shall be appropriately mutated by the statutory authorities concerned in favour of respective Business SPVs upon the vesting and transfer of the Demerged Undertakings pursuant to this Scheme. In so far as they relate to the Demerged Undertakings, the benefit of all statutory and regulatory permissions, licenses, environmental approvals and consents, sales tax registrations or other licenses and consent shall vest in and become available to respective Business SPVs pursuant to this Scheme. In so far as the various incentives, subsidies, special status and other benefits or privileges enjoyed, granted by any Government body, local authority or by any other person are concerned, the same shall vest with and be available to respective Business SPVs. on the same terms and conditions. In particular and without prejudice to the generality of the foregoing, benefit of all balances relating to CENVAT or Service Tax or VAT being balances pertaining to the Demerged Undertakings, shall stand transferred to and vested in respective Business SPVs as if the transaction giving rise to the said balance or credit was a transaction car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not a case of amalgamation of AVVPL into the assessee-company. No doubt in view of the para-II of the Composite Scheme of Arrangement and Amalgamation, various undertakings will first vest in various SVPs, but, subsequently due to the applicability of Para-III of the Scheme, the holding Company of all the SVPs i.e., AVVPL got amalgamated into the assessee-company and all the assets and liabilities of the amalgamating company, immediately before the amalgamation becomes the property and liability of the assessee-company by virtue of the amalgamation and due to the simultaneously retrospective amendment to Section 47(vii) and in Section 2(1B) which defines the amalgamation. The condition of amalgamation is, therefore, stands complied with in this case since the merging of AVVPL into the assessee-company, in our view, complied with all the three conditions as stipulated, in the definition of the amalgamation, it cannot be said that it is not a case of amalgamation. No bonus shares have been issued out of general reserve. We, therefore, hold that provisions of Section 56 (2)(viia) cannot be applied in respect of this transaction as it is a case where the transfer in the case of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
