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II. Direct Taxes Case Laws:
1. ACIT Vs. M/s TBL International Ltd., I.T.A. No. 1322 /Del/2012, Date of Order: 10.07.2015, ITAT - Delhi
Whether the provision for booked debts is of capital nature, for the purpose of calculating book profit u/s 115JB
Held No
Held
That addition of provision for book debts of Rs. 41,43,845/- under
section 115JB. The Assessing Officer had made this addition on the
ground that the provision was made on account of doubtful advance of
capital nature. On appeal before the learned CIT(A), the CIT(A) allowed
this ground. This issue is no longer res integra as is covered by the
decisions of Hon’ble Supreme Court in the cases of Apollo Tyres Ltd. Vs
Commissioner Of Income Tax 255 ITR 273 and 300 ITR 251, Malayala
Manorama Co. Ltd. v. CIT. Accordingly, this ground of appeal filed by
the Revenue is dismissed.
(Please click here for judgment)
2. M/s
Seagram Distilleries Pvt. Ltd. Vs. Jt. Commissioner of Income Tax,
I.T.A. No. 4278/Del/2010, Date of Order: 10.07.2015, ITAT – Delhi
Whether
the brand registration expenses and other expenses upon development of
brand incurred by assessee are in the nature of revenue expenditure.
Held Yes
In the
profit and account, the appellant debited an amount of Rs.
30,18,52,870/- under the head advertising, sales promotions and rebates.
Out of the same the appellant had shown expenses of Rs. 10,16,10,577/-
as brand expenses. The appellant explained that these expenses were
incurred for advertising, sales promotion, cost and distribution etc.
The Assessing Officer held that the brand expenses were incurred for
enhancing the image of the brand and as such it was resulting in an
enduring benefit. Therefore, he disallowed the same holding to be
capital expenditure. The issue whether the advertisement expenditure is
revenue or capital is adjudicated by the Hon’ble Jurisdictional High
Court in the case of CIT Vs. Monto Motors, 206 TAXMAN 43 (Del.) vide
para 4, wherein
-
“Advertisement
expenses when incurred to increase sales of products are usually
treated as a revenue expenditure, since the memory of purchasers or
customers is short. Advertisements are issued from time to time and the
expenditure is incurred periodically, so that the customers remain
attracted and do not forget the product and its qualities. The
advertisements published/displayed may not be of relevance or
significance after lapse of time in a highly competitive market, wherein
the products of different companies compete and are available in
abundance. Advertisements and sales promotion are conducted to increase
sale and their impact is limited and felt for a shortduration. No
permanent character or advantage is achieved and is palpable, unless
special or specific factors are brought on record. Expenses for
advertising consumer products generally are a part of the process of
profit earning and not in the nature of capital outlay. The expenses in
the present case were not incurred once and for all, but were a
periodical expenses which had to be incurred continuously in view of the
nature of the business. It was an ongoing expense. Given the factual
matrix, it is difficult to hold that the expenses were incurred for
setting the profit earning machinery in motion or not for earning
profits.”
Following
the above ratio laid down by the Hon’ble Jurisdictional High Court, we
allow this ground of appeal filed by the assessee.
(Please click here for judgment)
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III. Indirect Taxes Case Law:
1. M/s
P&P Overseas Vs. Commissioner of Central Excise, Excise Appeal Nos.
1307-1308 of 2011, Date of Decision: 29.10.2014, CESTAT - New Delhi
Issue:
Whether refund of CENVAT credit is allowed if input services were used
in relation to export and the export proceeds were not realized?
Held: Yes
The
appellant are a 100% EOU. They could not utilize the Cenvat credit for
payment of duty on DTA clearances and since the accumulated Cenvat
credit was attributable to the input services which had been used in or
in relation to manufacture of the finished products which has been
exported out of India, the appellant filed two claims for the period
from July 2008 to September 2008 and October 2008 to December 2008 for
cash refund of the accumulated Cenvat credit under Rule 5 of the Cenvat
Credit Rules, 2004. The refund claims were decided by Assistant
Commissioner by two separate orders. The Assistant Commissioner
disallowed certain portion of refund claim filed by the appellant on the
ground that the CHA services and courier services are not eligible for
Cenvat credit and secondly the export proceeds have not been received by
the appellant. The Commissioner (Appeals) upheld the order of Assistant
Commissioner.
On
the matter before CESTAT, to the first ground given by the Assistant
Commissioner for disallowance was that the CHA services and courier
services are not eligible for Cenvat credit, the Hon’ble CESTAT held
that the same issue was already decided in the favour of appellant
earlier. So, this ground is not valid for rejection. The second ground
for rejection was that the export proceeds have not been received by the
appellant to this the Hon’ble Cestat held this condition is neither
there in Rule 5 of the Cenvat Credit Rules nor this condition has been
prescribed in the Notification No. 5/2006-C.E. (N.T.) issued under Rule 5
of the Cenvat Credit Rules. In view of this, the denial of refund claim
on the ground that the export proceeds have not been received is not
sustainable.
(Please click here for judgment)
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IV. Company Law & Other Matters:
1. Sh.
Shrikant Mantri Vs. M/s Jindal Steel & Power Ltd., CP No. 25/2001
& 26/2011, Date of Order: 24.04.2015, Company Law Board - New Delhi
In
the matter of Section 111A of the Companies Act, 1956 whereby the title
of shares with complicated and controversial facts is to be decided by
the court with detailed trial. As such, no relief as prayed in the
petitions is allowed and hence, in interest of justice, the petitioner
is hereby allowed to take up the matter in the appropriate Civil Court.
(Please click here for judgment)
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