Calcutta High Court
Principal Commissioner Of I.T.-3 vs M/S. Eih Ltd on 7 April, 2022
OD-29&30
ORDER SHEET
IA NO:GA/1/2019;IA NO.GA/2/2019
IN ITAT/201/2019
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION(INCOME TAX)
ORIGINAL SIDE
PRINCIPAL COMMISSIONER OF I.T.-3, KOLKATA
-VS-
M/S. EIH LTD.
BEFORE:
HON'BLE JUSTICE T.S. SIVAGNANAM
AND
HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
DATE: 7TH APRIL 2022.
Mr. T. Mitra, Adv., for appellant/petitioner.
Mr. A. Choudhury, Adv.; Mr. S. Sen, Adv., for respondent.
The Court: Heard the learned counsel for the parties.
There is a delay of 339 days in filing the appeal. We have perused
the affidavit filed in support of the application for condonation of delay and we
find the explanation offered to be satisfactory.
Hence, the delay in filing the appeal is condoned and the application
for condonation of delay is allowed.
The appeal is admitted on the following substantial questions of law
nos.(i), (ii) and (iii):
"(i) Whether on the facts and the circumstances of the case, the
Learned Tribunal fell in error in reversing the order passed by
the Assessing Officer and upheld by the Dispute Resolution
Panel holding that providing corporate guarantee by the
assessee to its Associated Enterprise for the purpose of
business amounts to international transaction as per the
explanation to section 92B of the Income Tax Act and rightly
applied the Arms Length Method(ALP) fixing the guarantee
fee rate at 3%?
(ii) Whether the Learned Tribunal committed substantial error of
law in deletion of the addition of Rs.2,56,49,228/- made by the
Assessing Officer by holding that the guarantee fee rate of 3%
to be the Arms Length for marking the transactions of receipt
of corporate guarantee from the subsidiary?
(iii) Whether the Learned Tribunal committed substantial error of
law and its order is perverse in respect of expenditure of
Rs.3,51,52,181/- which was disallowed by the Assessing
Officer under section 14A of the Act read with Rule 8D of the
Income Tax Rules, 1962 and upheld by the Dispute Resolution
Panel?
So far as substantial questions of law nos.(iv) and (v), as proposed by
the revenue, they are as follows:
(iv) Whether on the facts and in the circumstances of the case, the
Learned Tribunal fell in error in allowing aircraft and
maintenance charges including depreciation for
Rs.5,33,22,000/- which was disallowed by the Assessing
Officer and upheld by the Dispute Resolution Panel?
(v) Whether on the facts and in the circumstances of the case, the
Learned Tribunal committed substantial error of law in
reversing the order of the Assessing Officer and the DRP with
regard to non-allowance of set off of Long Term Capital Loss
against Short Term Capital Gains under section 74 of the
Income Tax Act?
So far as question no.(iv) above is concerned, the issue is covered by
the judgment dated July 23, 2018 passed in ITAT No.53 of 2017 for the
assessment year 2016-17. Following the said decision, question of law no.(iv)
stands rejected.
So far as question no.(v) above is concerned, identical question was
decided against the revenue in ITAT No.32 of 2020 for the assessment year 2011-
12 by following the decision in the case of CIT -vs- Dempo Co. Ltd., reported in
(2016) 74 Taxman.com 15(SC). Therefore, question of law no.(v) stands rejected.
Let requisite number of informal paper books be filed by the
Advocate-on-Record of the appellant by eight weeks upon service of copy of the
same on the learned counsel for the respondent at least seven days before the date
of hearing of the appeal. Settlement of index and all other formalities are
dispensed with.
List the appeal after ten weeks.
Since we are not inclined to stay the order impugned, the application
for stay stands closed.
(T.S. SIVAGNANAM, J.)
(HIRANMAY BHATTACHARYYA, J.)
tk
