M/S Deolite Haskins & Sells, Chennai vs Acit Non Corp Circle 1 (1) Formerly Known ... on 6 December, 2018
1. CIT vs Punjab Tractors Co-op. Multipurpose Society Ltd, 95 Taxman 579
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1 - 10 of 19 (1.50 seconds)M/S. Schneider Electric It Business ... vs Joint Commissioner Of Income Tax, Ltu, ... on 30 April, 2019
93. We have given a very careful consideration to the rival
submissions. Similar issue had arisen for consideration in the case of
Punjab Tractors Co-op. Multipurpose Society Ltd. (supra) before the
Hon'ble Punjab & Haryana High Court. In that case the facts were that
the assessee was engaged in the purchase and sale of tractors, motor
cycles, etc., and doing their repairing. It had received advances from
the buyers of tractors to cover their service charges for a period of one
year after the expiry of initial warranty period. It had shown same on
the liability side in the balance sheet for the assessment year 1978-79
under the head 'Post-Warranty Service Advances' (PWS Advances). It
used to make adjustment of the amount received from PWS Advances
Account to the Workshop Income Account during the quarter in which
the work of repairs and services was done, and included the amount so
adjusted as income of the relevant year. Out of the aggregate amount
: 84 :
IT(TP)A Nos. 299 & 218/Bang/2014
shown in PWS Advances Account, the Assessing Officer treated
proportionate sum for the period covered as the assessee's income for
the assessment year in question. The Commissioner invoked section
263 and held that the entire amounts received in the previous year
towards PWS Advances were trading receipts of the year directly
connected with the business of servicing and repairs of tractors. He,
accordingly, set aside the assessment. On appeal, the Tribunal upheld
the Assessing Officer's action disagreeing with the finding of the
Commissioner. On reference, the Hon'ble Punjab & Haryana High
Court held as follows:
Mgage India P Ltd. , Chennai vs Dcit Corporate Circle 4(1) , Chennai on 17 May, 2019
Ltd.,(2005) reported in 274 ITR
336, CIT vs. P&C Constructions (P) Ltd., (2009) reported in 318
ITR 113 and the decision rendered by the Hon'ble Punjab &
Haryana High Court in the case CIT vs. Punjab Tractors
Cooperative Multipurpose Society Ltd., (1998) reported in 234 ITR
105, held the issue in favour of the assessee for the assessment
year 2011-12. It was further submitted that the Ld.CIT(A) for the
assessment years 2013-14 & 2014-15 had also arrived at the same
conclusion by following the earlier decision of the Tribunal. It was
therefore pleaded that the order of the Ld.CIT(A) may be
confirmed.
M/S. Dell International Services India ... vs Joint Commissioner Of Income Tax, Ltu, ... on 18 March, 2022
11.5.5 As regards the taxation of future lease rentals are
concerned, we notice from clause 21 of the lease agreement
states that the lease is a cancellable lease. According to the
assessee, the A.O. has brought to tax the entire principal
portion of the lease rentals amounting to Rs.5,89,52,591 in the
current assessment year. We are of the view that the entire
lease rental income (subsisting during the lease period) does not
49
IT(TP)A No.269 & 217/Bang/2014
M/s.Dell International Services India Private Limited
accrue in the first year as the same ought to be taxed as and
when they accrue over the lease period. When the A.O. has
accepted that the interest component of lease would accrue as
and when the same is due, the same principle would apply to
the principle components as well. The stand of the assessee is
supported by the judgment of the Hon'ble Punjab & Haryana
High Court in the case of CIT v. Punjab Tractors Co-operative
Multipurpose Society Ltd. (1997) 95 taxman 579 (P&H) and the
judgment of the Hon'ble Madras High Court in the case of Coral
Electronics (P) Ltd. (2005) 142 taxman 481 (Mad.). The learned
AR, on directions from the Bench, had furnished primary
entries for leasing. However, there is no clarity on the same. It is
not clear how the A.O. has arrived at the figure of
Rs.5,89,52,591 to be disallowed in the current year and how it
pertains to the future lease rentals. Therefore, in the interest of
justice and equity, we restore the issue of taxation of future
lease rentals (also raised in the ground 13), to the files of the
A.O.
11.5.6 In the result, ground 13 is allowed for statistical
purposes.
Deputy Commissioner Of Income Tax ... vs M/S Total Environment Building Systems ... on 29 June, 2022
CIT v. Punjab Tractors Co-op. Multipurpose Society Ltd. reported in
[1997] 95 Taxman 579 (punj. & Har.)
M/S. Macrotech Developers Ltd (As ... vs Income Tax Officer (It) 3 (2) (2) , Mumbai on 24 January, 2023
"There are express provisions of the IT Act that provide for taxation
of any part of income that accrues or arises or deemed to accrue
or arise in India. When one states accrual of income it is basically
an absolute concept when both the situs and receipt of such
income is within the territories of the country. However it such
conditions are not met fully and completely, then the deeming
concept comes into play. As per previous judicial pronouncement,
it has been clearly established that income can be said to be
received when it reaches the assessee but it can be to have
"accrued" or "arisen" immediately when the right to receive the
said income becomes vested in the assessee. By performing the
functions as envisaged in the agreement, the ETUK has earned
the right to receive the income, thereby attracting the provisions of
section 5 of the Act. It has further been stated vide various judicial
pronouncement including in the case of CIT Vs. Punjab Tractors
Cooperative Multipurpose Society Ltd that in the case of rendering
of services, income would accrue at the time of such rendering of
services. As per the agreement of ETUK is the sole selling and
marketing agent for the assessee, which means ETUK is
rendering the service of selling which has enabled him to earn the
right to receive the income from ET India, ie the assessee. Since
such receipts situs/origin in Indio, this portion of income liable to
be taxed in India. It shall not out of place to mention that the place
of accrual of income is the place where right to receive that income
arises with the corresponding liability of the prayer to make the
payment of the same there. The assessee's statement that since
P a g e | 20
4 Appeals
ITO (IT)-3(2)(2) Vs. M/s Macrotech Developer Ltd.
M/S. Macrotech Developers Ltd (As ... vs Income Tax Officer (It) 3(2) (2) , Mumbai on 24 January, 2023
said income becomes vested in the assessee. By performing the
functions as envisaged in the agreement, the ETUK has earned
the right to receive the income, thereby attracting the provisions of
section 5 of the Act. It has further been stated vide various judicial
pronouncement including in the case of CIT Vs. Punjab Tractors
Cooperative Multipurpose Society Ltd that in the case of rendering
of services, income would accrue at the time of such rendering of
services. As per the agreement of ETUK is the sole selling and
marketing agent for the assessee, which means ETUK is
rendering the service of selling which has enabled him to earn the
right to receive the income from ET India, ie the assessee. Since
such receipts situs/origin in Indio, this portion of income liable to
be taxed in India. It shall not out of place to mention that the place
of accrual of income is the place where right to receive that income
arises with the corresponding liability of the prayer to make the
payment of the same there. The assessee's statement that since
no operation/business are carried out in the taxable territories of
India then the income accruing abroad through on any business
connection in India cannot be deemed to accrue or arising in India,
does not hold any water as the source of such income arising to
ETUK is its business connection with the assessee company in
India Le. the source is situate wholly and completely within
territories of India. Another contention of the assessee regarding
that that this commission payment is remitted directly to ETUK
and is therefore not received in India is also not tenable since
receipt and right to receive are two distinct concepts both of which
cannot be used interchangeably Here the ETUK may not have
received the amount in India but due to its business connection in
Indio, ETUK has earned the right to receive this income "deemed
to accrue" and thereby becoming liable to be taxed in India of the
portion that accrues or arises in India." (emphasis supplied)
New Holland Tractors (India) (P.) Ltd. vs Joint Commissioner Of Income-Tax on 12 November, 2001
11. The case law relied on by the assessee's counsel are distinguishable. Heavy reliance was placed on the decision of Punjab and Haryana High Court in the case of Punjab Tractors Co-operative Multipurpose Society Ltd., (supra). In that case the facts were as follows :
Asstt. Cit, Central Circle 1, Ernakulam vs Popular Vehicles & Services Ltd. on 25 April, 2005
2.2 Coming to the amount of Rs. 5,54,897 it was submitted that the amount represents unadjusted advances received towards service charges and other items of work from customers in respect of their vehicles. The appropriation of the advances received towards charges of the assessee takes place only when the decision of the principals with regard to warranty claims of the customers are intimated to the assessee. In the case of Principals like Maruthi Udyog, there is always a delay and their responses with regard to the warranty claims are invariably received late. It was, therefore, submitted that in respect of other creditors also, subsequent to this assessment year did an exercise similar to that done in the case of sundry creditors and on that basis of such analysis a sum of'Rs. 2,44,276 has been identified as credit balances in respect of which the liabilities have ceased to exist. It was further submitted that when the assessee itself is making an attempt to identify the amount in respect of which the liability ceased and in fact written back substantial amount, it was not correct on the part of the assessing officer to come to the conclusion that the entire amount shown in the sundry creditors and other creditors should be treated as assessee's income on the ground that these amounts were outstanding for a longer time. The assessee also relied on the decision in the case of CIT v. Punjab Tractors Co-op. Multipurpose Society Ltd. (1998) 234 ITR 105 (P&H).
Deputy Commissioner Of Income Tax vs Ardeshi B. Cursetjee And Sons Ltd. on 31 March, 2008
21. We have heard the rival submissions and have gone through the records. The question of deduction of payment of tax arises when the payable amount was chargeable to tax in India. Whether the commission paid by the appellant to the foreign agent is chargeable to tax in India in the hands of the recipient has to be examined with reference to the provisions of Section 5 and Section 9 of the Act. According to the provisions of Section 5, the total income of a non-resident includes all income from whatever source derived which (a) is received or is deemed to be received in India, or (b) accrues or arises or is deemed to accrue or arise to him in India. As the recipient company, ABC, DSL is a non-resident, and the commission was paid to them by the appellant outside India for services rendered outside India, neither any income was received or deemed to be received in India by ABC DSL, nor any income accrued or arose to them in India. The Hon'ble Punjab & Haryana High Court held in the case of CIT v. Punjab Tractors Co-operative Multipurpose Society Ltd. (1997) 142 CTR (P&H) 20 : (1997) 95 Taxman 579 (P&H) that in the case of rendering of service income would accrue at the time of such rendering of service.