Pr.commissionerof Incometax-2 v. Chl Limited

*IN THE HIGH COURT OF DELHI AT NEW DELHI 32&39 +ITA No. 638/2017 PR.COMMISSIONEROF INCOMETAX-2 Appellant Through: Mr. Zoheb Hossain, Senior StandingCounsel versus CHL LIMITED Through: None Respondent +ITA No. 693/2017 PR. COMMISSIONEROF INCOME TAX-2 Appellant Through: Mr Zoheb Hossain, Senior StandingCounsel versus CHL LIMITED Through: None Respondent CORAM: JUSTICE S. MURALIDHARJUSTICE PRATHIBA M. SINGH ORDER%21.08.2017 1. These appeals are directed by the Revenue against the common orderdated 17'*' February 2017 passed by the Income Tax Appellate Tribunal ITA Nos. 638/2017 & 693/2017 Signature Not Verified Page 1 of3 O/ ('ITAT') in ITA Nos. 4967/Del./2010 and 2801/Del./2010 for theAssessmentYears('AYs')2006-07and 2008-09respectively. 2. Four issues have been urged by the Revenuein both these appeals.Thefirst one concernsthe disallowanceunder Section 14A of the Income TaxAct, 1961 ('Act') read with Rule 8D of the Income Tax Rules, 1962('Rules')regardingexpenditureincurredfor earningexemptedincome.It isnot disputed that the said issue concerningthe failure of the AssessingOfficer( AO') to recorda satisfactionnotestandsansweredin favourof theAssesseeand againstthe Revenueby ofthe decisionofthe SupremeCourtin GodreJ&BoyceMfg. Co Ltdv. DCIT[2017]394ITR449 (SC). 3. On the secondissue concerningthe commissionpaid to the directorsandshareholdersof the company, it was found that, as a matter of fact, thedirectorsin questionwere whole-timedirectors.In answeringthe said issuein favourof the Assessee,the ITAT reliedon its own earlierdecisiondated2f^ January2011 in the caseofCITv. BonyPolymersPvt Ltd.,whichhasbeen confirmedby this Court vide order dated 18*^ January2012 passed inCIT V. Bony PolymersPvt Ltd (ITA No. 995/2011). Consequently,theCourtis not inclinedto frame any questionon this issue. 4. The third issue concerns the expenses incurred on training which,accordingto the AO, shouldbe amortizedover4to 5yearsand be treatedascapitalexpenditure.The learnedITAT reversedthe said findingby holdingthat the said issue stands covered the decisionsofthis Court in CIT v. bySamsungIndiaElectronicsLtd [2013]356ITR 354 (Del) and OmniglobeInformation Tech India Pvt. Ltd v. CIT [2014] 369 ITR 1 (Del). ITA Nos. 638/2017&693/2017 ^o/j Consequently, on this issue as well, the Court is not inclined to frame anyquestion. 5. The fourthissueconcernsthe intereston borrowedfundswhich wasrouted as interest free loans to the sister concerns. The ITAT has, in theimpugned order, placed reliance on the decision of this Court in CIT v.Monnet Industries Ltd. [2011] 332ITR 627 (Del). The Court is not inclinedto take a different view in the matter. Consequently,no substantialquestionof law arises on this issue as well. 6. The appeals are accordinglydismissedbut, in the circumstances,with noorders as to costs. LIDHAR, J. AUGUST 21, 2017rd PRATHIBA M. SINGH, J. ITA Nos. 638/2017 & 693/2017