McNally Sayaji Engineering Limited v. Deputy Commissioner of Income Tax

Parties Involved

Facts Summary

McNally Sayaji Engineering Limited, a manufacturer of heavy equipment, filed appeals against orders passed by the Commissioner of Income Tax (Appeals) for the assessment years 2009-10 and 2013-14. The assessee challenged disallowances and other issues related to tax deductions and provisions. During the pendency of these appeals, the assessee company approached the National Company Law Tribunal (NCLT) for initiation of Corporate Insolvency Resolution Process and was acquired by Tega Group. The Tribunal examined the insolvency proceedings and the approved resolution plan, which extinguished all claims prior to the approval date.…

Legal Issues

• 1. Disallowance of management service fee and royalty
• 2. Interest under section 234C
• 3. Disallowance of provision for freight charges
• 4. Disallowance of loss order provision under miscellaneous expenses
• 5. Disallowance of advisory fee for sale of land
• 6. Initiation of penalty proceedings under section 271(1)(c)

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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