TaxTMI 
TaxTMI 
TaxTMI 
2013 (7) TMI 252
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.... the assessee has challenged mainly three issues:- (i) In grounds no.1 and 2, the assessee has challenged the validity of re-opening of assessment under section 147. (ii) In ground no.3, the assessee has challenged the disallowance of payment to M/s. J.S. Financial Services; and (iii) In ground no.4, the assessee has challenged the chargeability of interest under section 220(2) of the Act. 2. Firstly, apropos ground no.3, i.e., second issue, the learned Counsel, appearing on behalf of the assessee, at the outset, submitted that the issue of disallowance of expenses being payments made to M/s. J.S. Financial Services for maintaining and running of a branch by treating it to be a joint venture, has come up before the Tribunal in assessee's own case in ITA no.479/Mum./2009, order dated 20th June 2012, for the assessment year 2006-07, wherein this issue has been decided in favour of the assessee. 3. The learned Departmental Representative, on the other hand, conceded that this issue has already been considered by the Tribunal in assessee's own case for assessment year 2006-07. 4. After carefully going through the impugned orders and the decision of the Tribunal in assessee's own ....
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....ch on behalf of the assessee, which had not been done. The AO accordingly disallowed the claim of the assessee. 5.2 The assessee disputed the decision of AO and submitted before CIT(A) that the case of Panipat Woolen and General Mills Company Ltd. (supra) was distinguishable as in that case there was sharing of both profit and loss and other party had made substantial investments. In the present case, all investments were made by the assessee and all policy decisions were taken by the assessee and there was no sharing of losses. Therefore, arrangement could not be called as joint venture. As regards applicability of section 194J, it was submitted that M/s. JSMS which was proprietary concern of K.P. Shroff was assisted by six employees for broking business. Therefore, he was not rendering any managerial services. He was also not rendering any technical services. Therefore, services were not covered by section 194J. Thus, disallowance could not be made under section 40a(ia) on grounds of non deduction of tax at source. CIT(A) however, was not satisfied by the contentions raised. It was observed by him that profit sharing is essential motive in formation of joint ventures and therefo....
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.... by Finance Act 2012 to section 40(a)(ia) w.e.f. 1.4.2013 as per which in case tax had been paid by the payee, it had to be considered as deemed deduction and payment of tax on the day of furnishing of return of income by the payee . It was further argued that the said amendment was clarificatory in nature and would apply to the pending assessments and, therefore, no tax was required to be deducted in case of the assessee, and thus, no disallowance could be made. 5.4 The ld. DR, on the other hand, supported the orders of authorities below and placed reliance on the findings given in the respective orders. 5.5 We have perused the records and considered the rival contentions carefully. The dispute is regarding allowability of claim of deduction of Rs.29.36 lacs on account of share of profit paid to M/s. JSMS for managing the Lokhandawala Branch. Both the authorities below following the judgment of Hon'ble Supreme Court in the case of CIT vs. Panipat Woollen and General Mills Co. Ltd. (103 ITR 66) (supra) have held that arrangement with M/s. JSMS was a joint venture and therefore payment made to M/s. JSMS was not allowable as deduction. However, we are unable to agree with the view ....
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....year also, we set aside the impugned order passed by the Commissioner (Appeals) and the grounds no.3, as raised by the assessee is treated as allowed. 6. In ground no.4, the assessee has challenged levy of interest under section 220(2) of the Act. 7. The learned Counsel submitted that in this case, the Assessing Officer, while giving effect to the Commissioner (Appeals)'s order, has granted refund to the assessee. therefore, there was no occasion to charge interest under section 220(2) from the date of the original demand notice issued after the order passed under section 143(3) of the Act. Learned Departmental Representative, on the other hand, relied upon the findings of the Commissioner (Appeals) on this score. 8. In the present case, the assessment was completed under section 143(3) on 3rd March 2005, on a total income of Rs. 86,92,280, as against the returned income of Rs. 79,44,284. This assessment order was subject matter of first appeal. After giving effect to the Commissioner (Appeals)'s order, some refund was worked out. Thereafter, the assessment has been made again under section 143(3) r/w section 147 of the Act, vide order dated 24th December 2009. In the demand not....