TaxTMI 
TaxTMI 
2013 (10) TMI 605
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....ly for the purpose of business. 3. On the facts and in the circumstances of the case, Ld. CIT(A) erred in deleting the disallowance of Rs.1,53,786/- made on account of foreign travel, without appreciating the fact that the assessee during the course of assessment proceedings failed to prove that the expenses were incurred wholly and exclusively for the purpose of business. 4. The Appellant prays that the order of CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. 5. The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 2. Assessee-company, engaged in the business of manufacturing and exporting of Indian Condiments, filed its return of income on 10-10-2005 declaring total income at Rs.26.89 Lakhs. Assessment was finalised u/s. 143(3) of the Income Tax Act, 1961 (Act) by the AO on 29-11-2007 determining total income at Rs. 38.56 Lakhs. 2. First Ground of Appeal is about dis-allowance of following expenses u/s. 40(a)(ia) aggregating to Rs. 8,57,631/- for non-deduction of Tax Deducted at Source (TDS) with regard to the following items: ....
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....xpenditure, He directed the AO to delete the addition. 2.2.Before us, Departmental Representative (DR) submitted that FAA had not dealt the contents of printing material, that TDS had to be deducted for the work done by the printer and supplier of mango slices, that in the bills of the supplier of mangoes, commission has been charged, that work done by both the parties was work contract. Authorised Representative (AR) submitted that the printer had printed stickers only, that it was sale contract and not work contract, that M/s. Jayant Printary had sold the assessee stickers to be used by it, that it was not a work contract. He referred to Pg. Nos. 1 - 5 of the Paper Book (PB).He relied upon the case of Glenmark Pharmaceuti -cals Ltd.(324 ITR 199). 2.2.1.With regard to payment of supplier of mango slices he referred to page No. 13 of the PB.He submitted that the supplier was supplying mangoes to the assessee, that invoices were broken into various components, that the contract between the parties were for supply of mango slices, that provisions of Section 194/194H were not applicable in the case under consideration. He relied upon the case of Commissioner of Income-tax (TDS) ....
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....s significant is that in using the words which clause (e) uses in the Explanation, Parliament has taken note of the position that was reflected in the circulars issued by the Central Board of Direct Taxes since May 29, 1972. The Revenue always understood section 194C to mean that where a product or thing is manufactured to the specifications of a customer, the agreement would constitute a contract for sale, if (i) the property in the article or thing passes to the customer upon delivery ;and (ii) the material that was required was not sourced from the customer/purchaser, but was independently obtained by the manufacturer from a person other than the customer. The Legislature which intends to bring clarity to a legislative provision or to remove an ambiguity is inferred to do so at the inception." Respectfully following the above, we are of the opinion that tax was not to be deducted by the assessee-company for printing the labels. First part of the Ground No.1 is decided against the AO. 2.4.Second limb of the Ground of Appeal No.1 is about non-deduction of tax with regard to supply of mango slices,as stated earlier. It is found that HAKAMC used to supply mango slices to the a....
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....that assessee had failed to produce any evidence proving that expenses were incurred wholly and exclusively for the purpose of business.As a result, an addition of Rs. 1.31 Lakhs under the head 'Amount spent through Credit Cards' was made to the total income of the assessee. 3.1.Assessee preferred an appeal before the FAA. After considering the submissions of the assessee and the Assessment Order, he held that the Directors were holding Credit Cards in their personal names, that whatever expenses had been incurred on Credit Cards issued by the company was allowable expenditure. 3.2.Before us, DR submitted that assessee had not produced any evidence of incurring the expenditure for the business purpose, that details of Entertainment Expenditure were not produced before the AO.AR submitted that Credit Cards used by the Directors were the Corporate Credit Cards issued by the company, that details were furnished during the assessment proceedings, that order u/s. 143(3) of the Act were passed in the earlier and subsequent AYs, that in the said orders no addition on account of expenditure incurred through Credit Cards was made, that Credit Cards were not used for personal use of th....