TaxTMI 
TaxTMI 
2014 (2) TMI 273
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.... 4. The assessee during the period 1.4.1999 to 31.1.2000 made a payment of US$ 278885.75 to Master Card International which comes to Rs.119.47 lacs in Indian rupee. The said payment was made without deduction of tax at source. The AO considering the provisions of section 40(a)(i) of the Income tax Act, disallowed the claim of the assessee. Being aggrieved, assessee filed appeal before the first appellate authority. 5. On behalf of assessee, it was contended that provisions of section 40(a)(i) are not applicable as the amount of license fee paid to Master Card is not payment of royalty as per section 9(1)(vi) and Article 12 of DTAA agreement. It was further submitted that the activities of Master card are carried out in India. Hence, there is no question of deducting tax. Ld CIT(A) vide para 14 confirmed the action of AO by following the ITAT order in assessee's own case in earlier years. Hence, this appeal by the assessee. 6. At the time of hearing, ld A.R. fairly conceded that above issue is covered against the assessee in assessee's own case for assessment years 1996-97 in I.T.A. No.2223/M/2000 and in A.Y. 1998-99 in I.T.A. No.4579/M/2003 by a common order dated 27.3.200....
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....t feel it necessary to restore the matter. This ground of the assessee is rejected." 7. However, ld A.R. submitted that the payer had paid the taxes and accordingly, deduction should be allowed to the assessee subject to verification. Ld D.R. submitted that no evidences have been filed by the assessee that amount has been paid by the payee and, therefore, order of ld CIT(A) be confirmed. 8. Considering above submissions of ld representatives of parties and the earlier orders of the Tribunal in assessee's own case for assessment years 1996-97, 1998-99 and 1999-2000(supra) and also in the absence of any evidence on record that payee has paid the taxes on the amount paid by the assessee as fee to Master Card, we do not find any reason to interfere with the order of ld CIT(A). Hence, Ground No.1 of appeal is rejected. 9. Ground Nos.2 & 3 are as under: "2. On the facts and in the circumstances of the case and in law, the learned AO has erred in disallowing the losses incurred of Rs.17,21,15,970 and the learned CIT (A) has erred in setting aside this issue to the AO with a direction to allow the claim after verification. The learned AO be directed to allow the deduction for l....
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....al before the Tribunal. 14. During the course of hearing, ld A.R. referred to pages 22-34 of PB and submitted that assessee had paid taxes relating to New York and Tokyo Branch and had claimed deduction on the basis of actual payment. He submitted that claim made by the assessee should be allowed. 15. On the other hand, ld D.R. submitted that ld CIT(A) has given direction to the AO to verify the claim and allow the claim on the basis of actual payment in respect of taxes paid relating to assessee's New York and Tokyo Branch and hence, there is no grievance of the assessee. 16. We agree with ld D.R. that assessee should have no grievance against the order of ld CIT(A) as ld CIT(A) has directed the AO to allow claim of the assessee on the basis of actual payment in respect of taxes paid relating to assessee's New York and Tokyo Branch after verification. Hence, Ground No.4 of appeal is rejected. 16. Ground No.5 of appeal reads as under: "5. On the facts and in the circumstances of the case and in law, the learned AO has erred in disallowing expenses of Rs.13,18,63,913 u/s 14A being expenses incurred in relation to exempt income and [earned CIT(A) has erred in disallowi....
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....is in further appeal before the Tribunal. 20. During the course of hearing, ld A.R. referred ITAT order in assessee's own case for assessment year 1999-2000 I T.A. No. 4580/M/2003 dated 30.11.2010 (supra) and submitted that the Tribunal restored the matter on the above issue to the file of AO with a direction to reexamine the issue to decide the disallowance to be made. Ld A.R. further referred page 69 of PB and submitted that the disallowance @ 0.5% of the average investment comes to Rs.2.1221 crore. However, ld D.R. submitted that ld CIT(A) has only given the direction to the AO to make disallowance @ 0.5% of the average investment. He submitted that similar issue has recently been considered by the Tribunal in assessee's own case for assessment year 2003-04 being I.T.A. No.2781/M/2011 vide order dated 15.6.2012 and the Tribunal after considering submissions of the parties vide paras 10 & 11 of the order have restored the matter to the file of AO with a direction that reasonable disallowance u/s.14A may be arrived at as per law and taking into consideration the direction given in various decisions of the coordinate benches of the Tribunal. The said paras 10 & 11 of order of th....
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....tment should be disallowed towards expenses on account of earning of exempt income. Since similar issue was considered by the Tribunal in assessee's appeal for assessment year 2003-04(supra) and the Tribunal restored the matter to the file of AO with a direction that a reasonable disallowance u/s.14A may be arrived at, as per law and taking into consideration the directions given in various benches of the coordinate benches of the Tribunal, we consider it prudent to restore this issue to the file of AO with a direction to make reasonable disallowance u/s.14A as per law and taking into consideration the details as may be filed by the assessee and the decisions of the coordinate benches that may be relied upon before him. Accordingly, we set aside the order of ld CIT(A) and restore the issue to the file of AO by allowing ground of appeal No.5 taken by the assessee for statistical purposes. 22. Ground No.6 of appeal reads as under: "6. On the facts and in the circumstances of the case and in law, the learned AO has erred in disallowing fees paid to Master Card International of Rs. 98,18,000 and the learned CIT (A) erred in setting aside this issue to the learned AO with a direct....
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....or. Before we part with this ground, we observe that in the statement of facts and also at page 75 of PB, assessee has stated the total amount of Rs.96,18,000 but in the order of ld CIT(A) in para 33 and also in the ground of appeal taken, the amount mentioned is Rs.98,18,000. We direct that assessee will state the correct amount to the AO at the time when AO give effect to this order. Ground No.6 of appeal is rejected subject to above direction. 25. Assessee has also taken additional ground as under: "On the facts and in the circumstances of the case and in law, the appellant bank prays that while computing the total income, the provisions of Minimum Alternate Tax (MAT) u/s.115JA be not applied to the bank and ld AO be directed to compute total income as per the normal provisions of the Income tax Act, 1961." 26. At the time of hearing, ld A.R. submitted that income of the assessee be assessed as per normal provisions in stead of computing the total income u/s.115JA of the Act as the income of the assessee will be more under the normal provisions than book profit as per section 115JA after giving effect to the order of ld CIT (A). Ld D.R. submitted that above ground does ....