TaxTMI 
TaxTMI 
2014 (3) TMI 613
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....e ground No.1 is dismissed. Ground Nos. 2 & 3 relate to the disallowance made u/s 40(a)(ia) of the Act. Ground Nos. 4 & 5 relates to disallowance of rebate and discount. Ground Nos. 6 to 8 relates to disallowance of interest as not relating to the business. 3. We shall proceed to deal with the case, issue-wise as under: Disallowance u/s 40(a)(ia) of the Act (Ground Nos. 2 & 3): 4. The grounds raised by the Revenue relating to the above issue namely Ground Nos. 2 & 3 read as follows: "2. The learned CIT (A) has erred in deleting the addition to the extent of Rs.44,86,296/- made by the Assessing Officer u/s 40(a)(ia). 3. The learned CIT (A) has erred in not appreciating the fact that the assessee had not furnished details and e....
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....covered by section 194C. The learned DCIT has disallowed the processing charges Rs.13,95,201/-. Appellant admits that payments relate to embroidery charges paid and TDS is not deducted. However, appellant submits work of embroidery includes the labour and material purchased by the parties. Work of embroidery of goods to the required specification is not defined in the definition of 'work' under Explanation to 194C. However, clause (e) to Explanation to 194C is introduced from 1.4.2009. In this behalf it is submited that the clause (e) was not on the statute book during the year F.Y 2007-08. It has been introduced during the year F.Y 2007-08. In other words, the 'work of manufacturing and supplying the product to the requireme....
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....- comprising transaction from M/s Ratiram Ramvinod Sarees (P) Ltd for Rs.41,77,206/-, from M/s.Shankar Selection (P) Ltd for Rs.21,430/- and from M/s.Roop Ranjan, Ahmedabad for Rs.2,87,668/- are inter-state purchases. I have verified from the bills produced for verification and also confirmations from the concerned parties that these are inter-state purchases and cannot be claimed as embroidery charges and therefore, section 194C is not applicable. 3.5 As regard the balance sum of Rs.3,99,290/- the appellant has not been able to substantiate that these amounts are purchases and not liable for TDS and has, therefore, agreed to the disallowance of the same. Therefore, disallowance to the extent of Rs.3,99,290/- is upheld. As the sum of Rs.....
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....The CIT (A) came to the above conclusion, after verifying the purchase bills and also the confirmations from the concerned parties that these sales were inter-state purchases. A sum of Rs.44,85,686/- comprising of purchase by the assessee from M/s. Ratiram Ramvinod Sarees (P) Ltd, for Rs.41,77,206/- from Shankar Selection (P) Ltd, for Rs.21,430/- and from M/s Roop Ranjan, Ahmedabad for Rs.2,87,668/- are nothing, but inter-state purchases affected by the assessee. The finding of the learned CIT (A) has not been dispelled by the Revenue in any manner whatsoever and hence we confirm the stand taken by her. 4.6 Hence Ground Nos. 2 and 3 raised by the Revenue are rejected. Disallowance of Rebate/Discount (Ground Nos. 4 & 5): 5. The grou....
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....d by the appellant, these are accounted for on the basis of sale bills and reflected in each party's account. Therefore, the disallowance made is uncalled for and the same is deleted". 5.3 Revenue being aggrieved is in appeal before us. Both the learned DR and AR were duly hard. 5.4 We have heard the rival submissions and perused the material on record. Discount and rebate are common in this line of business. Assessing Officer has not doubted the genuineness of the rebate and discount. Assessing Officer made an adhoc disallowance of discount and rebate of a sum exceeding 4% of discount granted in a sale invoice. The CIT (A) after examining the accounts of the assessee had held that the discounts are accounted on the basis of sale ....
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....e same. 6.2 On appeal before the CIT (A), the assessee raised the following contentions: "No interest is paid to Trade Creditors of Rs.1,28,02,067/-. And hence the contention that it is to be reduced from business assets is untenable. Trade creditors of Rs.1,28,02,067/- have not been paid any interest and hence no expenditure on this amount is incurred. The question u/s 14A of the Act whether loans on which interest is paid is utilised in business investment or diverted for earning exempted income. Further, the appellants investment in immovable property of Rs.1,54,44,700/- and in land at Gandhakavalu and Rs.20,17,500/- are for land development business purpose. Investment in these lands is not for earning exempted income. Hence there....