AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 45
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....orities by the assessee, but it is the contention of the assessee that since such remittances have been made before the filing of the return of income, it is an allowable expenditure and no addition is called for. In support of this contention, reliance is placed on the following decisions- (a) ACIT V/s. Shakti Bhog Foods Pvt. Ltd. (ITA No.2777 to 2781/Del/2010) (b) ACIT V/s. Ranbaxy Laboratories limited (ITA No.3599/Del/2009 (c) CIT V/s. Sabari Enterprises (298 IUTR 141)-Kar. (d) CIT V/s. AIMIL Ltd. (1887 Taxman 265)-Del. 4. On careful consideration of the rival submissions on this issue, we find that the issue under consideration, is covered in favour of the assessee by the decision of the Karnataka High Court in CIT V/s. Sabari Enterprises and of the Delhi High Court in the case of AIMIL Ltd. (supra). The Hon'ble Karnataka High Court in the case of Sabari Enterprises (supra), has dealt with this issue and decided the same in favour of the assessee in the following manner- "7. After hearing the learned Counsel for the parties, we have carefully examined the above statutory provisions of the Act including definition of Section 2(24)(x) and Sections 36(1)(va) and 43B(b), ....
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....ribution paid can be claimed by the assessee. The Explanation Clause (va) of Section 36 of the Income Tax Act further makes it very clear that the amount actually paid by the assessee on or before the due date applicable in this case at the time of submitting returns of income under Section 139 of the Act to the revenue in respect of the previous year can be claimed by the assessees for deduction out of their gross income. The abovesaid statutory provisions of the Income Tax Act abundantly make it clear that, the contention urged on behalf of the revenue that deduction from out of gross income for payment of tax at the time of submission of returns under Section 139 is permissible only if statutory liability of payment of PF or other contribution funds referred to in Clause (b) are paid within the due date under the respective statutory enactments by the assessees as contended by the learned Counsel for the revenue is not tenable in law and, therefore, the same cannot be accepted by us. 8. The learned Counsel Sri Parthasarathy and Dr. Krishna, appearing for respondents, also drew our attention to the deletion of second proviso to Section 43B of the Income Tax Act by Finance Act, 2....
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.... assessee failed to furnish even the invoices raised by the foreign entities in order to verify the services rendered by them and the genuineness of the claim made by the assessee. Even though the AO has made addition by invoking Sec.14A by treating these expenses as linking them with exempted income, the basic requirement for allowing such deduction has not been fulfilled by the assessee. We do not agree with the contention of the Assessing Officer to bring these professional charges under the purview of S.14A in the absence of any income which does not form part of total income of the assessee. Provisions of Sec.14A can be invoked in a case where any assessee having any income which do not form part of total income. There is no such income in the hands of the assessee in the current financial year. The Assessing Officer proceeded on the lines that as the assessee invested in equity which yields exempted dividend income and no expenditure is to be allowed by virtue of sec.14A. On the other hand, there is no dividend income declared by the assessee as the equity is in respect of foreign subsidiaries and the profits are includible in the total income of the assessee. Therefore, disa....
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....ced reliance on the decision of the Mumbai Bench 'D' of the Tribunal in the case of Dredging International N.V., Mumbai V/s. Asstt. Director of Income-tax(International Taxation)-1(2), Mumbai (ITA No.8035/Mum/2010 for assessment year 2006-07, duly furnishing a copy thereof before us. 9. The Learned Departmental Representative on the other hand, strongly supported the orders of the Revenue authorities. 10. We heard both sides and perused the orders of the Revenue authorities and other material available on record. It is an undisputed fact that the Assessing Officer in the draft assessment order made the addition of Rs.3,28,24,150, invoking the provisions of S.14A of the Act. While the DRP by the impugned order has not approved the disallowance made by the Assessing Officer invoking the provisions of S.14A, it directed such disallowance on the ground that the assessee failed to substantiate the nature and genuineness of the professional services received by the assessee so as to warrant such a huge amount of expenditure. The point of dispute raised by the assessee before us, is that once the DRP adjudicated on the point arising out of the draft assessment, viz. permissibili....
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....ssessee in this appeal relates to addition of Rs.33,77,101 made by the Assessing Officer on account of professional charges, invoking the provisions of S.40(a)(ia) of the Act. 13. During the financial year 2007-08, relevant to the assessment year under appeal, assessee has paid the following amounts by way of professional charges- Sree Software Solutions Rs.28,25,902 Ad Astra Media Rs. 3,00,000 M. Bhaskar Rs. 1,80,000 Venture Creating Careers Rs. 40,300 American Quality Accessories(India) P. Ltd. Rs. 30,899 Total Rs.33,77,101 The Assessing Officer disallowed the above expenditure in terms of S.40a(ia) of the Act on the ground that the above amounts have been paid without complying with the provisions of TDS. The assessee contended before the Dispute Resolution Panel that the amount can be disallowed under the provisions of S.40(a)(ia) only in the cases where the amount of expenditure/TDS shown as payable, whereas in the present case of the assessee, the amount is shown as paid and hence cannot be disallowed. The DRP, though observed that the issue is covered in favour of the assessee by the decision of Visakahapatnam Bench of the Tribunal in the case of Merlyn....
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....e assessee in ground No.5 that while calculating the profits of the undertaking for the purpose deductions under S.10A of the Act, the Assessing Officer has made depreciation adjustment to the profit as per Profit & Loss Account, i.e. added back the depreciation as per Companies Act and deducted the depreciation as per the IT Act, 1961 from the profit as per Profit & Loss Account. It is contended that in the draft assessment order, the Assessing Officer has not added the depreciation as per Companies Act and deductee the depreciation as per the Income Tax Act, 1961 and while passing the assessment order, the Assessing Officer has taken different interpretation and depreciation adjustment was made to the profit as per the Profit & Loss Account while calculating the claim under S.10A, which is mere change of opinion and which is not correct and not justified. According to the assessee, as stated in ground No.7, this adjustment made by the Assessing Officer is not in accordance with the direction of the DRP. It is further stated in ground No.8 that when there is no specific direction given by the DRP in respect of any particular addition/disallowance, the Assessing Officer cannot make....
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....stricted general meaning given to eligible profits as derived from the export of articles in sub-section (1) has been given a go by in subs-section (4) and the scope of the benefit has been expanded by extending to the all profits of the business carried on by the undertaking. Once the expression 'derived from' having restricted scope has been specifically defined in the same section, then the meaning of such expression as understood in common parlance will not be applicable. Rather the specific meaning given to it will come into play. We further note that sub- section (4) has been worded on the pattern of section 80-IA, prior to its substitution with effect from 1.4.2000, which referred to 'profits and gains derived from any business of an industrial undertaking'. In the context of section 80IA, the Amritsar Bench of the Tribunal in the case of Dy.CIT V/s. Chaman Lal & Sons (2005) 3 SOT 333 (Asr) to which one of us, namely the AM is party) held that in such a worded section, the benefit of deduction has to be made available in respect of purchase and sale which was part and parcel of the business of the industrial undertaking. Thus when sub-section (1) of section 1....