TaxTMI 
TaxTMI 
2014 (6) TMI 671
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....are being disposed of by way of this consolidated order for the sake of convenience. 2. First, we take up the Revenue's appeal in ITA No.2553/Ahd/2013 for AY 2010-11. The Revenue has raised the following grounds of appeal:- 1. The CIT(A) has erred in law and on facts in deleting the disallowance of Rs.2.46 crores made u/s.40(a)(ia) despite the fact that the assessee had not deducted TDS u/s.194H on these payments which were in the nature of commission. 2. The CIT(A) ought to have considered the so called sales incentives/cash discount as commission as envisaged in Explanation (i) to section 194H of the Act. On the fact and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Off....
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....ld.Sr.DR supported the order of the AO and submitted that the ld.CIT(A) was not justified in deleting the addition. On the contrary, ld.counsel for the assessee Shri S.N.Divatia submitted that the issue is covered by the decision of the Coordinate Bench (ITAT "A" Bench Ahmedabad) in assessee's own case in ITA No.1835/Ahd/2011 for AY 2008-09 dated 02/08/2013. The ld.counsel for the assessee has also placed a judgement of Hon'ble Bombay High Court rendered in the case of CIT vs. Intervet India Pvt.Ltd. in Income-tax Appeal No.1616 of 2011, dated 01/04/2014. 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has decided this issue ....
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....the nature of commission or brokerage, within the meaning of section 194H of the Act. We find that a plain reading of provision of section 194H with its Explanation makes it clear that the provision of section 194H shall become applicable when the payment is received by a person who is acting on behalf of another or acting as an agent of another person. The CIT(A) has recorded a finding that a perusal of various terms and conditions of the agreement entered into by "SFPL" with the assessee-firm shows that the distributorship is on principal-to-principal basis and not on principal-agent basis. The Revenue could not controvert this finding recorded by the CIT(A). The CIT(A) has recorded that M/s."SFPL" was selling the goods to the assessee fi....
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....mission liable to TDS under section 194H of the Act, and that provision of section 194H are not at all applicable on the facts of the case, and in deleting the addition under section 40(a)(ia) of the Act. Accordingly, the ground of the appeal of the Revenue being without merit, is dismissed." Respectfully following the said decision, impugned disallowance of sales incentive u/s.40(a)(ia) is deleted. 4.4. Second element of the disallowance is cash discount of Rs.3,96,151/-. In the assessment order, A.O. observed that the cash discount was paid to dealers to whom the sales incentives were paid; since the cash discount was similar in nature to sales incentives, it was being treated as commission and since tax was not deducted on the cash....
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....lowance disallowing interest exp. of Rs.1,04,948 is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld.CIT(A) has grievously erred in law and or on facts in not considering fully and properly the explanations furnished and the evidence produced by the appellant. 2.1 The Ld.CIT(A) has grievously erred in law and on facts in upholding the disallowance of interest exp. of Rs.1,04,948. 2.2. That in the facts and circumstances of the case, the Ld.CIT(A) ought not to have upheld the disallowance of interest exp. of Rs.1,04,948 as non-business purposes. 2.3. Without prejudice to above, the ld.CIT(A) has erred in computing the disallowance of interest at Rs.1,04,948/-. It is therefore prayed that the d....
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....of Rs.2,01,15,717 which far exceed the aforesaid advances. Therefore, in view of the free fund available to the appellant, no disallowance of interest is justified. Refer to Reliance Utilities & Power Ltd. 313 ITR 340 (Bom) & Hutch Essar (78 DTR 7)(Del), Munjal Sales Corpn. (298 ITR 298)(SC), Naval Technoplast Industries Ltd. (Tax Appeal No.1416 of 2011 dt. 24.9.2012 (Guj). Secondly, in case of Smt. Shobhnaben Amin, the AO in Para 9.4 observes that it was an opening debit balance of Rs.11,27,187. The appellant has not charged interest there on and it is not finding of AO in earlier years that the same were given out of interest bearing funds." 7.1. The ld.CIT(A) after considering the submissions has given on finding that the assessee-....