TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 49
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....eclaring a loss of Rs. 58,50,006/-. The case was processed u/s. 143(1) of the Income Tax Act, 1961 (herein after 'the Act') on 06.06.2002. The case was later selected for scrutiny and the notice u/s. 143(2) of the Act dated 28.10.2002 was served on the assessee on 29.10.2002. After considering the submissions by the AR of the assessee, the AO completed the assessment u/s. 143(3) of the Act vide his order dated 29.3.2004 and made various additions. 3. Being aggrieved with the assessment order dated 29.3.2004, assessee appealed before the Ld. CIT(A), who vide impugned order dated 21.2.2011 has deleted the addition by partly allowing the appeal of the Assessee. 4. Now the Revenue is aggrieved against the impugned order and filed the present appeal before the Tribunal. 5. At the time of hearing Ld. CIT DR Sh. R. S. Gill relied upon the order of the AO and reiterated the contentions raised by the Revenue in the grounds of appeal and stated that the Appeal of the Revenue may be allowed. 6. On the other hand Ld. AR of the assessee Sh. Pradeep Dinodia relied upon the order of the Ld. CIT(A) and stated that the same may be upheld. 7. We have heard both the parties and perused and consi....
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....in the normal course of business of the assessee company. And these are not diversification of interest bearing funds to sister concern without interest. And the ld CIT(A) has rightly noted that the recovery through ISPL is done in the normal course and, therefore, no notional interest, whatsoever, should have been calculated thereon for disallowance. We find that the assessee had submitted before the Ld. CIT(A) that no nexus has been established by the AO between the interest bearing funds used for non business purposes or diverted to associate concern, without interest and has relied on CIT vs. Dalmia Cement Pvt Ltd. 121 Taxman 706 (Del), Madhav Prasad Jatia vs. CIT 118 ITR 200 (SC), CIT vs. Sahni Silk Mills Pvt. Ltd. (2002) 253 ITR 294 (Del.), CIT vs. Orissa Cement (2003) 260 ITR 626 (Del), CIT vs. Tin Box Company (2009) 260 ITR 637 (Del.), 8. We find that the advances were made by the assessee during the regular course of business. And the advances were in the nature of credit facilities and the impugned advances were in the nature of the business advances and were not bearing any interest. The AO had disallowed the interest on notional basis only. We find that ld. CIT(A) has ....
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....d movable and tangible assets of SISL vide agreement dated 25.11.1998 for a consideration of Rs. 3.5 crores and immoveable properties vide agreement dated 02.03.1999 for a consideration of Rs. 6 crores. The rights in GEEP brand was acquired by M/s. Wilkinson Sword India Ltd., a group concern of the assessee vide agreement dated 25.11.1998 for a consideration of Rs. 55 crores. The assessee was manufacturing GEEP brand products for Wilkinson Sword. It entered into an agreement with SISL on 10.4.2000.The assessee claimed expenditure of an amount of Rs. 13,57,45,000/- on account of payment of "Technical advisory Fees" to M/s Shervani Industrial Syndicate (SSIL). According to the AO the assessee has not been able to bring anything to the record to prove that the above company has rendered any services. 14. In view of the above observations the AO has held that the onus was on the appellant to prove the claim of expenditure and since the appellant had failed to provide any evidences regarding the receiving of technical advisory services, the expenditure on technical advisory fees claimed by the appellant was disallowed vide his order dated 29.03.2004. 15. Being aggrieved with the asses....
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....h payment had been made. The AO had clearly brought on record after examining the agreement that no services had been rendered by M/s SSIL to the assessee. We also find that during the appellate proceedings also no evidence have been brought on record by the assessee regarding the nature of services provided for which the payment had been made. Hence, ld CIT(A) has rightly observed that the onus is on the assessee to substantiate on the basis of evidences regarding business expenditure which has been claimed u/s 37(1). This onus has not been discharged by the assessee. We note that ld CIT(A) has rightly held that in the absence of any evidences on record regarding the nature of services provided for which the above expenditure has been incurred, the disallowance made by the AO is as per law, hence, the ld CIT(A) has rightly dismissed this ground of appeal. In view of the above we are of the view that no interference is called for in the impugned order passed by the ld CIT(A), hence we uphold the same by rejecting this ground of appeal as raised by the assessee in respect of "Technical Advisory Fees" which amounts to Rs. 7 crores and we confirm disallowance of Rs. 7 crores because a....
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....ical know-how and technical assistance in respect of manufacture of "No Mercury Added" R20 batteries. It is agreed that SISL' s assistance in this regard will include the following: a. To advise GDOL to upgrade modify the manufacturing processes to enable the Factory to produce "No Mercury Added" R20 batteries. b. To provide specifications for the manufacture and development of new product for developing a "No Mercury Added" product for R20 batteries. c. To advise on all miscellaneous issues arising from the aforementioned process." 24. From a perusal of the above agreement between the assessee and the M/s. SSIL which is in conjunction with agreement dated 04.01.2001 which terms and conditions as stated above are akin to that of agreement dated 10.04.2000 reproduced above. We find that vide the agreement dated 15.02.2001 read with 04.01.2001, M/s. SSIL has agreed to assessee that it will provide "Technical know-how" and Technical Assistance in respect of manufacture of "No Mercury Added, R-20 Batteries" as per clause 2 of the Supplementary Agreement. Similarly we find that in Page39 of PB, i.e. while defining the products in 04.01.2001 agreement M/s. SISL has specifically a....
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....y the excise authority related to a different company M/s Rialto Enterprises Pvt. Ltd. These facts are also proved by the company of excise challan which is in the name of M/s Rialto Enterprise Pvt. Ltd. Moreover, the copy of the agreement which was submitted by M/s Rialto Enterprises Ltd. to the AO it was seen that as per Article 11 and 18 of the agreement, taxes and duties including excise duty on purchase of material and sale of product and other activity was to be borne by M/s Rialto Enterprises Pvt. Ltd.. On the basis of the above agreement, is very much clear that the liability of Rs. 70 lacs on account of excise duty was not of the assessee. Keeping in view of the said agreement, ld. CIT(A) has rightly held that he concurred with the view of the AO that since the liability did not belong to the assessee, hence, the claim of deduction u/s. 43B of Rs. 70 lacs was not allowed, which does not call any interference on our part, hence, we uphold the order of the Ld. CIT(A) on this issue. However, we find force in the contention of the ld AR that the said levy of Rs. 70 lakhs additional Excise Duty was challenged and the same have been refunded back to M/s Rialto which in turn has ....
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.... other hand Ld. Counsel of the assessee relied upon the order of the Ld. CIT(A) and stated that the same may be upheld. 32. We have heard both the Counsel and perused and considered the relevant records available with us, especially the orders passed by the Revenue Authorities and a Paper Book filed by the Assessee containing the cases laws on which the assessee has relied upon; copy of submission made before the CIT; Details of inventory write off and copy of judgment of Delhi High Court in CIT vs. Tupperware India Pvt. Ltd. 2014-TIOL-610-HC-DEL-IT. We find that Ld. First Appellate Authority has observed that the items of inventories written off during the year were originally manufactured / purchased for sale in the ordinary course of business and were held as regular inventory items in the audited statement of accounts. Such write off of damaged / unserviceable items of inventories as per standard policy of the company, were written off and physically destroyed as a regular policy, and such expenses was allowable deduction as revenue expenditure as having been incurred wholly and exclusively for the purpose of business. Ld. Counsel of the assessee further submitted before the L....