2014 (9) TMI 928

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....ax paid at USA without appreciating the fact that the assessee has admitted that its office at USA was treated as a Permanent establishment as per American Tax laws and taxes-were paid on its profit there and thus carrying of expenses relating thereto to India for computing profit as per Indian Income Tax Law was not correct. 2. The CIT(A) has erred in law and on facts in restricting the disallowance up to 50% of the total electricity expenses of Rs. 3,98,735/- without appreciating the fact that such expenditure was not incurred wholly for the purpose of business and there exists an element of use of electricity for purposes other than business. 3. The order of the CIT (A), Kanpur being erroneous, unjust and bad in law be vacated and ....

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....r and also occupied about 40% space on the first floor for the purpose of office and storage. Thus, more than 70% of the whole premises is used for the business office etc. Therefore, the entire disallowance of the electricity charges cannot be made. The CIT(A) re-examined the entire issue in the light of above facts and came to the conclusion that the entire premises were used by the registered office of the assessee company and as residence of the Directors. He accordingly restricted the disallowance to 50% of the total claim. 9. Against the allowance of 50%, the Revenue is in appeal. Since the learned D.R. could not raise plausible arguments in support of his contention, the entire claim of the electricity charges cannot be disallowed....

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....and judicial pronouncements and came to the conclusion that there is no dispute to the ownership, user and payment of tax relating to the warehouse in question. It is also an admitted fact that the consolidated books of account were prepared and no separate books were maintained for the activities carried on in U.S.A. If the income from operations in abroad is included in the profit and loss accounts, the expenditure has to be allowed as per matching principle. Accordingly the CIT(A) has allowed the relief to the assessee. 11. Now the Revenue is before us and placed reliance upon the order of Assessing Officer whereas the assessee has strongly contended that when the income earned abroad is taxable in India, the expenditure incurred in e....