TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 219
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....on facts in confirming action of AO in not granting deduction of Rs. 1, 45, 04,757/- commission on performance guarantee claimed during the assessment proceedings as per the agreement. Ld. CIT (A) ought to have allowed the deduction claimed, (b) Ld. CIT (A) further erred in law and on fact in confirming action of AO in not granting deduction of Rs. 3,20,07,330/- commission paid on purchases claimed during the assessment proceedings. Ld. CIT (A) ought to have deleted such disallowance as the expenses incurred wholly and exclusively for the purpose of business is an allowable expense. 3. & 4 Explanatory in support of Ground # 2(a) & 2(b) 5. Ld. CIT (A) erred in confirming action of AO disallowing the claim of business expenditure made in absence of filing Revised Return of Income. Ld. CIT (A) ought to have accepted the claim made during the assessment proceedings of genuine & legitimate expenses. 6. Ld. CIT (A) erred in law and on fact in confirming action of AO in making addition of Rs. 1, 11, 330/- towards the purchase commission for the typographical error ignoring the submissions & details on record. 3. Ground No.1 is general in nature. Ground Nos.2 to 6 are interconnec....
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....assessee at page A-47 has given the details of purchase expenses breakup according to which the commission on corporate given to supplier is shown as per statement. However, the amount of commission on purchase is stated at Rs. 3,20,07,330/- against the purchase commission added back in the statement at Rs. 3,18,96,000/-. From time and again during the course of assessment proceedings the assessee was requested to explain the difference of Rs. 1,11,330/-. In response to this specific request, the assessee vide at Point No.1 submission dated 7/11/06 has corrected the mistake and agreed that the correct amount is Rs. 3,20,07,330/-. The difference amount of Rs. 1,11,330/- is therefore added to the total income of the assessee." 6.1. On appeal to the ld.CIT(A), the ld.CIT(A) dismissed the appeal by observing as under:- "6. On consideration of the above facts of the case and the submissions of the ld.A.R. as the appellant has not filed revised return claiming the above expenses and has filed a simple letter before the A.O. and further the full facts have not been placed before the A.O. and details and evidences have not been filed before the A.O. and further I find from whatever de....
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....ut the quantum of commission paid and also the nature of services received by the assessee. Thus, grounds raised in this appeal are restored to the file of AO for verification and the appeal of the assessee for AY 2004-05 is treated as allowed but for statistical purposes. 7. Now, we take up the Assessee's appeal in ITA No.768/Ahd/2010 for AY 2005-06. The Assessee has raised the following grounds of appeal:- Your appellant being aggrieved with the order passed by the CIT (Appeals) VIII, Ahmedabad presents this appeal against the same on the following amongst other grounds. 1. The order passed by learned CIT (Appeals) is bad in law and on fact and hence it is requested that the same be suitably modified. 2. The learned CIT (Appeals) has grossly erred in law and on facts in confirming the disallowance made by the learned Assessing Officer of the appellant's claim for deduction of Rs.l,28,55,000/- and of Rs. 1,45,80,000/- being expenses payable towards purchase commission and commission on performance guarantee respectively to British Energy Holdings Limited. 3. The learned CIT (Appeals) has grossly erred in law and on facts in confirming the aforesaid disallowance made by ....
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.... the agreement. The fact that the appellant exercised prudence in not claiming these amounts as deductible expenditure till they were paid should not be used against the appellant. 7. The learned CIT (Appeals) has grossly erred in law and on facts in confirming the disallowance made by the learned Assessing Officer by arbitrarily holding that the payments in question are in the nature of commission attracting deduction of tax at source as per the provisions of Chapter XVTI-B I.T. Act without appreciating the fact that the payments in question are in the nature of income from business in the hands of the recipients and as per Article 7 of the DTAA (Double Tax Avoidance Agreement) between India and the United Kingdom the aforesaid income is not taxable in India because BG Energy Holdings Limited did not have any permanent establishment in India during the year under appeal. Hence, there was no liability to deduct tax at source from such payments. The learned CIT (A) failed to appreciate the fact that as per legal opinion placed on record, the payment being in the nature of income from business in the hands of the non resident, there was no liability to deduct tax at source and ther....