2015 (9) TMI 946

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nds in its appeal; however the crux of the issues is that the Ld. CIT (A) had erred in upholding the order of the Ld.A.O wherein he had disallowed Rs. 44,83,941/- invoking the provision of Section 40(a)(ia) of the Act and also by treating the expenditure incurred towards debit notes raised by with M/s. S & V Industries Inc., USA as unexplained and not genuine. 3. The brief facts of the case are that the assessee is engaged in the business of manufacturing of iron castings and Generation of power through wind mill, filed its return of income for the assessment year 2008-09 on 24.09.2008 admitting its total income as Rs. 7,42,04,490/-. Subsequently, the case was taken up for scrutiny under CASS and the assessment was completed on 29.12.201....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e assessment year 2008-09 because all the invoices were dated during the assessment year 2007-08. 3.3. On appeal, the Ld. CIT (A) also arrived at the conclusion that the exact nature of transaction was not known and therefore, the details of the work carried out by M/s. S & V Industries Inc., USA is not on the basis of terms and agreements between the assessee and M/s. S & V Industries Inc., USA and accordingly confirmed the order of the Ld. Assessing Officer. 4. Before us, the Ld. A.R submitted a paper book containing 1 to 46 pages being the same documents produced before the Ld. Assessing Officer and the Ld. CIT (A) and reiterated the submissions that were advanced before the Revenue authorizes on the earlier instances. He further s....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the debit note raised by them. The assessee has explained that the debit notes raised was due to the minor expenses incurred by M/s.S & V Industries Inc., USA towards repairs of the goods supplied by the assessee, which they wanted to recover. The invoices were also raised by the assessee against M/s. S & V Industries Inc., USA for the sales made by the assessee as observed by the Ld. Assessing Officer in his order para-4 as follows:- "4.-- -- A Perusal of the invoices produced by the assessee revealed that the invoices are dated 12/11/2006, 20/12/2006, 19/01/2007, 27/12/2006, 15/01/2007, 22/01/2007 and also in foreign cur rency." Consequently the assessee would have debited the party M/s. S & V Industries Inc., USA and credited sale....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d, the expenses incurred by the assessee has to be disallowed. Accordingly the Ld. Assessing Officer disallowed the expenditure incurred by the assessee towards repairs/services charges payable to M/s. S & V Industries Inc., USA, which was further confirmed by the Ld. CIT (A). 7. However, on perusal of the facts it is crystal clear that M/s. S & V Industries Inc., USA had raised the debit notes against the assessee for whatever reasons it may be and it has become extremely difficult for the assessee to recover its entire sales proceeds. In order to keep good business relationships, the assessee had conceded to the debits notes raised by M/s. S & V Industries Inc., USA and preferred to accept a lesser amount than what was invoiced. In the....