TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 804
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....he case on hand was transferred from Delhi to Bangalore and the CIT-II, New Delhi forwarded the order of the learned CIT(A) to the Bangalore office on 02-05-2014 and the same was received in the Office of CIT, Bangalore-III on 19-05-2014 only. It is prayed that delay in filing the appeal be condoned as it was neither willful nor intentional and was only due to the factual circumstances, laid out above surrounding the transfer of this case from New Delhi to Bangalore. 2.2 The learned AR for the assessee had no objection, if the delay in filing the appeal was condoned. 2.3 We have heard both parties and perused and carefully considered revenue's petition for condonation of the delay in filing this appeal. After due consideration of the reasons adduced for the delay in filing the appeal and the attendant factual circumstances, we are of the view, that this is a fit case for condonation of delay in filing this appeal before the Tribunal. We therefore, condone the delay and admit the appeal for hearing and adjudication. 3. The facts f the case, briefly, are as under; 3.1 The assessee, a company engaged in the manufacture and sale of Beer, filed its return of income for assessmen....
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.... the case of M/s Glaxo Smith Kline Asia P.Ltd. wherein the facts are different than the instant case. 6. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the AO may be restored. 7. The appellate craves leave to add, alter, amend and/or delete any of the grounds mentioned above". 5. The grounds at sl.no.1,6 & 7 are general in nature and therefore, no adjudication is called for thereon. 6. Ground no.2 Depreciation on goodwill 6.1 In this ground the revenue assails the impugned order of the learned CIT(A), in deleting the disallowance of depreciation on goodwill without appreciating the fact that the same is not admissible as per the provisions of Section 32(1) of the Act, as goodwill is not defined as an intangible asset. The learned DR was heard in support of the grounds. 6.2 Per contra, the learned AR for the assessee supported the order of the learned CIT(A) in deleting the disallowance of depreciation on goodwill made by the AO. The learned AR submitted that revenue's appeal on this issue is liable to be dismissed, as the same issue h....
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.... Rule 6DD 7.1 In this ground revenue assails the order of the learned CIT(A) in allowing the assessee's claim as being contrary to the provisions of Sec.40A(3) r.w. Rule 6DD in respect of cash payments in excess of Rs. 20,000/-. It is contended by the learned DR, that the AO had rightly made the disallowance u/s 40A(3) of the Act, as the assessee could offer no plausible justification for making cash payments as freight to truck drivers who brought raw material to the Brewery at odd hours i.e late night or early mornings. The learned DR submitted that in the above factual circumstances, the finding of the learned CIT(A) on this issue be reversed and that of the AO be restored. 7.2 Per contra, the earned AR for the assessee supported the finding of the learned CIT(A) in deleting the disallowance u/s 40A(3) r.w.Rule 6DD in the facts and circumstances of the case. The learned AR reiterated submissions made before the learned CIT(A) and contended that except for raising this ground, the revenue has not been able to controvert the finding of the learned CIT(A) on this issue. 7.3.1 We have heard the rival contentions and perused and carefully considered the material on record. The....
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....laced reliance on the finding of the learned CIT(A) in the impugned order in deleting the disallowance of Rs. 10.00 Crores u/s 40A(2) of the Act, and submitted that no interference was called for. In support of its claim for these payment of Rs. 10.00 Crores to M/s United Breweries Ltd. ('UBL') to be allowed, the learned AR reiterated the submissions made before the learned CIT(A) and placed reliance on the decision of the ITAT Chennai Bench in the case of M/s Empee Breweries Ltd. in ITA No.1295/Mds/2012 dated 214-02-2013 wherein on similar facts payment of Rs. 4.00 Crores by the assesseee in that case to UBL, for provisions of technical and management advice and consultancy by which it had received services and intangible benefits by association with UBL, was held to be allowable. 8.3.1. We have heard the rival contentions and perused and carefully considered the material on record including he judicial decisions cited. At the outset, we observe that the payment of Rs. 10.00 Crores by the assessee to UBL has not been doubted. It is seen that the assessee has paid this amount of Rs. 10.00 Crores to UBL in pursuance of technical and management advisory and consultancy agree....
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....efore, hold that the AO has not been able to establish in the order of the assessment that there was any tax avoidance plan involved in this transaction. The factual matrix of the case indicate that the assessee paid the sum of Rs. 10.00 Crores to UBL for technical, management and consultancy services received as per the agreement with UBL, the receipt of which UBL has acknowledged as being for technical, advisory, management and consultancy services rendered by it to the assessee. In respect of the issue of commercial expediency of the aforesaid payment of Rs. 10.00 Crores to UBL, we are of the view that this has been clearly established in the factual matrix of the case by the various benefits the business of the assessee received (Supra)as laid out above. We do not find merit in the AO's contentions to the contrary the view of the observations of the Hon'ble Apex Court in the case of S.A.Builders (288 ITR 1) (SC) , wherein it has been held that revenue could not sit in the chair of a businessman and decide that he is to carry out his business in a particular manner. 8.3.3 The AO had invoked the provisions of Sec.40A(2) of the Act, to make the disallowance of the said pa....
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....). However, in our opinion, these were at best corroborative evidence and were not stand alone evidence. Assessee had during the course of assessment proceeding produced before the AO details of the services rendered by M/s UBL. In our opinion, even dehors the records produced by the assessee before the learned CIT(A), it could reasonably demonstrate the business purpose behind its association with M/s UBL. Assessee might not have been able to produce before the AO specific evidence, but nevertheless M/s UBL has acknowledged that Rs. 4.00 Crores was received by it for services rendered. Nevertheless, it had furnished a workout of its savings due to help of M/s UBL which was also disbelieved by the AO. There might have been lingering doubt in the mind of the AO as to why such amounts were paid to M/s UBL, but in our opinion, a mere suspicion without further evidence would not be a ground for disallowing a claim where actual payments were indeed effected. Further, learned CIT(A) has given a clear finding that the transaction was revenue neutral. M/s UBL had a returned interest income of Rs. 80,19,22,970/- on which it had paid tax at maximum marginal rate, as noted by the CIT(A). If t....