TaxTMI 
TaxTMI 
2016 (4) TMI 1120
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....he learned Commissioner of Income tax (Appeals) - Mysore has erred in confirming the disallowance of bad debts relatable to lOA units to the extent of Rs. 80.75 lakhs. 4. The learned Commissioner of Income tax (Appeals) - Mysore has erred in confirming the adhoc disallowance of commission paid amounting to Rs. 5,00,000/- 5. The learned Commissioner of Income tax (Appeals) - Mysore has erred in confirming the adhoc disallowance of motor vehicle hiring expenses amounting to Rs. 5,00,000/- 6. The learned Commissioner of Income tax (Appeals) - Mysore has erred in confirming the reduction of export turnover of Rs. 38,79,909/- from the figure of export turnover for the reason that the same has not been received or brought into India. 7. The learned Commissioner of Income tax (Appeals) - Mysore has erred in confirming the reduction of export turnover of Rs. 2,00,00,000/- from the figure of export turnover for the reason that the same has not been received or brought into India. 8. The learned Commissioner of Income tax (Appeals) - Mysore has erred in not adjudicating the grounds that telecommunication charges of Rs. 2 crores, expenses incurred on overseas travel amounting t....
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.... facts and in the circumstances of the case, ld.CITA) erred in allowing the wrong claim of 75% of expenditure incurred for supplying lunch coupons, event management, foreign countries, gift coupons etc.despite the assessee not being able to prove that the same has been incurred for business purposes. 3. On facts and in the circumstances of the case, the ld,.CT(A) erred in law in holding that the travel expenditure cannot be disallowed because the same has been allowed in earlier years. 4.. On the facts and in the circumstances of the case, the ld.CIT (A) erred in holding that the forex gain is to be part of export turnover for computation of deduction u/s 10A despite it not being erred from the business of software export by placing reliance on the order of High Court of Karnataka in the case of Infosys Technologies Pvt.Ltd which has not reached finality in view of pending SLP of the department. 5. On the facts and circumstances of the case, ld.CIT(A) erred in law in directing the AO to exclude the reimbursement of certain expenses both from the export turnover as well as from total turnover for the purposes of computation of deduction u/s 10A, without appreciating the fac....
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....ing material on record to justify the adhoc disallowance of expenditure. The learned AR forcefully argued that the details called for were produced during the assessment proceedings and the impugned expenditure satisfies all the requirements of Sec.37 of the IT Act, 1061 , therefore, the revenue authorities cannot decide how much is the reasonable expenditure.. Even otherwise still the expenditure under instant head is continuing and consistence. On the other hand, learned DR vehemently argued that the staff welfare expenses are in higher side and seems to be personal in nature and the observation of the AO is right in not sustaining the claim of the assessee. We have given our thoughtful consideration to the facts, circumstances and the relevant material available on record and also the impugned orders passed by the authorities below. The Ld. AO had disallowed the expenses to the extent of 50% of the total amount and in appeal the learned CIT(A) restricted to the extent of 25% on the ground that some of the expenses are personal in nature. It is important to mention herein that from the order of the AO, the detail of the expenditure reflects that there is no material to show th....
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....deletion of the word "established", which earlier existed in Section 36(1)(vii) of the Income Tax Act, 1961 [`Act', for short]. For the sake of clarity, we re-produce herein below provisions of Section 36(1)(vii) of the Act, both prior to 1st April, 1989 and post-1st April, 1989: "Pre-1st April, 1989: Other deductions. 36.(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with herein, in computing the income referred to in section 28-- (i) to (vi) xxxx xxxx xxxx (vii) subject to the provisions of sub-section (2), the amount of any debt, or part thereof, which is established to have become a bad debt in the previous year. Post-1st April, 1989: Other deductions. 36.(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28-- (i) to (vi) xxxx xxxx xxxx vii) subject to the provisions of sub-section (2), the amount of any bad debt or part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year." This position in law is well-settled. After 1st April, 1989, i....
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....by the learned counsel for the assessee that the motor vehicle hiring expenses were of Rs. 80,69,000/-. The AO had disallowed to the extent of Rs. 5.00 lakhs only on the assumption that the element of personal use cannot be totally denied. Even otherwise, learned CIT(A) has not given any specific reason, while upholding the disallowance of Rs. 5.00 lakhs. We have given our thoughtful consideration and found that the AO added Rs. 5.00 lakhs out of Rs. 80,69,000/- just on the assumption and on wrong presumption that the element of personal use cannot be totally denied. Even otherwise, learned CIT(A) also failed to give any special reason while confirming the disallowance. Therefore, we feel it appropriate to allow the claimed amount of Rs. 80,69,000/- under the head motor vehicle hiring expenses as deduction in its entirety . 6 GROUND no. 6, the assessee argued that the export turnover of Rs. 38,79,909/- should not be reduced from the figure of export turnover in computing the deduction u/s 10A of the IT Act, 1961. Learned DR relied on the order of the CIT(A) on this issue. We have considered the facts relating to these grounds, as the AO was pleased to reduce the aforesaid amount f....
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....sideration the submissions of the Asesssee and also to the Order passed by Authorities below as the Ld AO felt that major amount would have been incurred in respect of export than for other purpose, therefore he had taken the value of telecommunication at Rs. 2,00,00,000/- as adopted. The Ld CIT (A)n failed to adjudicate this head. We feel that the ld AO adopted value at the higher rate only on the assumption but not on any basis relevant to, hence we restrict the amount under head of telecommunication to Rs. 73,73,107/- only and the same can be excluded but not otherwise. Re : Expenses Incurred Towards Overseas Travelling of Rs. 10.00 Crores. AND an amount of Rs. 15 lakhs being expenditure incurred on payment of commission to one Mr. Les Lawrence, a foreign national It was argued by the Ld AR that the Assessee that the aforesaid charges were not incurred for providing technical service out of India as the appellant all time during the relevant previous years was not engaged in the providing technical services outside India. Even otherwise, said expenditures were though, being incurred in foreign currency and can not be excluded on estimated and adhoc basis. We have gone thr....
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....f Rs. 14,73,77,601/- consideration received for services rendered to overseas clients outside India. It was held by the learned AO that "the assessee company had rendered services to the extent of Rs. 14,73,77,601/-outside India to its overseas clients and received the above amount for such services. During the course of assessment proceedings, the assessee was asked as to how much is the expenditure relating to such services rendered outside India. The assessee mentioned that such expenditure may be above 5% of the receipts. However, I feel that 5% is too low a figure. Considering the facts of the case, I adopt this figure at 20% of the above receipts which works out to Rs. 2,94,75,502/- and shall be reduced out of the export turnover, as it is in the nature of technical service rendered outside India". We have given our thoughtful consideration on the facts and circumstances of the case, as well as the orders passed by the authorities below. As it reflects from the relevant part of the order passed by the learned AO that he adopted the figure under the aforesaid head at the rate of 20% of the above receipts and worked out to Rs. 2,94,75,502/-. We have also considered the Cla....
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.... export by placing reliance on the order of High Court of Karnataka in the case of Infosys Technologies Pvt. Ltd which has not reached finality in view of pending SLP of the department. Controversy of this ground has been decided in favour of the Assessee vide ground no. 8 of Assessee Appeal and conclusion of the same is not repeated herein for the sake of brevity. Ground no. 5 : On the facts and circumstances of the case, ld.CIT(A) erred in law in directing the AO to exclude the reimbursement of certain expenses both from the export turnover as well as from total turnover for the purposes of computation of deduction u/s 10A, without appreciating the fact that the statute allows exclusion of such expenditure only from export turnover by way of specific definition of export turnover as envisaged by sub-clause(4) of Explanation-2 below sub-section(8) of sec.10A and the total turnover has not been defined in this section. Controversy of this ground has been decided in favour of the Asesseee and conclusion of the same is not repeated herein for the sake of brevity. Ground no. 6 : On the facts and circumstances of the case, ld.CIT (A) erred in directing the AO to compute ded....