TaxTMI 
TaxTMI 
2016 (8) TMI 906
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....s" and "Surcharge" "paid on the ground that the "tax" U/s.115JAA is exclusive of the same. 1.2. The said CIT(Appeal) ought to have considered the fact that "Education Cess" and "Surcharge" are part of "tax" only as provided in Sec 2(43) r.w.Sec 4 of the Income Tax Act and as held by the Hon'ble Supreme Court in the case of CIT V/s. K.Srinivasan 83 ITR 346. 1.3. Without Prejudice to the above, the said C.I.T.(Appeal) erred in not giving direction to the A.O. to allow the brought forward MAT credit after giving effect to the appellate orders of earlier years and not as per order U/s.143(3). Ground No.2 : Disallowance of Commission of Rs. 50,91,141/- U/sec.9 r.w.s. 195 and Sec 40(a)(i): "2.1. The said C.I.T. (Appeals), erred in confirming the disallowance of Commissioner paid to foreign agents amounting to Rs. 50,90,141/ U/sec. 40(a)(i) r.w.sec.9 and Sec.195 on the ground that no agreements between the parties were submitted to establish that the payments were towards "Commission" and not for any "professional services". The C.I.T.(Appeal) erred in not considering the agreements submitted before him to establish that the payment was for commission for ser....
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....ut of high-density polyethylene, polypropylene, nylon and polyester. * Synthetic Twines made out of aforesaid yarns. * Synthetic Ropes made out of aforesaid twines. * Fishnets made out of aforesaid twines. * Machineries. * Geo Synthetic. The manufacturing facilities of the company were carried out from the following divisions:- Sr.No. Name of the Division 1 DTA Unit (Pune) 2 100% EOU Pune (deduction u/s.10B Expired) 3 Terry Towel Unit, Pune 4 Ajman Branch 5 PPMF (Fiber), Pune 6 MBD Pune 7 100% EOU at Pune (4th Year 10B Unit) 8 GEO Synthetic (Pune) 9 Aviation 10 Fish net division, Wai (Old deduction u/s.80-IB expired) 11 DTA Unit (Wai) 12 100% EOU at Wai (8th Year 10B Unit) 13 Silvassa Division (5th Year 80IB) 14 USA Branch 15 Citadini The assessment was completed. Assessee's total income was assessed to the tune of Rs. 17,87,21,260/- u/s.143(3) of the Act. The Assessing Officer while computing the MAT credit available in set off u/s.115JAA for A.Y.2008-09 and 2009-10 at Rs. 2,82,56,883/- as against the sum of Rs. 3,50,03,841/- claimed by the appellant, resu....
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....y, the amount of MAT credit is allowable against the tax liability inclusive of surcharge and cess and not the tax payable before the surcharge and cess. The relevant portion of law mentioned above in CIT Vs. Vacment India 369 ITR 304 (All.) is hereby reproduced below for ready reference: "5. The only question which is raised pertains to the computation of tax in accordance with the modalities which are prescribed in the relevant from, ITR-6. In so far as is material, the relevant entries in the form (Part BTTI) are as follows: 3. Gross tax payable (enter higher of 2C and 1) 4. Credit under section 115JAA of tax paid in earlier Years (if 2c is more than 1)(7 of schedule MATC) 5. Tax payable after credit under section 115JAA[3-4] 6. surcharge on 5 7. Education cess, including secondary and higher educational cess 8. Gross tax liability (5+6+7) 6. The aforesaid entries leave no manner of ambiguity in regard to the method of computation of tax liability. Entry 3 requires computation of the gross tax payable. Under entry 4, credit is required to be given under section 115JAA of the Act of the tax paid in earlier years. Entry 5....
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.... order in question. 9. The learned representative of the assessee has argued that the Assessing Officer did not verify the expenses towards professional services and commission paid for export, therefore, in the said circumstances the provision u/s.9 r.w.s. 195 and section 40(a)(i) of the Act is not applicable to the facts of the present case in the interest of justice. In support of these contentions the learned representative of the assessee has placed reliance upon the law settled in CEAT International S.A. Vs. CIT 237 ITR 859 (Bom) and CIT Vs. Sara International Ltd. 217 CTR 491 and CLSA Ltd. Vs. ITO (International Taxation) 56 SOT 254, Mumbai. On perusal of the order passed by the Assessing Officer, it came into notice that the assessee has paid a sum of Rs. 50,90,141/- to various parties in foreign countries under the head professional services in addition to commission paid for export. The provision relating about the payment on professional fees is dealt by different section i.e. under the provision of section 9 r.w.s. and 195 of the Act but so far as the commission paid for export is concerned the same is required to be dealt with by the provision of the explanation 2 t....
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....tly allowed. Since the decision of Ld. CIT(A) and Hon'ble ITAT are in favour of the appellant, the Assessing Officer is directed to allow depreciation as per WDV of fixed assets of this year determined after taking into consideration the appellate order of higher authorities. Thus, this ground is partly allowed. 5.3 Secondly, Hon'ble jurisdictional Bench of ITAT has also decided this issue in favour of the present appellant from assessment year 1996-97 to assessment year 2004-05. The Department has filed appeal before the Hon'ble Bombay High Court for the assessment year 2003-04 and assessment year 2004-05. Hon'ble Bombay High Court has further rejected the appeal of the Department. Hon'ble Bombay High Court has stated in para 3 as under:- 3. Upto the assessment year 2002-03 the assessee had not claimed depreciation while computing deduction under Chapter VIA of the Income Tax Act, 1961. However, in the assessment year, in question, the assessee computed deduction under Chapter VIA after taking into account the depreciation allowable under the Act. The Assessing Officer was of the opinion that the depreciation has to be computed on the written down value of the asset....
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.... deletion of disallowance of Rs. 10,19,830/- made u/s.14A r.w. Rule 8D, as against disallowance of Rs. 2,39,855/- made by the assessee. Before discussing the matter of controversy, it is necessary to advert the observations made by the CIT(A) while deciding this issue on record. The finding is hereby mentioned below:- "5.3 Ground of appeal no.2:- It is noted that this issue was also under dispute in immediately preceding A.Y.2009-10, wherein vide order dated 15.01.2014 the Hon'ble ITAT has decided this issue. The relevant para 2.4 of the order ITAT is reproduced hereunder:- 2.4 We have considered the rival submission and carefully perused the relevant records. So far as the issue regarding disallowance u/s.14A in the case where no dividend has been received, the same is covered against the assessee by the order of Tribunal in assessee's own case for the assessment year 2008-09, wherein the Tribunal has followed the decision of special bench of tribunal while deciding the issue. Therefore, we do agree with the finding if the Tribunal on this point. Further since the assessee has raised the new plea in the year under consideration that no expenditure had been ....
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....lowance. The AO has not brought on record any fact or material to show that any expenditure has been incurred on the activity which has resulted into both taxable and non taxable income. Therefore, in our view when the assessee has prima facie brought out a case that no expenditure has been incurred for earning the exempt income the provisions of section 14A cannot be applied. Accordingly, we delete the addition disallowance made by AO u/.s14 A r.w. Rule 8D." 5.3.1. Since the facts are identical during the year under consideration also, accordingly respectfully following the order of Hon'ble ITAT in immediately proceeding year, it is held that the A.O. should exclude the old investments in group concerns of the appellant as the appellant has not incurred any administrative expenses in holding such investments. This ground of appeal is accordingly statistically partly allowed." 12. In view of the observations made by the CIT(A), it is apparent on record that the CIT(A) has passed the order on the basis of the order passed by the Income Tax Appellate, Mumbai for the A.Y.2009- 10 in assessee's own case. The CIT(A) has also reproduced the relevant para of the ITAT order whi....