TaxTMI 
TaxTMI 
2016 (10) TMI 44
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....ely rendered outside India and they do not have any business partners or Non residents in India. iii) Further these expenditure has been paid during the previous year. iv) The officers below were also not justified in confirming that an amount of Rs. 36,72,000/- being the amount paid to M/s. Muthoot Global Money Transfers Pvt. Ltd. for Branding Expenses for the reason that this is only a provision, and for further reason that TDS has not been deducted. v) The officers below were not justified in confirming the addition of Rs. 70,51,200/- being proportionate F.M. Radio License Fee incurred by the appellant prior to demerger of the unit from the appellant company. vi) The officers below were not justified in confirming addition of Rs. 61,88,642/- being advance made on pledge of stolen gold, especially when the RBI guideline supports the claim of the appellant. vii) Being Banking company, money and gold pledged are stock in trade of the assessee and having written off in the books should have been allowed as expenditure. 3. The brief facts of the case are that by order dated 21/03/2013 and served on the assessee on 22/03/2013, the Additional Commissioner of Income Tax, R....
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....ing or arising in India. As stated earlier they do not have any establishment in India and they have been registered under the laws of United Kingdom and also assessable to tax there. Therefore the various provisions, case laws as narrated by the officer in the order are not at all applicable. 5. She has also said that out of the Branding Expenses, an amount of Rs. 36,72,000/- payable to M/s. Muthoot Global Money Transfers P Ltd. is only a provision which has been paid subsequently. According to her the provision created in the books are not an allowable expenses since the liability has not crystallized in the F.Y. 2009-10. Being a company following the mercantile system of accounting the claim has been rightly made in tune with the Accounting Standard prescribed and rightly allowable. 6. Yet another disallowance made and confirmed is of F.M. Radio Licence fee written off. During the year, the assessee had written off an amount of Rs. 70,51,200/- being F.M. Radio License Fee amortized in the earlier year. This amount is for a period of 9 months during which time the assessee company had exploited the F.M. Radio License. The Radio business carried on by the assessee company was de....
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....t global Transfers Pvt. Ltd., UK for the wide publicity for Muthoot Brand and to create awareness among them the forex and money transfer services provided by them through a large network of branches and franchise all over India. The company has reimbursed to M/s. Muthoot Global Transfers Pvt. Ltd., UK towards expenses incurred by them for the above mentioned activities, as per invoice issued by them. Details of marketing activities performed by Muthoot Global Transfers, UK are About the products and services of Muthoot exchange company Pvt. Ltd., India. Money transfer services available to India through Muthoot Exchange Branches both inward and outward remittances. Foreign exchange services. Payment of educational expenses/fee from India to UK Targeted customers. NRIs residing in the United Kingdom Immigrant Indian workers in the UK. Foreigners and Indians travelling to India and UK Different modes of marketing done dlring the F.Y. 2010-11 Direct marketing to the customers of Muthoot Global Transfers Distributed the brochures explaining the products and services of Muthoot Exchange India. Sponsored various association programs organized by Ind....
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....king Finance Company. The paper book filed contains copy of guidelines from page 8 to 23. He drew our attention to page 10 which defines loss assets that is an asset which is an advance affected by a potential threat of non-recovery due to either erosion in the value of security or non availability of security or due to fraudulent act or omission on the part of the borrower. Again at page 14 the provision requirement is given, whereas under loss assets it is prescribed that the entire assets shall be written off. As stated by the assessee money or money's worth is stock in trade as far as the assessee company is concerned, any loss or diminution in its value has to be written off and claimed as loss. 14. Having regard to this principal and respectfully following the guidelines of RBI, we are of the considered view that the assessee company is entitled to claim the loss of Rs. 61.88 lakhs in this regard. Thus all the grounds of the assessee are allowed. Accordingly, the appeal filed by the assessee is allowed. 15. We now come to the appeal filed by the Revenue in I.T.A. No. 175/Coch/2015. 16. The Revenue has filed the following grounds of appeal:- 1. The Order of the Commission....
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....ts so accumulated by it for its own business purpose. Hence the provisions of sec.40A(9) shall not apply to the instant case. 14. We have already stated that the contributions to the staff welfare scheme, in effect, have been made by each of the employees of the assessee company. The "staff welfare scheme" is a collective name given by the assessee in respect of such contributions, which means that the assessee should be in a position to furnish the name wise break up details of the outstanding balance. In our view, the collective name "Staff welfare scheme" is akin to the collective name "Sundry creditors". Accordingly the "Staff welfare scheme" can only be taken as a liability (Creditors) account, i.e., the amount payable to each of the employees who have contributed to the said scheme. Instead of keeping the account in each of the employee name, the assessee has aggregated them and shown as under a collective name. The Ld CIT(A) has noted that the assessee pays the accumulated amount outstanding in the name of the retiring employees along with the interest accrued there on at the time of retirement. It is also submitted that the assessee is deducting TDS from such interest pa....