2017 (1) TMI 811

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....ed in treating the expenditure of Rs. 2,69,332 to be in the matter of 'Royalty' as defined under explanation 2 to section 9(1)(vi) of the Act. 3. The learned AO and CIT(A) erred in making disallowance of expenditure of Rs. 2,69,332 under section 40(a)(ia) of the Act for nondeduction of TDS under section 194J of the Act. 4. The learned CIT(A) passed the order in violation of principle of natural justice. 2. Brief facts of the case are as under : In this case, the return of income for the assessment year under consideration was filed on 31-10-2007, declaring a total income at Rs. 10,76,520/-. The assessment was completed u/s 143(3) of the Act on 16-12- 2009, determining total income at Rs. 13,70,852/-. The AO has made ....

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....n 40(a)(ia) are not attracted inasmuch as the entire freight expenditure is paid and nothing is payable as on 31-03-2007. The facts in this regard are undisputed. The assessee's plea is that the entire freight amount was paid and nothing is payable as on 31-03-2007, and that this is duly reflected by a perusal of the balance sheet/profit & loss account where no amount is payable as on 31-03-2007. In this regard learned counsel of the assessee has placed reliance upon CIT vs. Vector Shipping Services (P) Ltd. 357 ITR 642 (All.). In the said case Hon'ble Allahabad High Court has upheld the finding that when the expenses incurred by the assessee is totally paid and not remained payable as at the end of the relevant accounting period, provision....