TaxTMI 
TaxTMI 
2017 (2) TMI 695
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.... 10 (15)(iv)(c) were applicable to the assessee's case in relation to the assessment year 1996-97? (ii) Whether the approval of the Govt. of India, Ministry of Finance in their letter dated 25.5.95 approving the loan amount, rate of interest and the mode of repayment did constitute the approval of the Central Govt. in this behalf with regard to the rate of interest, terms of the loan and its repayment of purpose of Section10(15)(iv)(c) of the Income Tax Act?" 2. The assessee was at the relevant time engaged in the business of printing and binding of telephone directories. For its business, it imported machinery from a foreign supplier i.e. M/s. Quebecor Printing Ltd. Inc., Canada on deferred credit to the tune of Canadian dollars 2....
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....the Govt. approval are complied with and that no additional foreign exchange liability, either express or implied, is being assumed under the arrangements. 5. Kindly note that in case the credit is required to be guaranteed by a Bank/Development Financial Institution (DFI), the same shall be provided by scheduled commercial bank(s) or DFI(s) in India. The counter guarantee from a foreign bank or confirmation of a scheduled bank or DFI's guarantee by a foreign bank will not be permitted under any circumstances. The guarantee issuance, however, would be subject to the authorization of Industrial & Export Credit Department of Reserve Bank of India under CAS. 6. The Reserve Bank of India would be advised to allow you to draw any loan and ....
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....ement Fee : ------------- Management Fee : ------------- Agency Fee : ------------- Commitment Fee : ------------- Please intimate early the date of payment and amount of payment of the interest and the country to which the amount was remitted." 4. The Assessment Officer ('AO') while completing assessment was of the opinion that since tax was deductable under Section 195 of the Act, the amounts had to be disallowed under Section 40(a)(i) of the Act and proceeded to do so. The CIT(A), whom the assessee approached, granted relief taking a broad view of the matter. The Commissioner was of the opinion that the provision relied upon i.e. Section 10(15)(iv)(c) of the Act, merely talks of the Central Government and that in the circumstances o....
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....(A) as containing the correct approach in the facts of the case. Counsel for the Revenue, on the other hand, urged that the reference to the Central Government has to be necessarily urged as one meaning the 'concerned department', which in this case is none other than the Department of Revenue. He highlighted the fact that the assessee approached the Department of Revenue after an inordinate delay though it was asked to do so by the RBI on 22.12.1995. By the time it did approach, it had already filed the return. Given these circumstances, the invocation of Section 40(a)(i) of the Act was not unjustified, the assessee would very well availed its opportunity of approaching the AO under Section 195 of the Act, which it did not at the relevant ....