TaxTMI 
TaxTMI 
2017 (5) TMI 1269
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.... Act, 1961(in short 'the Act). 2. The respective grounds of appeal raised by the assessee and revenue are as under : By the assessee "1. On the facts and circumstances of the case the Learned Assessing Officer and CIT (Appeal) has erred in disallowing the expenditure, incurred on procuring of design, process and drawing from Hamworthy Combustion Engineering SRL, Italy amounting to Rs. 74,09,238/-, U/s. 40(a)(i) for the reason that remittances are made by the assessee to the foreign party (being Nonresident Entity) without deduction of tax at Source. The A. O. and CIT (Appeal) failed to appreciate that tax at source is not required to be deducted from the payment to Hamworthy Combustion Engineering SRL, Italy, as the income earne....
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....in proportionate disallowance of the Hire charges of Rs. 86,048/ - and Rs. 82,330/- paid to SMS crane services and S K Rawat & Co. respectively u/s 40 (a)(ia) . The A. O. failed to appreciate the fact that TDS has been deducted and paid by the appellant Company on the said amount u/s 194C of Income Tax Act and not U/s. 1941. Further the said provision u] s 40 (a)(ia) does not provide for any proportionate deduction of expenses but applies only in case of non deduction of TDS or after deduction but nonpayment of same." By the Revenue "1. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in directing the AO to tat the expenditure of Rs. 74,09,238/- incurred by the assessee on acquisition o....
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....a sum of Rs. 74,09,238/- in the profit and loss account under the head "Engineering Drawings". It was noticed that the said expenses related to acquisition of Engineering Drawings from Hamworthy Combustion Engineering SRL, Italy. The AO rejected the assessee's claim of such expenditure being revenue in nature. According to the AO, the expenditure incurred on acquisition of engineering processes and designs represented expenditure incurred to acquire technical know-how which was to be treated as capital in nature. Secondly, the AO noticed that the assessee had not deducted requisite tax at source and therefore on this account also such expenditure could not be allowed as a deduction. Accordingly, in the total income determined, the addition ....
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....32(1)(ii) that expenses incurred on acquiring the aforesaid rights including technical know-how would amount to acquiring intangible assets of capital nature so as to be eligible for depreciation there-under. Taking into account the totality of all the fact and circumstances of the case, the expenditure aggregating to Rs. 74,09,238/held to be in the nature of capital expenditure and therefore liable to be disallowed for this reason also. Depreciation thereon as admissible under the Rules shall be allowed once the matter attains finality" 8. On the basis of aforesaid, it is sought to be canvassed that in the event that the expenditure in question is held to be in the nature of capital expenditure, the AO has admitted it to be eligible for....
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....the relevant facts are that as per the AO, the payment made by the assessee for hiring of crane was liable for deduction of tax at source at the rate of 10% in terms of section 194I of the Act. Whereas, the assessee had deducted the tax at source at a lower rate in terms of section 194C of the Act. Notably, the stand of the assessee was that tax was liable to be deducted u/s 194C of the Act and not under section 194I of the Act which related to payments by way of rent, etc. In view of the aforesaid position, the AO invoked the provisions of section 40(a)(ia) of the Act and disallowed a part of the expenditure relatable to the short deduction of tax at source. The said action of the AO has since been affirmed by the CIT(A) against which the ....