TaxTMI 
TaxTMI 
2018 (2) TMI 498
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....ed lending. 3. We shall first take up the appeal filed by the Revenue for A.Y. 2010-11. First issue contested therein relates to disallowance made u/s. 14A of the Act. During the year under consideration, the assessee received dividend income of Rs. 4,87,200/-. The assessee suo-moto disallowed a sum of Rs. 5,90,507/- u/s. 14A of the Act. The Assessing Officer, however, computed the disallowance by applying provisions of Rule 8D of the I.T. Rules which worked out to Rs. 125.43 lakhs. Accordingly he enhanced the disallowance u/s 14A to Rs. 125.43 lakhs. 4. Before the learned CIT(A), the assessee submitted that the own funds available with it is more than the value of investmenta and hence no disallowance u/r. 8D(2)(ii) out of interest expenditure is called for. The assessee also submitted that the disallowance made by it would meet requirements of Rule 8D(2)(iii). The learned CIT(A) was convinced with the contentions of the assessee and accordingly deleted enhancement made by the Assessing Officer. 5. The Learned Departmental Representative placed strong reliance on the order passed by the Assessing Officer. 6. On the contrary, the learned AR submitted that the disallowance u/s. ....
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....mounts towards "advertisement and general expenses" to various group companies on the basis of cost sharing arrangement entered with them. The amount so reimbursed was Rs. 2230.48 lakhs. The assessee had deducted tax at source u/s. 194C of the Act @ 2%. The Assessing Officer took the view that these reimbursements are liable for tax deduction at source u/s. 194J of the Act @ 10% as against 2% deducted by the assessee u/s. 194C of the Act. Hence, the Assessing Officer, by invoking provisions of section 40(a)(ia) of the Act, disallowed the amount of Rs. 2230.48 lakhs. 9. The learned CIT(A) noticed that an identical issue was adjudicated by him in the assessee's own case in A.Y. 2009-10, wherein the learned CIT(A) has deleted disallowance by following the decision rendered by Hon'ble Kolkata High Court in the case of S.K. Tekriwal (361 ITR 432), wherein it was held that disallowance u/s. 40(a)(ia) of the Act cannot be made in a case of shortfall in the case of tax deduction at source. Accordingly, the learned CIT(A) deleted the disallowance made by the Assessing Officer u/s.40(a)(ia) of the Act in AY 2009-10. Accordingly, by following the order passed by him in AY 2009- 10, the L....
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.... as required by or under the Act but the fact is that this expression, 'on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction has not been paid on or before the due date specified in sub-section (1) of section 139'. This section 4Q(a)(ia) of the Act refers only to the duty to deduct tax and pay to the Government account. If there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, the assessee can be declared to be an assessee in default under section 201 of the Act and no disallowance can be made by invoking the provisions of section 40(a)(ia) of the Act. Accordingly, we confirm the order of the Commissioner of Income-tax (Appeals) allowing the claim of the assessee and this issue of the Revenue's appeal is dismissed." 2. We find no substantial question of law is involved in this case and, therefore, we refuse to admit the appeal. Accordingly, the appeal is dismissed. Similarly, Hon'ble Gujarat High Court in the case of CIT vs. Prayas Engineering Ltd. in Tax appeal No. 1237/2014 dated 17.11.2014, deleted t....
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....ct. He submitted that an identical view has been expressed by Hon'ble Delhi Special Bench of ITAT in the case of ACIT Vs. Vireet Investment Pvt. Ltd. (2017) 165 ITD 27. Accordingly, the learned AR submitted that the Ld CIT(A) was justified in deleting the addition made by the AO to compute book profit u/s. 115JB of the Act. 14. The Learned Departmental Representative, on the contrary, placed reliance on the order passed by the Assessing Officer. 15. We noticed that the plea of the Revenue has been decided against the Revenue by Hon'ble Bombay High Court in the case of Bangalore Finance and Investments Pvt. Ltd. (supra). Accordingly, the Assessing Officer was not justified in adopting the disallowance made by him u/s. 14A of the Act for the purpose of computing book profit under section 115JB of the Act. Hence, the learned CIT(A) was justified in deleting the addition so made by the Assessing Officer. 16. Now we shall take up the appeal filed by the revenue for AY 2011-12. The first issue contested by the revenue relates to the disallowance made u/s 14A of the Act. During this year, the assessee declared dividend income of Rs. 40.02 lakhs. The assessee disallowed a sum of....
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....Act for making addition to net profit for the purpose of computing book profit u/s 115JB of the Act. Since the disallowance enhanced by the AO was deleted by Ld CIT(A), the first appellate authority deleted the addition so made by the AO to the net profit. 22. Identical issue was considered by us in the earlier paragraphs while dealing with the appeal of the revenue filed for AY 2010-11, wherein we have upheld the view taken by Ld CIT(A) for the reasons discussed therein. Accordingly, by following the same, we uphold the order passed by Ld CIT(A) on this issue. 23. We shall now take up the appeals filed by the assessee. The solitary issue urged by the assessee in both the years relate to the rejection of claim for deduction of Service tax liability. The facts relating to the same are discussed in brief. The assessee is liable to pay service tax on the services provided by it. Some of the services are taxable and some of the services are exempt under the Service tax Act. Accordingly the assessee was collecting Service tax on the taxable services rendered by it. 24. The assessee was also paying service tax on some of the services availed by it from other persons. As per the provis....
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....ettled proposition of law that the "Exclusive method" or "inclusive method" followed by the assessees for accounting for taxes would not have any revenue implication. He submitted that the assessee has no other option but to transfer the input credit relatable to Exempt services to the Profit and Loss account, since it cannot be claimed as credit as per Service tax Rules. The Ld A.R also carried us through the paper book to show the workings furnished by the assessee before the AO, which depicts the segregation of total input credit amount between taxable services and exempt services. He also took us to the Profit and loss account to show that the assessee has duly transferred the Service tax relatable to the exempt services to the Profit and loss account. The Ld A.R also took us through the Service tax returns to show that the assessee has availed input credit relatable to taxable services only. 28. On the contrary, the Ld D.R supported the orders passed by the tax authorities. 29. We have heard rival contentions on this issue and perused the record. There should not be any doubt that the service tax paid by the assessee on the services availed by it, is normally allowed as dedu....