TaxTMI 
TaxTMI 
2018 (3) TMI 307
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....er the relevant law governing contribution to provident fund. The AO invoked the provision of section 36(1)(va) of the Income Tax Act, 1961 (Act) r.w.s.43B of the Act and added a sum of Rs. 7,00,683/- to the total income of the assessee on the ground that employees share of contribution was paid beyond the due date and hence should not be allowed as deduction while computing income as per the provisions of Sec.43B of the Act. 4. Before the CIT(A), the assessee pointed out that the contributions were paid within the grace period of five days allowed for deposit of employees share of contribution to Provident fund. Therefore, the addition made by the AO was not justified. The CIT(A) held that if employees contribution had been paid on or before the due date of filing the return of income then the same should be allowed. 5. Aggrieved by the order of CIT(A) the revenue has raised ground no.1 before the tribunal. 6. None appeared on behalf of the assessee. At the time of hearing it was brought to our notice that the Hon'ble Calcutta High Court has also taken the view that employees' contribution to PF paid on or before the due date of filing the return of income u/s 139(1) of t....
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....such expenditure and the business carried on by the assessee company." 9. The assessee besides growing and manufacturing of tea was also engaged in the business of real estate and trading . The AO disallowed a sum of Rs. 35,040/- which was puja expenses incurred in the trading division of the assessee. The AO also disallowed a sum of Rs. 2,48,179/- which was a payment to temple. These expenses were incurred in the textile division of the assessee. In the Micco division of the puja expenses Rs. 2.84,312/- was disallowed. In the Cotton Mill division puja expenses of Rs. 26,166/- was disallowed. 10. On appeal by the assessee the CIT(A) deleted the addition of puja expenses of Rs..2,84,312/- in the micco division , Rs. 26,166/- in the cotton mill division and Rs. 35,040/- in the trading division. The AO had made the disallowance on the ground that these expenses have no nexus with the business of the assesee. The CIT(A) however followed the decision rendered in assessee's own case for A.Y.2007-08 in ITA No.589/Kol/2012 order dated 19.12.2013 wherein it was held that such expenses are incurred to keep harmony among the assessee's employees and therefore have to be considered as bu....
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....ces of the case. We find that Assessing Officer treated the commission paid to foreign agent as non allowable expenses as assessee failed to deduct TDS and he disallowed the commission to the extent of Rs. 1135554/- . Aggrieved, assessee preferred appeal be/ore CIT(A), who allowed the claim of assessee by observing vide para - 7.1 of his order as under.- "7.1 It is seen that AO made this disallowance on the basis of Supreme Court decision in case of M/s. Transmission Corporation of India reported in 239 ITR 587 wherein it was held that only way to escape liability is to get no deduction certificate or lower rate deduction certificate from AO. Appellant on the other hand has submitted that this issue was further clarified by Hon 'ble Supreme Court in case 0/ GE India Technology Centre P Ltd. vs. CIT in 44 DTR Supreme Court 201, in which Supreme Court has clarified that obligation to deduct tax at source arises u/s. 194 only when there is any sum chargeable under the Act. And CBDT circular has also clarified, that TDS provision will not applied in case where such income is not taxable in India. In this case, as the income doe not arise in India and the commission is paid....
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....yments were therefore, held to be not taxable in India. This clarification still prevails, in view of the fact that the relevant sections [Section 5(2) and section 9] have not undergone any change in this regard. No tax is therefore deductible under section 195 from export commission and other related charges payable to such a non- resident for services rendered outside India - Circular No. 786, dated 07.02.2000." 18. Though the aforesaid Circular has been withdrawn by CBDT by Circular No.7 dated 22.10.2009, yet the principle laid down in the said circular is applicable to the facts of the present case. If commisison does nt accrue or arise in India, the same is not taxable in Inia. In view of the above we find no merits in ground no.3 raised by the revenue. Grounds no.3 raised by the revenue is dismissed. 19. Ground No..4 raised by the revenue reads as follows :- "4. That on the facts and circumstances of the case and in law Ld.CIT(A) has erred in deleting the addition made under Nursery expenses have always been held as capital in nature and as per law, as the said expenditure utilized for developing nursery and providing plants and shade trees for the tea garden."....