TaxTMI 
TaxTMI 
2018 (7) TMI 124
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.... runs an auto workshop. The return of income was filed declaring an income of Rs. 53,81,190/- . The return was initially processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter called the 'Act') and subsequently the case was selected for scrutiny. During the course of assessment proceedings the AO noticed that as against the gross sales of Rs. 48,85,11,966/-, the assessee had paid license fees to BPCL amounting to Rs. 13,87,436/-. The AO was of the opinion that tax was to be deducted at source by the assessee on the payment of license fee. It was the assessee's submission before the AO that license fee forms part of purchase and the same is charged on the bills issued by the BPCL for purchase of petrol/diesel and, therefore, the same ....
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....ugned addition has been made without appreciating the facts and circumstances of the case and by recording incorrect facts and findings. 3. That in any case and in any view of the matter action of Ld. CIT(A) in not reversing the action of Ld. AO in making the impugned disallowance and framing the impugned assessment order, as the same is not sustainable on various legal and factual grounds and more so as the same has been passed by recording incorrect facts and finding and without giving adequate opportunity of hearing to the assessee." 3. The Ld. Authorised Representative submitted that the assessee purchases diesel and petrol from BPCL and the license fee is part of the purchase price being charged by the BPCL. He drew our attention ....
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....ch disallowance had been made in earlier years. It was submitted that assessments for assessment years 2008-09 and 2009-10 had been completed u/s 143(3) of the Act wherein no such disallowance had been made. The Ld. Authorised Representative drew our attention to the copies of the two assessment orders in for 2008-09 and 2009-10 as afore mentioned and which were forming part of the paper book. 3.1 Coming to the second issue being challenged by the assessee with respect to disallowance of travelling expenses, the Ld. Authorised Representative submitted that out of total amount of Rs. 2,96,602/-, an amount of Rs. 1,93,691/- pertained to foreign travel whereas the remaining amount of Rs. 1,02,911/- was towards domestic travelling expenses. It....
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.... Act. A perusal of the invoice filed before us shows that licence fee is recovered from the assessee on each and every purchase of diesel and petrol and it necessarily forms part of the invoice which is issued by BPCL. Thus, it necessarily forms part of the purchases of the assessee which falls within the ambit of section 28 of the Act itself. The Ld. CIT (A) has upheld the disallowance on the ground that licence fee was covered by section 194H of the Act but she has failed to demonstrate how this conclusion has been arrived at. We are unable to agree with the findings of the lower authorities in this regard. It is settled law that section 194H is attracted when there is a principle and agent relationship between two parties whereas in the ....