TaxTMI 
TaxTMI 
2018 (7) TMI 373
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....rary to facts & law. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition of Rs. 70,99,120/- made by the AO on account of payments to Linde AG (Holding Company) being capital in nature. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition of Rs. 16,18,173/- made by the AO u/s 40(a)(ia) r.w.s. 195 of the I. T. Act. 4. On the facts and in the circumstances of the case and inlaw, the learned CIT(A) has erred in deleting the addition of Rs. 20,95,97,726/- made by the AO u/s 69 of the IT Act ignoring the finding given by the AO and directing to withdraw credit of TDS amounting to Rs. 27,07....
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....income. 2.2. Ld. AO observed that assessee made certain payments to its holding company M/s Linde AG, Germany under the head 'license expenses'. It was observed by Ld. AO that these expenses were incurred by assessee towards infrastructure of WAN and local hardware and also for development of piping material management, development of documentation etc. Ld. AO treated these expenses as capital in nature, as he was of the opinion that enduring benefits accrued to assessee. 2.3. Ld.AO also made disallowance under section 40 (a) (ia) of the Act as assessee failed to deduct TDS on certain payments made to foreign holding company. Disallowance was made on the basis of certain mismatch of TDS claimed by assessee to the extent of Rs. 20,9....
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....run the business effectively and efficiently by assessee, and therefore has to be treated as revenue in nature. 7. We have perused the submissions advanced by both the sides in the light of the records placed before us. 8. In our opinion assessee incurred license expenses towards WAN and local hardware, annual fee which has been treated by Assessing Officer to be capital expenditure. It is observed that assessee has to incur these expenses annually on which tax has been deducted. Assessee claimed license expenses of Rs. 49,62,461/-in Profit and Loss account for the year under consideration out of total invoice amount of Rs. 83,51,907/-. We agree with the observation of Ld. CIT (A) that the license expenses incurred by assessee do not ....
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....ding company, on which no TDS was to be deducted. He drew our attention specifically towards nomenclature of expenses, as submitted by assessee and reproduced by Ld. AO in assessment order. Ld. CIT DR thus submitted that Assessing Officer has not got opportunity to verify whether these payments were in the nature of reimbursement or not. He submitted that Ld. CIT (A) without remanding the issue back to Ld. AO deleted addition merely by accepting submissions of assessee. He requested for the issue to be set-aside to Ld. AO for proper verification. 13. Ld.AR could not controvert the contradiction in the nomenclature of the expenses in submissions before Ld. AO as well as before Ld. CIT (A). He did not object for the issue being set aside t....
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....t-aside to Ld. AO for due verification. 17.3. Ld.AR could not controvert the fact that TDS has been claimed on certain advances which did not form part of total income. He did not object for the issue being set aside to Ld. AO. 18. We have perused the submissions advanced by both the sides in the light of the records placed before us. 19. Considering the totality of facts as well as contradiction in nature of payment, we are of considered opinion that it would be justifiable to set aside this issue to Ld. AO. Assessee is directed to file reconciliation of income vis-a-vis the TDS claimed. Ld. AO shall verify the relevant details filed by assessee and allow the claim as per law. 20. Accordingly this ground raised by revenue stand....