TaxTMI 
TaxTMI 
2017 (3) TMI 1688
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....age u/s 37 of the Act without any proper material on record specially when the purchasers categorically informed that there was no agent involved in the contract? 2. Whether in the facts and circumstances of the case the ITAT was justified in law and acted perversely in allowing claim of depreciation and additional depreciation u/s 32 on pick and place machine despite of the fact that the same was not solely used for inhouse research and development facility but was simultaneously used for the purpose of business? 3. Whether in the facts and circumstances of the cased the ITAT was justified in directing to treat the sales tax incentive as a capital receipt despite of the fact that the same was a constructive payment for the purpose of section 43B of the IT Act? 4. Whether in the facts and circumstances of the case the ITAT was justified in law and acted perversely in allowing the claim of the assessee u/s 80JJAA without considering the facts of the case, particularly when no such claim had been made in the return? 4. The facts of the case are that the assessee company is engaged in design, manufacturing and sale of electronic energy meters invertors hybrid micro circuits pri....
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....which was paid was after 06.03.2003 which is the last month of the accounting year. In that view of the matter, the Assessing Officer while considering the same has rightly not allowed the commission which is paid and the same was affirmed by the CIT(Appeals) and the Tribunal only for the first time has reversed the same. 8. Counsel for the department has also taken us to the paragraphs 48 and 51 of the judgment of the Tribunal in D.B. Income Tax Appeal No.327/2005, which read as under:- "48. From the facts discussed above, it is obvious dthat in the result it would be diffucult to conclude as has been done by the Revenue Authorities that no service were rendered by the commission agents to the assessee. Assessee's sales/ supplies have shown enormous increase and there is substantial and asbnormal increase in income of the assessee. There is documentary evidence to show that the assessee and various parties/commission agents had agreed on some terms and conditions on the basis of which payments of commission is claimed by the assessee. All the parties/ commission agents are existing income tax assessees and they are identifiable and verifiable and they have confirmed the payme....
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....e three lower Authorities came to the conclusion that no services were rendered by the Sub-brokers, there was no necessity to engage 8 services of Brokers/Sub-brokers in the light of the agreement with the Principal Company, and further not a single penny was paid to the Subbrokers for years together. One is required to arrive at the conclusion on the basis of human probability. Human probability cannot be ignored for persons like Sub-brokers or men of no means who render services to some but do not receive any amount for years together. None would leave hard earned money, for their day to day needs if actual services have been rendered by the said persons. It was upon the appellant to discharge the onus which heavily lay on him and he miserably failed for the reasons stated herein before. The Hon'ble Apex Court,in the Case of CIT Vs.Durga Prasad More (Supra), has observed as under:- "Now coming to the question of onus,the law does not prescribe any quantitative test to find out whether the onus on a particular case has been discharged or not. It all depends on the facts and circumstances of each case. In some cases, the onus may be heavy whereas, in others, it may be nominal....
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....ts; the affidavits filed by C. Janakiraman and Shri A.N. Ramachandra Nayar, husbands of the two lady partners of RJ Associates and also the payments made by the assessee to RJ Associates as well as to Golden Enterprises. The question that was posed by the High Court was whether acceptance of the agreements, affidavits and proof of payment would debar the assessing authority to go into the question whether the expenses claimed would still be allowable under Section 37 of the Act. This is a question which the High Court held was required to be answered in the facts of each case in the light of the decision of this Court in Swadeshi Cotton Mills Co. Ltd. Vs. Commissioner of Income Tax4 and Lachminarayan Madan Lal vs. Commissioner of Income Tax West Bengal. In fact the High Court noted the following observations of this Court in Lachminarayan (supra) : "The mere existence of an agreement between the assessee and its selling agents or payment of certain amounts as commission, assuming there was such payment, does not bind the Income Tax Officer to hold that the payment was made exclusively and wholly for the purpose of the assessee's business. Although there might be such an agreeme....
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....herwise allowable under this Act in respect of- (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, or (c) any sum referred to in clause (ii) of sub-section (1) of section 36, or (d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution or a State financial corporation or a State industrial investment corporation, in accordance with the terms and conditions of the agreement governing such loan or borrowing , or (e) any sum payable by the assessee as interest on any loan or advances from a scheduled bank in accordance with the terms and conditions of the agreement governing such loan or advances, or (f) any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee, [or] Following clause (g) shall be inserted after clause (f) of section 43B by the Finance Act, 2016, w.e.f. 1-4-2017 : (g) any sum payable by the as....
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....ction in respect of any sum referred to in clause (e) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1996, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him. Explanation 3B.-For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (f) of this section is allowed in computing the income, referred to in section 28, of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 2001, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him. Explanation 3C.-For the removal of doubts, it is h....
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....s Ltd., reported in (2012) 80 CCH 0055 Delhi HC, in particular para 9, which reads as under:- Para 8, 9 and 10 of the judgment in Commissioner of Income Tax-III Vs. Nirma Ltd.(supra): "8. On the other hand, Mr. Soparkar, learned counsel appearing for the respondent contended that so far as Tax Appeal No. 226 of 2010 is concerned, after discussing the evidence on record, the Tribunal has followed earlier decision and discussed the issue in detail in para 54 and 55 of its decision, which reads as under:-- "54. Per contra, the learned D.R. Supported the orders passed by the Assessing Officer and the learned CIT (A). Referring to the judgment in Sahney Steel and Press Works Limited v. CIT, 228 ITR 253 (SC), he submitted that the impugned sales tax exemption increased the profits of the assessee by eliminating the expenses which the assessee would have had to incur later and therefore the impugned receipts were in the revenue field. He also referred to Explanation (10) to Section 43(1) of the Income Tax Act inserted in with effect from 01/04/99 to emphasise that the action of the assessee in not reducing the cost of assets by the amount of subsidy for working out the Written Down ....
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....pecial modernization of its existing industry. 13. In a recent decision dated 28th January 2013 in Tax Appeal No. 450 of 2012 and connected appeals, we had an occasion to examine the nature of incentives received by the assessee from the State Government in the form of entertaining tax waiver for setting up multiplexes. In such context, we had in wake of the revenues contention that the receipt was revenue in nature, held and observed as under: "From the provisions of the said scheme, it clearly emerges that the subsidy though computed in terms of sales tax deferment or waiver, in essence it was meant for capital outlay expended by the assessee for set up of the unit in case of a new industrial unit and for expansion and diversification of an existing unit. As noted, such subsidy was available only to a new industrial unit or a unit undertaking expansion or diversification. Fixed capital investment has been defined as to include various investments in land under use, new construction, plant and machinery etc. The entitlement was related to percentage of fixed capital investment. It is undoubtedly true that such subsidy was computed in terms of sales tax deferment and necess....
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....etermined, having regard to the purpose for which the subsidy is given. The source of find is quite immaterial. If the purpose is to help the assessee to set up its business or complete a project the monies must be treated as having been received for capital purposes. Such But if monies are given to the assessee for assisting him in carrying out the business operations and given after the satisfaction of the conditions of commencement of production, such subsidy must be treated as assistance for the purpose of the trade." Para 9 of the judgment in Commissioner of Income Tax Vs. Ram Pistons & Rings Ltd.(supra):- "9. The conclusion reached by the tribunal is a finding of fact. The tribunal weighed the evidence before them and on preponderance of possibilities has accepted the claim/contention of the respondent-assessee. The contention of the Revenue is that the existence of the agency agreement, payment to thew agent did not prove and establish that the commission paid was an allowable expense under Section 37 of the Act. However, the contention does not notice that the tribunal has not merely relied on the agreement and the actual payment, but has accepted and agreed that evide....