TaxTMI 
TaxTMI 
2018 (9) TMI 1406
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....es of the case and in law, the Ld. CIT (A) erred in directing the AO to allow the entire DMA commission as a deduction against the income of the year without appreciating the ratio of the decision of the Apex Court in the case of Madras Industrial Investment Corporation [225 ITR 802] in which it was held that only proportionate expenditure vis-a-vis revenue on a matching principle should be allowed, since allowing the entire expenditure in one year would give a distorted picture of the profits of a particular year." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in deleting the proportionate disallowance of Rs. 36,84,248/- on account of expenses on issue of NCDs without appreciating that this issue stands squarely decided in favour of the Revenue by the Hon'ble Apex Court in Madras Industrial Investment Corporation [225 ITR 802]." 2.1 "On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in deleting the proportionate disallowance of Rs. 36,84,248/- on account of expenses on issue of NCDs by relying on the decision of the Rajasthan High Court in the case of Udaipur Vs. Secure Meters Ltd. 321 ITR 611 wi....
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.... (hereinafter referred to as the "learned CIT(A)") has preferred this appeal on the following ground, which are without prejudice to each other: 1. Disallowance of expenditure U/S.14A The learned CIT (A) has erred in law and in facts in confirming the disallowance u/s. 14A of the Income Tax Act, 1961 ("the Act") read with rule 8D of the Income Tax Rules, 1962 ("the Rules") The learned CIT(A) ought to have appreciated that there is no nexus of expenses incurred with the exempt income. The learned Assessing Officer has erred in disregarding the . . decision of the Bombay High Court in the case of Godrej & Boyce Mfg. Co. Limited, mandating him to establish the fact that expenditure has been incurred. Further the learned Assessing officer has also disregarded the decision in the case of Reliance utilities and Power Ltd, wherein the Bombay High court had observed that "if there be interest free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan, it can be presumed that the investments were from the interest free funds available", The Appellant craves leave to add, to alter, delete or substitute all or any of the....
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....ts return of income for A.Y. 2008-09 on 30.09.2008 declaring total income of Rs. 56,96,93,100/-. In the assessment order u/s 143(3) dated 09.12,2010, the Assessing Officer added the following amounts with the returned income : i) Excess depreciation claim disallowed Rs. 65,66,448/- ii) Provision for Bhavishya Kalyan Yojana Contribution Rs. 3,26,000/- iii) Provision for Leave Encashment Rs. 62,44,000/- iv) Disallowance u/s. 14 of the I.T. Act Rs. 17,066,000/- v) Disallowance of Non-convertible debenture expenses Rs. 36,84,248/- 6. The A.O. also disallowed the claim of DMA commission of Rs. 110,90,73,76s/- and allowed DMA commission of Rs. 91,66,45,456/-debited in the books of accounts. 7. By the impugned order, CIT(A) allowed assessee's claim of Direct Marketing Agent's Commission in the A.Y.2007-08, 2008-09 and 2011-12, against which Revenue is in further appeal before us. 8. We have considered rival contentions and found that Direct Marketing Agent's Commission was allowed by CIT(A) after following the decision of Delhi High Court in the case of Citi Financial Consumer Finance Ltd., and ITAT Ahmedabad Special Bench in the case of Ashima Syntex 117 ITD 1. Fro....
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....tire expenses is not allowable in the present A.Y. In this connection, the A.O. relied upon the decision of the Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd., 12. As discussed above this issue is concluded in favor of the Assessee by the decision of the Supreme Court in the case of Taparia Tools Limited [2015] 372 ITR 605, where, after considering its decision in the case of Madras Industrial Investment Corporation [1997] 225 ITR 802, the Supreme Court has held that expenditure incurred during a particular year has to be allowed in frill in that year itself. 13. Respectfully following the proposition of law laid down by Hon'ble Supreme Court in the case of Taparia Tools Ltd., we do not find any infirmity in the order of CIT(A) for allowing NCD issue expenses during the A.Y.2008-09. 14. In the result, Ground No.2 raised by Revenue in its appeal for A.Y.2008-09 is dismissed. 15. In the A.Y.2007-08, assessee is aggrieved for disallowance of provision for leave encashment u/s.43B(f) of the Income Tax Act, 1961. 16. We have considered rival contentions and found that Post retirement benefit scheme was treated by the AO in the nature of a fun....
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....ng the retirement age or resigning after having rendered services for specified years. Thus, where the liability on this account accrues from year to year, the same is payable on retirement/ resignation of the eligible employees. In view thereof, the ratio of the judgment of the Supreme Court in Metal Box Company of India Ltd. v. Their Workmen [1969] 73 ITR 53 (SC) and Bharat Earth Movers v. CIT [2000] 245 ITR 428 (SC) would clearly get attracted. Respectfully following the decision of the Delhi High Court, we do not find any merit for the disallowance so made by the lower authorities. 21. Last grievance of assessee relates to disallowance of Rs. 14,98,594/- u/s. 40(a)(ia) of the Act for non-deduction of TDS on account of reimbursement of advertisement and training expenses incurred by the assessee's dealers. 22. Rival contentions have been heard and record perused. The facts of the case are that A.O. has disallowed Rs. 14,98,594/- u/s. 40A(ia) holding that assessee has not made any TDS on these payments. It has been disputed by the assessee claiming that these are reimbursement expenses. 23. By the impugned order, CIT(A) confirmed the action of the AO after observing as under:-....