TaxTMI 
TaxTMI 
2018 (12) TMI 752
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....assessment it was claimed that none of the payments were above Rs. 20000/- to single party and in appeal the appellant claimed that payment is made to Government agencies/Local Authorities. 3. The Learned Commissioner of Income Tax (Appeals) erred in confirming the addition due to unexplained credit u/s.68 aggregating to Rs. 22,00,000/- to total income for want of evidences to prove identity, credit worthiness and genuineness of loan transactions. 4. The Learned Commissioner of Income Tax (Appeals) failed to appreciate the contention that confirmations, Pan card in most of the cases. 5. The Learned Commissioner of Income Tax (Appeals) erred in confirming addition of Rs. 73,725/-on account of interest paid to the said parties due to genuineness of the loan transactions could not be proved . 6. The Learned Commissioner of Income Tax (Appeals) failed to appreciate that the Appellant had deducted Tax Deducted at Sources where-ever applicable on the interest paid to the said parties. The grounds urged by revenue reads as under:- 1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the additio....
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....dition u/s 40A(3) 19,52,521/- 2.1 Facts germane to the issue are that during assessment proceedings, it was noted that the assessee made certain payments on account of training fees, survey fees and royalty payments as per the following details:- No. Nature of Payment Amount (Rs.) 1. Training fees Rs.24.52 Lacs 2. Survey fees Rs.36.57 Lacs 3. Royalty payments Rs.27.13 Lacs The assessee vide letter dated 20/12/2011 submitted that obligation to deduct tax arises only when the recipient has a tax liability in India. It was further submitted that training fees was paid to persons who had no business establishment in India and the payment was on account of engineers being trained and approved by manufacturers for which the assessee was authorized service provider. The payment on account of survey fees were stated to be made on the strength of Nil rate certificate. Regarding royalty payment, it was submitted that foreign party did not have permanent establishment in India and the aforesaid payment included commission paid by the assessee to non-resident for services rendered outside India and therefore the income in that respect did not accrue....
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....1 Aggrieved, the assessee contested the same with partial success before first appellate authority vide impugned order dated 19/02/2013 wherein the assessee explaining the nature of royalty payments submitted that the same represented service charges / fees paid to foreign company who had no permanent establishment in India and the services were provided from outside India. The aforesaid payment, as per the submissions, were not royalty payments within the meaning of explanation-2 to Section 9(1)(vi) and therefore, did not require deduction of tax at source. With regard to training fees, it was submitted that the expenditure was in the nature of training imparted to the assessee's personnel on their visit to foreign suppliers for understanding the basic feature of the product supplied by them which then enables the skilled personnel to perform the services in India in a more qualitative manner. Thus the aforesaid payment, as per the submissions, were in the nature of training fees to cover the expenses and other charges and therefore, not covered u/s 9(1)(vii). Regarding survey fees, it was submitted that the life savings equipments were required to be serviced periodically to ensu....
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....ns details etc. Upon perusal of details filed by the assessee, it was found that the assessee failed to substantiate the 20 loan creditors aggregating to Rs. 22 Lacs, the details of which have been extracted in para 7.11 of the impugned order. However, the assessee, in the opinion of Ld. CIT(A), was able to provide sufficient documentary evidences with respect to balance loan creditors and therefore, the addition with respect to those creditors deserved to be deleted. Finally, the addition to the extent of Rs. 22 Lacs against 20 creditors and corresponding interest against the same amounting to Rs. 73,725/- was confirmed whereas the balance additions was deleted. 3.3 Against addition u/s 40A(3), the assessee pointed out that consolidated entries in the ledger account was made from petty cash / expense registers for expenditure incurred on different dates and therefore, there was no violation of Section 40A(3). It was also submitted that few payments were made thorough banking channels. The Ld. CIT(A), by observing that Ld. AO failed to call for further details from the assessee in this regard, deleted the additions. 3.4 Aggrieved by the aforesaid stand of first appellate auth....
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....an aggregating to Rs. 256.75 Lacs from as many as 106 parties and was under an obligation to prove the identity, genuineness & creditworthiness of these parties before the revenue authorities with documentary evidences. The assessee, during assessment proceedings, failed to provide sufficient documentary evidences to prove the same. From the details extracted in para-6.4 of the quantum assessment order, it emerges that the assessee failed to provide even the basic details like PAN / addresses of few lenders despite being under debt and paying interest to them after deduction of tax at source. The loan confirmations with respect to as many as 38 parties were not even signed by the lender. Further, financial documents like Balance Sheet, Profit & Loss Account & Statement of Affairs etc. was not filed by the assessee in most of the cases. Even during appellate proceedings, the assessee failed to substantiate the 20 loan creditors which negate the very proposition that adequate time frame was not granted to the assessee to supply the requisite documentary evidences. At the same time, a plea was raised by the assessee that the details be called for by Ld. AO by way of issuance of summon....