TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 352
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....enance of food processing machines, filed its return for Assessment Year 2011-12 on 28.11.2011 and subsequently a revised return of income on 24.08.2012 declaring income of Rs. 11,82,67,813/-. The case was taken up for scrutiny for this Assessment Year and the assessment was concluded under section 143(3) of the Income Tax Act, 1961 (in short 'the Act') vide order dated 23.03.2015 wherein the assessee's income was determined at Rs. 26,49,55,970/-. The assessee's appeal was disposed off by the CIT(A)-1, Bangalore vide order dated 31.08.2015. 3. Aggrieved by the order of CIT(A)-1, Bangalore, dated 31.08.2017, for Assessment Year 2011-12, the assessee has preferred this appeal before the Tribunal, wherein it has raised the following grounds....
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....f Rs. 5,46,848/- in the year under consideration. In the order of assessment, the AO made disallowance of Rs. 9,28,747/- under section 14A r.w.r. 8D(2)(iii)). On appeal, the CIT(A) upheld the aforesaid disallowance u/s 14A r.w.r. 8D. Before us, the assessee / learned AR were unable to controvert the orders of the authorities below to support its claim that no disallowance was called for u/R 8D(2)(iii) and therefore the following alternate argument was put forth by the learned AR. According to the learned AR, the alternate argument of the assessee is that disallowance under section 14A of the Act cannot exceed the exempt income earned by the assessee. In this regard, the Hon'ble Delhi High Court in the case of Joint Investments (P) Ltd., Vs.....
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.... had not withheld tax on such payments. The learned AR contended that the said payments were not chargeable to tax under charging sections 4, 5 and 9 of the Act since no part of the income arises in India or is received by it / on its behalf in India or is deemed to accrue or arise in India. According to the learned AR, since the agency activity of 'A V & Sons' was rendered outside India and payments were made outside India, therefore the said commission payments to 'A V & Sons' cannot be said to be taxable in India. It is contended that since no income accrues or arises in India or is deemed to accrue or arise in terms of section 5 r.w.s. 9(1)(i) of the Act, the aforesaid commission payments to 'AV & Sons' is not subject to the provisions ....
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....or arise in India as the services were rendered outside India and the payment of commission was also outside India. In this view of the matter, the assessee was not obliged to effect any deduction of tax on the commission payments to the foreign agent 'AV & Sons' who is stationed outside India. Consequently grounds 6 to 11 raised by the assessee are allowed. 7. IV Ground No.12 - Short grant of credit in respect of TDS by Rs. 2,68,927/- 7.1 In this ground (supra), the assessee contends that the AO has not granted it TDS credit to the extent of Rs. 2,68,927/- as reflected in the 26AS of the assessee. In the circumstances, as contended above, we direct the AO to examine / verify the assessee's claim that of short grant of credit for T....
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.... aforesaid claim of the Appellant, having regard to its books of accounts. The learned AO and learned CIT(A) has erred, in law and on facts, by not appreciating the Appellant's submission that Section 14A disallowance operates in respect of only those expenses which have proximate nexus with the exempt income and therefore, has erred in applying the provisions of Section 14A(3) read with Rule 8D(2)(iii) in a routine manner. Disallowance of Commission expenses amounting to INR 68,68,580 under the provisions of Section 40(a)(i) of the Act The learned CIT(A) has erred in law and on facts, in upholding the disallowance of Commission expenses amounting to INR 68,68,580 paid by the Appellant to M/s Ameejee Valleej....
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....n the taxability of such payments in India since the services rendered outside India by the non-resident agent per se does not establish business connection in India in terms of Section 9(1)(i) of the Act. Without prejudice to the above, the learned CIT(A) has failed to appreciate the settled position of law that the CBDT Circulars are binding only on the Revenue authorities and not on the taxpayers, while upholding the disallowance made by the learned AO. Short grant of credit in respect of Taxes Deducted at Source ("TDS") by INR 2,68,927 The learned AO has erred, in law and on facts, in not granting complete credit of TDS, as claimed by the Appellant in its Revised Return of Income filed for FY 2010- 1 ....