TaxTMI 
TaxTMI 
2019 (9) TMI 813
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....levant proceedings in both assessment year(s) are u/s 143(3) of the Income Tax Act, 1961; in short 'the Act'. Heard both the parties. Case file(s) perused. 2. We come to Revenue's appeal ITA No.2128/Kol/2013. Its sole substantive grievance is that the CIT(A) has erred in law and on facts in reversing the Assessing Officer's action disallowing aassessee's scientific expenditure incurred on research and development amounting to Rs.1,85,49,462/- during the course of assessment. The CIT(A)'s findings under challenge to this effect read as follows:- "4. I have considered the finding of the A.O. in his order dt. 31-12-2010 and the written submission filed by the A.R. during the appellate proceeding. Appeal on ground no. is against non-consideration of revised income by the A.O. during the appellate proceeding the A.R. submitted that assessee does not intend to press this ground. Accordingly, appeal on this ground is dismissed. 5. Appeal on grounds no. 2, 3 and 4 are against the disallowance of Rs. 44,29,779/- as depreciation on WDV of intangible asset being trade mark and brand. The A.O has given his finding that the cost attributed towards intangible assets is no....
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.... appeal on grounds no. 5, 6 and 7 are dismissed. 7. Appeal on grounds no. 8 to 11 are against the disallowance of Rs. 79,42,598/- made by the AO. under Rule 8D read with Sec 14A of the IT. Act, 1961 as expenses in order to earn exempted income. The AR. has submitted that the assessee has not incurred expenditure in order to earn exempted income. I have considered the finding of the A.O. and the written submission filed by the A.R. I find that assessee's argument on this issue cannot be accepted. Because after the amendment in Sec.. 14A inserted in the Finance Act, 2006 w.e.f. 01-04-2007 the Act says 11 the Assessing Officer shall determine the amount of expenditure lncurrec in relation to such income ..... " Thus, it is clear that this provision is mandatory as per the statue book. Therefore, calculation of expenditure under Rule 8d read with Sec. 14A w.e.f. A.Y. 2008-09 is justified. Hence, assessee's appeal on grounds no. 8 to 11 are dismissed. 8. Appeal on ground no. 12 to 14 are against the disallowance of Rs. 10665536/- u/s. 40(a)(ia) in respect of cash discount allowed to customers. The A.O. in the assessment order has given his finding that the disc....
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.... there is an arrangement/understanding between the appellant and the growers. But all acts, deed and things relating to cultivation ad harvesting of un processed seeds are carried out by the growers in their own right at their own cost and risk and on their own land. I have considered the finding of the A.O and the written submission filed by the AR. I find that it is true that all acts, deeds and things relating to cultivation, harvesting and processing of seeds are carried out by cultivators on their own risk, on their own land and at their own' cost. But there is no denying the facts that cultivators do so with understanding/contract between the assessee and themselves (seed growers/cultivators). Therefore, the assessee should have deducted tax at source u/s. 194H of the I.T. Act, 1961 in this case. Accordingly, assessee's appeal on grounds no. 19 to 21 ore dismissed. 11. Appeal on ground no. 22 to 26 are against the disallowance of deduction u/s. 35 of Rs. 18549462/-. The AO has given his finding that equipments used by the assessee at its research centers of development of new hybrid seeds can also be used by the assessee in the ordinary course of bus....
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...., ladiesfinger brinjal, gourds &melons etc. in latter line of seed development business. 6. Case file suggests that the assessee had submitted a list of 246 parties / payees. The Assessing Officer's observed in his assessment order dated 31.12.2010 that the assessee had not furnished complete addresses of 109 out of said 240 parties involving the sum in question of Rs.90,53,492/-.He therefore was of the view that the said 109 parties could not be put to confirmation either u/s 131 summons u/s 133(6) notice. And also that the assessee had not placed on record their PAN details & bank statements as well. The assessee's gross credit figure in case of all 109 parties involved a sum of Rs.6,21,48,167/- against the closing balance of Rs.90,53,492/-. The Assessing Officer therefore treated the latter sum as unexplained sec. 68 of the Act. The CIT(A) has upheld the same in his lower appellate discussion. 7. We have given our thoughtful consideration to rival pleadings on the instant first issue. The assessee-company; admittedly engaged in seed development and procurement thereof in various crops and vegetable, does not own any land for the purpose of field trials in research developm....
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....ively. There is no dispute that the assessee's relevant exempt income derived from dividend reads an amount of Rs.416,41,398/- as against its suo motu disallowance of Rs.3.26 lac only. Paper book page 43 suggests that the assessee had held shares in M/s J.K.Paper Ltd. M/s Ashim Investment Co. Ltd., J.K. Industries Ltd. & JK Lakshmi Cement Ltd. involving 6675248, 758057, 4525553 and 6822520 units earning dividends of Rs.2.25, 1, 2.7 and 2 per share; respectively. Suffice to say, both the lower authorities have computed impugned proportionate interest and administrative expenditure disallowance as per the statutory formula in Rule 8D of the Income-tax Rules, 1962. 10. Learned authorized representative vehemently submits during the course of hearing that both the lower authorities have erred in law and on facts in invoking the impugned disallowance u/s.14A r.w.s Rule 8D disallowance during the course of assessment as well as in lower appellate proceedings. We are taken to pages 44 to 81 in paper book containing the relevant amalgamation scheme(s) approved by hon'ble jurisdictional high court in company application No.16 of 2003 regarding transfer of investments of the above sta....
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....pugned administrative expenditure disallowance. This second substantive grievance is taken as partly accepted in foregoing terms. 13. Next comes the assessee's third and last grievance of sec. 194H r.w.s 40(a)(ia) disallowance of Rs.1,13,52,917/- on account of its failure in deducting TDS on seed purchases treated as brokerage and commission payments in both the lower proceedings. The CIT(A)'s detailed discussion on the issue reads as under:- "10. Appeal on ground no. 19 to 21 are against the disallowance of Rs. 1,13,52,917/- on account of failure to deduct tax u/s. 194H of the I.T. Act, 1961. The AO has held that the real character of transaction between the assessee and the seed growers is of a principle agent nature of relationship. Therefore, the assessee should have deducted tDS on payments to seed growers. During the appellate proceeding the AR has submitted that although there is an arrangement/understanding between the appellant and the growers. But all act, deed and things relating to cultivation and harvesting of unprocessed seeds are carried out by the growers in their own right, at their own cost and risk and n their own land. I have considered the finding o....