TaxTMI 
TaxTMI 
2019 (2) TMI 1734
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....02.2014. On service of notice of appeal, the assessee has filed Cross Objection (C.O.). The Revenue has raised the following grounds of appeal: On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below: 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance made by the AO of Rs. 1.10.91.4651- u/s. 40(a)(ia) of the Act. " 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact under the provisions of section 40(a)(ia) of the I. T. Act, the assessee is bound to deduct TDS on the paym....
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.... 4. erred in disallowing the interest paid on delayed payment of service tax without appreciating the fact that interest paid is compensatory in nature and not penal in nature and thus, the same is an allowable deduction as per the provisions of Section 37(1) of the Act; 3. At the outset of hearing, the ld. Authorized Representative (AR) of the assessee submits that the ground of appeal raised by revenue is covered in favour of assessee in assessee's own case for Assessment Year 2008-09 & 2012-13 in ITA No. 1175/Mum/2017 and in ITA No. 6151/Mum/2012 respectively. The ld. AR of the assessee also furnished the copy of decision of Tribunal for Assessment Year 2008-09 & 2012-13 dated 30.07.2018 and 11.09.2017 respectively. 4. On the other....
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.... no requirement of deducting tax at source again and accordingly it was submitted that the provisions of sec. 40(a)(ia) would not be attracted. The AO was not convinced with the said explanations and accordingly disallowed the above said amount of Rs. 38.59 lakhs u/s 40(a)(ia) of the Act. The Ld CIT(A), however, deleted the addition by observing that the Tax is not required to be deducted on reimbursements. Aggrieved, the revenue has filed this appeal. 3. The Ld D.R submitted that the assessee has not deducted tax at source from the payments made to M/s CKIL and hence the AO has rightly added the above said amount u/s 40(a)(ia) of the Act. On the contrary, the Ld A.R placed reliance on the decision rendered by Hon'ble Bombay High Cou....
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....y passing the following order: 2. The learned Counsel for the assessee relied on the Tribunal's decision in assessee's own case for AY 2012-13 in ITA No 1175/Mum/2017 order dated 11.09.2017, wherein Tribunal on exactly similar facts deleted the disallowance by observing in Para 4 as under: - "4. I notice that M/s CKIL has incurred the expenditure by way of Rent and repairs on behalf of the assessee. The Ld CIT(A) has recorded a finding that M/s CKIL has duly complied with TDS provisions at the time of making payments to the concerned payees. Thus, it is noticed that the payment by way of rent and repairs have been duly subjected to deduction of tax at source. The assessee has reimbursed the amount to M/s CKIL on which tax has already ....
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....penses of the payment of interest to P&L A/c under the head "General Expenses". During the assessment, the Assessing Officer asked the assessee to furnish the details of General Expenses. The assessee filed its reply vide reply dated 03.02.2014. The reply of assessee was not accepted by Assessing Officer holding that the delayed payment of service tax is panel in nature and is not allowable under section 37 of the Act. On appeal before the ld. CIT(A), the action of Assessing Officer was confirmed. Thus, the assessee has raised ground of appeal while filing C.O. in appeal filed by revenue. 11. We have heard the submission of the parties and have gone through the orders of authorities below. The ld. ld. Authorised Representative (AR) of the....
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....rvice tax to be charged as payment made during the course of business and wholly and exclusively for the purpose of business and the same is compensatory in nature, would not take partake on character of penalty. The ld. AR of the assessee also relied upon the decision of Delhi Tribunal in DCIT vs. Messee Dusseldorf India Pvt. Ltd. [2010] 9129 TTJ 81) (Del. ITAT). The ld. AR of assessee prayed for allowing the delayed payment. 12. On the other hand, the ld. Departmental Representative (DR) for the revenue strongly relied upon the order of lower authorities. 13. We have considered the rival submission of the parties and have gone through the orders of authorities below. The assessee has claimed to have paid the interest on delayed paymen....