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TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1074
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....ction. In this regard, it is submitted that the appellant company has deducted TDS on such facility fees u/s. 194C (i.e. @2%) of the Act, while as per the AO, TDS ought to have been deducted u/s. 194I (i.e. @10%) of the Act. Accordingly, the facility fees has been disallowed wrongly invoking the provisions of Section 40(a)(ia) of the Act by the AO. 3. Briefly stated, the facts of the case are that the assessee filed its return of income for the assessment year (AY) 2010-11 on 15.10.2010 declaring total income of Rs.Nil after setting off brought forward business loss of Rs. 4,91,03,204/-. Further, the assessee disclosed book profit of Rs. 4,29,84,450/- u/s 115JB of the Act. During the course of assessment proceedings, the AO observed that the following expenses claimed by the assessee were found to have attracted the provisions of section 40(a)(ia) of the Act : - Payment of facility fees of Rs. 64,34,560/- - Commission to foreign agents of Rs. 9,17,999/- - Labour charges of Rs. 2,67,803/- In respect of facility fees, the AO noted that the assessee has debited Rs. 79,41,600/- in the P&L account in connection with M/s Avadh Reality Services Pvt. Ltd....
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....on 1206/M/2018, DCIT v. Beekaylon Syn. P. Ltd. (ITA No. 6506/M/2008). On the other hand the Ld. Departmental Representative (DR) supports the order passed by the Ld. CIT(A). 5. We have heard the rival submissions and perused the relevant materials on record. In S.K. Tekriwal (supra), the assessee deducted tax u/s 194C(2) from payments made to sub-contractors. According to the revenue, the payments were in the nature of machinery hire charges falling under the head "rent" and the provisions of section 194I were applicable. On the ground that the assessee had deducted tax at 1% u/s 194C(2) as against the actual deduction to be made at 10% u/s 194C(2) as against the actual deduction to be made at 10% u/s 194I, the payments were disallowed proportionately invoking the provisions of section 40(a)(ia). The Tribunal held that where tax was deducted by the assessee, though under a bonafide wrong impression under wrong provisions, the provisions of section 40(a)(ia) could not be invoked and that if there was any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various tax deduction at source provisions, the assessee co....
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..... In this regard reliance is placed by him on the decision in GE India Technology Centre (P.) Ltd. v. CIT 327 ITR 456 SC, ACIT v. NGC Network (I) Pvt. Ltd. 1382/M/2014 and Channel Guide India Pvt. Ltd. v. ACIT 153 TTJ (Mum) 432. On the other hand, the Ld. DR relies on the order passed by the Ld. CIT(A). 9. We have heard the rival contentions and perused the relevant materials on record. In the case of GE India Technology Centre (P.) Ltd. (supra), it is held that a person paying interest or any other sum to a non-resident is liable to deduct tax u/s 195 only if such sum is chargeable to tax in India and not otherwise. In the instant case, following the above decision we delete the disallowance of Rs. 9,17,999/- made by the AO and allow the 2nd ground of appeal. 10. 3rd ground of appeal The CIT(A) erred in confirming the disallowance made by the AO of the labour charges to the extent of Rs. 2,67,803/- on account of non- deduction of TDS by invoking the provisions of Section 40(a)(ia) of the Act. Without prejudice, CIT(A) erred in confirming the addition made by the AO of labour charges of Rs. 2,32,872/- (which has been capitalized by the appellant compan....
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.... a. The CIT(A) erred in confirming the disallowance of loss on sale of returned goods of Rs,12,94,653/- made by the AO without understanding the facts of case. In this regard, it is submitted that the appellant company has debited to the Profit & Loss Account, the amount of profit element involved in the materials supplied during the year under consideration to the Director General & Inspector General of Police, Karnataka which was returned by the said party and hence no such profits can be held to be taxable for the year under consideration. Therefore, it is prayed that such addition should be deleted. b. The CIT(A) erred in confirming the calculation of the Book Profit as per Section 115JB of the Act as calculated by the AO, and erred in making addition of loss on sale of returned goods to the extent of Rs. 12,94,653/- by considering the same as unascertained liability. The said loss can never, by any stretch of imagination, be construed as unascertained liability and accordingly cannot be added said loss to the Book Profit for the year under consideration. 15. In a nutshell, the facts are that during the AY 2010-11, the assessee had sold goods to the Karnataka ....
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....mari Kasliwal is the wife of Shri Shambhukumar S. Kasliwal, who is a Director of the assesseecompany. During the course of assessment proceedings, the assessee submitted that Shambhukumar S. Kasliwal has travelled to visit Klopman International for purchase of Spinning Machinery and that the deal was finalized in FY 2010-11 relevant to the AY 2011-12. However, the assessee failed to file any evidence that it was due to Shri Shambhukumar S. Kasliwal's visit to Switzerland along with his wife to finalize a deal for purchase of Spinning Machinery from M/s Klopman International. As the assessee failed to explain the business exigency in undertaking a foreign visits, the AO made a disallowance of Rs. 7,03,559/-. In appeal, the Ld. CIT(A) confirmed the above disallowance made by the AO. 20. Before us, the Ld. counsel for the assessee submits that the company has started export in only the last couple of years. It is stated that it is not necessary that every country a person visits, one gets orders; many a times the assessee gets contacts from which it gets orders from other countries. It is further explained that the assessee has made exports to countries, where none from the c....