TaxTMI 
TaxTMI 
2018 (8) TMI 2086
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....the course of assessment proceedings, the Assessing Officer disallowed 7.5% of expenses under the head "Travel & Conveyance Expenses" on purely adhoc basis and to take care of, what he termed as, 'expenditure - personal in nature'. When he did so, he also took note of similar disallowances made in the past. Aggrieved, assessee carried the matter in appeal before the learned CIT(A) but in vain. Not satisfied, the assessee is in second appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 5. We have noted that the disallowance has been made on the ground that the expenses are personal in nature. That is exactly what the Assessing Officer states in the impugned assessment order, and he also specifically follows the orders, on that issue, in the preceding assessment year. On this aspect, however, we have Hon'ble jurisdictional High Court's judgement in the case of Sayaji Iron & Engineering Company Limited vs. CIT [(2002) 253 ITR 749 (Guj)] which observes as follows :- "In our opinion, as the directors of the assessee were entitled to use the vehicles of....
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....tors, "even if they are personally used by the directors" the vehicles are personally used by the company, because a limited company by its very nature cannot have any "personal use". The limited company is an inanimate person and there cannot be anything personal about such an entity. The view that we are adopting is supported by the provision of section 40(c) and section 40A(5) of the Act." 6. Respectfully following the esteemed views of Hon'ble jurisdictional High Court, we uphold the plea of the assessee and delete the impugned disallowance. 7. Ground no.1 is thus allowed. 8. Ground no.2 is not pressed and is dismissed as such. 9. In ground no.3, the assessee has raised the following grievance:- "Ground No 3 - Addition of Income reflected in Form 26AS a. The learned CIT(A) has erred in holding that amount of Rs.3,37,791/- incorrectly reflected in Form 26AS ought to be included in income even though it has not been received by the Appellant." 10. The impugned addition was made solely on the basis of the information appearing in Form 26AS. While the interest income from State Bank of India, as per Form 26AS, was said to be Rs.4,48,161/-, the asses....
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....ssessee has made various payments, on account of MIS Services Cost Allocation, Corporate Allocation Charges and Legal Expenses, aggregating to Rs 2,47,13885 to its US based associated enterprise by the name of Berry Plastic Corporation Inc. Incidentally, in this case, a reference was made to the Transfer Pricing Officer for determination of the arm's length price, but the price so paid was duly accepted and no ALP adjustments were proposed therein. The Assessing Officer was, however, of the view that these amounts are not deductible in computation of business income, as the assessee has failed to deduct tax at source from the same, and, disallowance under section 40(a)(i), therefore, comes into play. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. It was argued by the assessee at length, as evident from the detailed extracts from the written submissions as reproduced in the impugned order, that the income embedded in these payments were not taxable in India under the India-USA Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion [(1991) 187 ITR (St.) 102] (Indo US tax treaty, in short) and, as such, no disallowance ....
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....endered should be of such a nature that it "makes available" to the recipient technical knowledge, know-how and the like. The service should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or knowhow on his own in future without the aid of the service provider. In other words, to fit into the terminology "making available", the technical knowledge, skill?, etc., must remain with the person receiving the services even after the particular contract comes to an end. It is not enough that the services offered are the product of intense technological effort and a lot of technical knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. Technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may require technical knowledge, skills, etc., does no....