2015 (2) TMI 1420

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....made in a 'regular' assessment framed on 20.12.2011, in proceedings under section 143(3) of the Income-tax Act, 1961 (in short the 'Act'). 2. The assessee-company manufactures and trades in metal cutting tools. It had filed its return on 29.9.2009 admitting income of 5,14,73,992/-. The same was 'summarily' processed. Thereafter, the Assessing Officer inter alia noticed the assessee's overseas commission payments amounting to 68,38,178/- without deducting TDS and also development charges incurred on lease land amounting to Rs. 9,81,191/-. He disallowed both these outgoes for want of TDS deduction and held the latter one to be of capital expenditure. 3. The CIT(A) has deleted both these disallowances. Therefore, the Revenue is in appeal. 4....

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....t agents is concerned. We find that the hon'ble jurisdictional high court in CIT vs Faizan Shoes Pvt. Ltd. [2014]367 ITR 155 (Mad) has held that such export commission payments are not in the nature of fee for technical services. The Revenue fails to point out any distinction on facts. Therefore, we uphold the CIT(A)'s findings. The Revenue's ground is rejected. 7. This leaves us with the second issue of disallowance of development expenses on SIPCOT's leased land amounting to Rs. 9,81,191/-. The assessee had occupied SIPCOT's land on lease for 99 years. It had paid development charges of Rs. 1,96,23,800/- thereupon alongwith other expenses. A bipartite agreement executed between these two entities provides as under: "14 (ii) The plo....

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....A) accepts the assessee's ground and holds as under: " 15. Admittedly, the development charges are paid in lumpsum as per lease agreement at the beginning of the lease. Clause 14(ii) also lays down that the development charges would be refunded if the lease expires before completion of lease period by deducting 5% of the amount per each year. This, it is implied that the development charges get depleted by 5% for every year of lease. In this scenario, the assessee's claim is right and acceptable. The disallowance is directed to be deleted." 10. We have heard both sides and gone through the case record. Factual backdrop of the issue already stands narrated. SIPCOT lessor has received a lumpsum development charges of Rs. 1,96,23,800/-. Its....