Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (11) TMI 97 - AT - Income TaxDisallowance of payments made to IIT Chennai - assessee is a company in the business of software development - assessee had made donations to IIT, Chennai - assessee submitted that the assessee indeed derived benefit on revenue account as is evident from the MOU entered by the assessee with IIT, Chennai – Held that:- Association of assessee with IIT, Chennai was for conducting research and creating technology that would bring benefits of Information and computing technologies to the populations of countries with developing economies and developing markets - expenditure incurred by the assessee is not of enduring nature but of revenue nature and the same has been incurred due to commercial expediency of the assessee’s business - AO directed to allow the claim of the assessee being payment made to IIT, Chennai – In favor of assessee Disallowance of provision for employee loyalty bonus - assessee had a scheme for its employees under which an employee is entitled to claim certain sums from the company upon completion of three years of service – Held that:- Liability to pay loyalty bonus to the employees, for whom provision has been made by the assessee in the accounts, is the liability in praesenti though it will be discharged at a future date. Thus it is not a contingent liability and is an ascertained liability. Once it is an ascertained liability and provision has been made in the accounts of the assessee who follows the mercantile system of accounting, the claim of the assessee has to be allowed - in favour of the assessee Addition - taxability of amount received - income had arisen to the assessee on account of the compensation of Rs.12,20,00,000/- received by assessee for recruiting certain employees by way of transfer from another company M/s.Verifone - CIT(A) obtained a remand report from the AO and upon consideration of the same concluded that the AO was justified in treating such receipt as income from other sources – Held that:- Issue results in huge addition of around 12 crores. We find from the record that for confirming such huge addition, the CIT(A) has not passed a speaking order though he concurred with the AO - appellate order that the CIT(A) has simply mentioned that the assessee has relied on case-laws, the facts of which are different from the instant case - appellate authority ought to have discussed about the caselaws relied upon and given his reasons as to how they are not applicable to the present facts and circumstances. This is most required for the reason that the next appellate authority has to see whether the first appellate authority has applied his mind properly or not – matter remanded to the file of the CIT(A)
|