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2010 (11) TMI 840 - AT - Income TaxInterest income - taxable under the head ''income from business''- HELD THAT:- We find that it is not in dispute that the assessee had to invest funds in fixed deposits and offered them as margin towards obtaining the letters of credit and other guarantees for various projects. In the case of Lok Holdings[2008 (1) TMI 365 - BOMBAY HIGH COURT] held that money received by a property developer from prospective purchases during the progress of construction and where such funds were deposited by an assessee with the bank, interest earned on such deposits was held to have arisen out of business activity and, therefore, the same had to be construed as income from business. In view of this, we are of the view that the order of CIT(A) holding that the interest income is income from business has to be upheld and dismiss ground in the appeals. claims in respect of general administrative expenses incurred by the foreign head office and foreign companies operating through branches in India - HELD THAT:- In this regard the assessee had field time sheet, on daily basis for each employee in the organization and have recorded the man hours on daily basis through ERP software.The time spent on the Indian Projects are properly segregated. The same have been-verified by the auditors and certified. In the remand report the AO has not found fault with the same. In such circumstances we are of the view that the findings of the CIT(A) have to be accepted. Once it is held that the disputed expenses are directly related to the Indian Project then the provisions of section 44C will not come into operation. In this view of the matter, we do not find any infirmity in the order of the CIT(A) and Ground No. 2 of the revenue in both the appeals are dismissed. services provided by Samsung Corporation is not technical in nature and hence, the fees received cannot be taxed in India in absence of PE in India - HELD THAT:- Admittedly the payments were made by the assessee to Samsung Engineers through the head office outside India and since the services were also rendered outside India no income cart be said to accrue or arise in India and, therefore, the payments in question are not chargeable to tax in India. In these circumstances’ there was no obligation on the part of the assessee to deduct tax at source. Consequently, the provision of section 40(a)( i) were not applicable. In the circumstances the disallowance made by the AO was rightly deleted by the CIT(A). We do not find any ground to interfere in the findings of the CIT(A). Consequently, the ground raised in both the appeals are dismissed. Barauni is a well established township - clauses of Rule 6 DD are not applicable - HELD THAT:- The CBDT in Circular No. 220 dated 31-5-1977, has clarified that certain cash payments made in certain circumstances will not be hit by the provisions of section 40-A(3). Therefore, we are of the view that the disallowance u/s 40A(3) deleted by the CIT(A) was right and deserves to be confirmed and the Department’s appeal on this point also is dismissed.
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