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2014 (3) TMI 1016 - AT - Income TaxTDS u/s 194H - Addition made on account of dealers commission - failure to deduct TDS on such commission - CIT(A) deleted the addition - Held that:- The amount credited by the assessee is to the provision account and not to the respective agent's accounts. Therefore, it is clear that the assessee has not made any payment to the agents. The provisions of sec.194H would apply when the payments are made to the agents or credited to the agent's accounts, whichever is earlier, and not when the payment is credited to the provision account. As rightly pointed out by the learned counsel for assessee, the agents would get vested right to receive the commission only when they fulfill the obligations under the agreement for commission. We find that the CIT(A) has properly appreciated the issue before deleting the addition made by the AO. In view of the same, we do not see any reason to interfere with the finding of the CIT(A) on this issue - Decided against revenue. Addition made on account of consultancy charges - according to the Revenue, this expenditure is capital in nature and has to be allowed u/s 35D while CIT(A) has allowed it as revenue expenditure - Held that:- The consultancy fees paid by the assessee to M/s.Mckinsey & Co., is to cause a study and prepare a strategy to reduce the cost of production by the assessee. Thus, in effect, profitability of the assessee has increased. As rightly observed by the CIT(A), any strategy for improved costing or improved sale would always yield enduring benefit. Though enduring benefit is one of the criterion to hold an expenditure to be capital in nature, it is not the only criterion to hold it to be so. While considering the nature of expenditure to be capital or revenue, the test to be applied is also whether there is any new asset being created and whether it is giving enduring benefit. As rightly pointed out by the CIT(A), no new asset has come into existence and the study is only for improving the sales and profitability of the assessee. Therefore, in our opinion, the expenditure is clearly revenue in nature and hence, there is no reason to interfere with the order of the CIT(A) on this issue also.- Decided against revenue.
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