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2013 (9) TMI 1072 - ITAT BANGALORETDS u/s 194C - reimbursement of expenses by C&F Agents - Held that:- There is no need to deduct TDS on reimbursement of expenses to C& F Agents which are separately billed and accordingly uphold the order of the learned CIT(Appeals). Disallowance due to shortage - Held that:- In the absence of any basis for the Assessing Officer to adopt shortages at 2% in the absence of any industry average, we find that, the learned CIT (Appeals) examined the shortages claimed by the assessee in the period 2004-05 to 2006-07. It is seen that the shortage of Assessment Year 2004-05 was 9.75% and that of Asst. Year 2006-07 was 4.68% which fluctuated and was in excess of the 3.64% shortage of the current year. In this factual view of the matter, we agree with the learned CIT (Appeals) that the shortages at 3.64% in the current year is less than that of both the earlier and subsequent year and is therefore reasonable. In view of the above, we find no infirmity in the order of the learned CIT (Appeals) and uphold the same. Seed Development Expenses disallowed - Held that:- It is an uncontroverted fact that the assessee does not carry out any research and development activity. The facts on record establish that the expenses incurred by the assessee were towards purchase of parent seeds. If a part of the amount paid by the assessee have been utilised by Metahelix for development of seeds, the expenses can be capital in nature for Metahelix but not for the assessee. Merely because the expenses paid by the assessee to Metahelix is towards defraying the expenses of development of parent seeds, it does not change the nature of the expenditure by the assessee which is for procurement of parent seeds. As far as the assessee is concerned, the entire expenditure is incurred towards purchase of parent seeds and therefore it is entirely revenue in nature. There is no enduring benefit to the assessee due to the purchase of parent seeds as they lose their existence and form once they are converted into hybrid seeds. In this view of the matter, we are of the considered opinion that the entire expenditure is revenue in nature and are therefore entirely allowable expenditure.
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