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2015 (10) TMI 2662 - AT - Income TaxTDS on commission payment - nature of payment- Held that:- We find that the agreement governing the commission was changed during the year under appeal, that the commission was to be paid after the receipt of the sale proceeds as per the new agreement, that the assessee had filed details of foreign commission for the year under consideration as per the revised agreement, that the details are available at page no.9 of the paper-book. A perusal of the details clearly show the full foreign commission expenses for the year under appeal and lead to the conclusion that the assessee had correctly made a claim about it. In our opinion, the said expenditure cannot be treated as prior period expenses. In our opinion, it is not necessary that agreement should be registered to be a valid agreement. We do not find any – thing illegal or wrong in the method adopted by the assessee for the year under appeal, So, we are reversing the order of the FAA and deciding the ground no.1 in favour of the assessee. Addition on account of netting off of interest - treatment as ‘income from other sources' - Held that:- We find that the assessee had netted off the interest and made necessary entries in the books of account, that remaining interest was capitalised as stipulated by AS-16, that the loan taken by it was a term loan, that it could not be used for any other purpose except for the object it was taken, that due to delay in commissioning the plant it had parked the loan money with the bank. In our opinion, interest earned by it was directly linked with the business activity of the assessee. Therefore, same could not be taxed under the head ‘income from other sources’. As the interest received by the assessee is inextricably linked with the process of setting up its plant and machinery, so in our opinion treatment given by the assessee in its books of accounts to the interest income is as per the provisions of Act. See Commissioner of Income-Tax Versus Bokaro Steel Limited [1998 (12) TMI 4 - SUPREME Court ] - Decided in favour of assessee. Deduction claimed u/s. Section 80IB disallowed as relying on the previous assessment year assessment. - Decided against assessee.
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