Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (9) TMI 183 - AT - Income TaxCompensation from a German Company for termination of rights - capital receipt not chargeable to tax OR liable to be assessed as business income - Held that:- In terms of mechanics of the Product Support Agreement KHD Germany & the Clause in the termination agency reveals that the caveat on the assessee is not to act as an independent merchant of Deutz spare parts and approved exchange parts, and also not to compete with Deutz in any manner whatsoever as was being done hitherto - thus it is quite clear that the impugned amount of receipt was not for loss of agency, but it is attributable to negative or restrictive covenants put on the assessee - as decided in Guffic Chem (P) Ltd. versus C.I.T. and Others [2011 (3) TMI 6 - SUPREME COURT] any compensation received for the loss of agency is a revenue receipt, whereas compensation which is attributable to restrictive covenants is a capital receipt - in favour of assessee. Disallowance of expenditure for earning dividend - Held that:- As per the CIT (A) the assessee was found to have received 17 dividend cheques during the year and the relatable expenditure on employees cost, etc, attributable to such activity has been pegged at Rs 75,000/-, which, is reasonable as against 10% by AO and the action of the CIT (A) is accordingly affirmed - partly in favour of assessee. Disallowance out of telephone expenses - Held that:- In a case of a limited company expenditure incurred on telephone, vehicle etc., which are certified by the statutory auditors under the Companies Act, 1956 as well as under the Act cannot be disallowed - in favour of assessee. Disallowance out of interest claimed - Held that:- As identical issue has been restored back to the file of the AO in the assessee’s own case for the earlier assessment years, the same need also to be restored for the year in question- in favour of assessee for statistical purposes. Disallowance prior period expenses - Held that:- As decided in Saurashtra Cement & Chemical Industries Ltd [1994 (10) TMI 30 - GUJARAT HIGH COURT] claim of the assessee is need to be accepted - in favour of assessee. Allowance of Loss on sale of units of mutual funds - Revenue appeal - Held that:- The assessee did not make a claim in the return of income for a loss claimed to have been suffered on the sale of units of mutual funds and was made only during the course of assessment proceedings and not by way of a revised return which was admitted by CIT (A) - no reasons to interfere with the directions of the CIT (A) as powers of an appellate authority includes to admit fresh claims, which were hitherto not considered by the AO - against revenue. Disallowance of research and development expenditure - CIT (A) allowed it - Held that:- CIT(A) allowed the claim comprehensively dealing with the issue by apprising the activities carried out by the assessee on the basis of detailed applications made by the R & D unit to seek recognition from the Ministry of Science & Technology which have not been negated by the Revenue - with regard to the capital expenditure in question the nature of such expenditure has not been examined by the Assessing Officer on the basis of the details of expenditure but merely on the basis of the Directors’ report - against revenue.
|