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2013 (7) TMI 252 - AT - Income TaxRe opening of assessment - TDS - disallowance of payment on account of share of profit paid to M/s. JSMS for managing the Lokhandawala Branch following judgment of IT vs. Panipat Woollen and General Mills Co. Ltd. [1976 (1) TMI 1 - SUPREME Court] - Held that:- Unable to agree with the view taken by the authorities below as the case of CIT vs. Panipat Woollen and General Mills Co. Ltd. (supra), is distinguishable as in that case the agent had also made most of the investments and was sharing both profits and losses whereas in this case, the assessee was only sharing profit with M/s. JSMS who was managing only day to day affairs of the branch whereas policy decisions were taken by the assessee and the entire investments had also been made by the assessee. - the arrangement was not a case of joint venture. - Decision in [2012 (9) TMI 124 - ITAT, MUMBAI] followed - Decided in favor of assesseeee. Non deduction of TDS on the payment made to M/s. JSMS as is of the nature of fees for professional services/technical services - Held that:- Considering assessee's reliance on case of Merilyn Shipping and Transports vs. ACIT (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) wherein held that the word "payable" used in section 40(a)(ia) has to be given its natural meaning and section 40(a)(ia) would be applicable only to expenditure which is payable as on March 31 of every year and can not be invoked to disallow amount which have already been paid during the previous year. As assessee submitted that no amount remained payable on account of M/s. JSMC at the end of the year provision of section 40(a)(ia) were not applicable. Levy of interest u/s 220(2) - AO has charged interest under section 220(2) from date of the original assessment order - Held that:- Once the original demand notice has been dispensed with and fresh demand notice has been raised in view of the order giving effect to the Commissioner (Appeals)'s order wherein instead of demand there was a refund and such an order has attained finality as no second appeal was filed, then interest cannot be levied under section 220(2) from the date of original demand notice - restore this issue back to the file of the AO to verify whether interest has been charged as per the demand notice in pursuance of assessment order dated 24th December 2009, passed under section 143(3) r/w section 147 or original assessment order dated 23rd February 2005, passed under section 143(3) - partly in favour of assessee for statistical purposes.
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