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2014 (2) TMI 987 - ITAT DELHITDS u/s 194H - nature of expenditure on foreign travelling of its dealers/sub-dealers - Commission or Discount - Held that:- The assessee had paid incentives/commission to its dealers, which had been debited in the Profits & Loss Account under the head of foreign travel expenses - the expenses had been claimed under the garb of foreign travel expenses - there is nothing other than incentive/commission - this fact was evident since the higher sales achieved by the dealers would result in more bonus points to the dealers - commission includes any payment received directly or indirectly by a person acting on behalf of another, for services rendered in the course of buying or selling of goods - The Assessing Officer has miserably failed to appreciate the real controversy - He has totally misconstrued the explanation given by the assessee - The dealers and sub-dealers had purchased the goods directly from the assessee - They have not acted as a commission agent for third person where upon sec. 194H would be applicable – Decided in favour of Assessee. Disallowance of interest paid – excessive and unreasonable expenditure - Held that:- Section 40A(2)(b) is not applicable on a public limited company - The premises in question, consisting of 21000 sq. ft. of office area, was taken on rent in Assessment Year 1999-2000 - During the year, total rent amounted to Rs. 48 lacs - In addition, Rs. 11.35 crores had been paid as interest free security deposit, which was as per clause (2) of rent agreement dated 31.12.2008 - it had been agreed to keep the rent @ Rs. 4 lacs per month and to increase the security deposit by Rs. 6 crores, which facts do not stand disputed – Decided in favour of Assessee.
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