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2015 (3) TMI 931 - AT - Income TaxInterest under section 244A on interest granted - whether while issuing refund interest amount will take priority before principal amount? - CIT(A) allowed claim - Held that:- The learned Commissioner of Income-tax-Departmental representative stated that the computation of the Commissioner of Income-tax (Appeals) is wrong but he could not point out which part of the Commissioner of Income-tax (Appeals)'s order is wrong and how. He could not identify mistake in allowing interest under section 244A of the Act. Despite the entire facts available in the order of the Commissioner of Income-tax (Appeals), the learned Commissioner of Income-tax-Departmental representative could not point out any error, we feel that the directions of the Commissioner of Income-tax (Appeals) are as per law and we uphold the same - Decided against revenue. Non-deduction of TDS on reimbursement of cost for providing access to system and management audit methodology updates, etc. - CIT(A) deleted disallowance u/s 40(a)(ia) - Held that:- We find the factual position that the assessee-company is a member of the international organisation of Ernst and Young and its several associate concerns worldwide. Ernst and Young Global Services LLP and Ernst and Young U. K. LLP provide administrative and management support services in connection with technology updates, system and methodology and upgrades, training through webs, etc. to the assessee and to other associate concerns of the group. The assessee and its other associate concerns share the costs. A sum of ₹ 6,88,12,554 was reimbursed to Ernst and Young Global Services LLP and a sum of ₹ 23,78,781 to Ernst and Young U. K. LLP by the assessee during the current assessment year on account of its share of costs for such services. Accordingly, arrangement was arrived at for such services to be developed in a pool by the said two concerns to which the member firms would have access to it and reimbursing their respective shares of cost incurred therefor. Such reimbursement was agreed on the basis of respective turnover of the member firms. These facts are not denied by the Revenue even now before us and these are reimbursement of expenses. Once these are reimbursement of expenses the assessee is not liable to deduct TDS under section 195 of the Act. - Decided against revenue. Disallowance invoking the provisions of section 14A read with rule 8D - Held that:- Exempted income is to the extent of ₹ 76,34,047 in assessment year 2006-07. Rule 8D of the Rules is not applicable in this assessment year in the assessee's case as held by the hon'ble Bombay High Court in the case of Godrej and Boyce Mfg. Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT] being prospective. We direct the Assessing Officer to restrict the disallowance at one per cent. of the exempted income. - Decided partly in favour of assessee. Disallowance of provision for leave encashment - Held that:- According to assessee this amount was added back in the computation of income filed with original return of income in pursuance to section 43B(f) of the Act. The hon'ble apex court in the case of Exide Industries Ltd. [2009 (5) TMI 894 - SUPREME COURT] has stayed the operation of the judgment of the hon'ble Calcutta High Court [2007 (6) TMI 175 - CALCUTTA High Court] who stuck down the provisions of section 43B(f) of the Act as being arbitrary and ultra vires. Once this is the position, we restore back this issue to the file of the Assessing Officer to adjudicate the same afresh - Decided in favour of assessee for statistical purposes.
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