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2017 (7) TMI 1199 - HC - Income TaxDisallowance of cash refunds of tuition fee claimed - Held that:- As the respondent contended that the refund amount which has been given to the students in view of the condition and it was given each of the individual pursuant to the dishouring of the catching clause after deducting the requisite basic fees which was required to be submitted and the same was part of their books of accounts. Considering the same, the view taken by the tribunal is just and proper and first issue is required to be answered in favour of the assessee. Disallowance made under Section 40(a)(ia) - TDS u/s 194C - Held that:-in the case of a pharmaceutical product where the ultimate consumer is legitimately entitled to ensure that her health is not prejudiced by the consumption of a product not meeting prescribed standards. The owner of a mark, therefore, introduces specifications to ensure that the product meets the standards justifiably associated with the reputation in the mark. The specification ensures the observance of standards. Similarly, a clause relating to exclusivity is not inconsistent with a transaction of sale. Here again, much depends upon the nature of the product. Restrictive covenants of this kind are intended to protect the intellectual and other property rights of a party which markets its goods by requiring a manufacturer to observe norms of specification and exclusivity. The law is, therefore, consistent with the transaction being regarded as a transaction of sale, provided that the requirements of a contract of sale are met. They are in this case. The contract entered into by the assessee is not a contract for carrying on any work within the meaning of Section 194C. Revenue was not justified in treating the assessee, as an assessee in default. Addition on account of interest free loans to relatives - Held that:- There is nothing on record that the money advanced by the appellant to its sister company had been used as a measure of commercial expediency, was not justified. The appellant furnished all the documents in this regard. The appellant expressly stated that the amounts had been utilized for commercial activity. This assertion was never denied. The appellant was not required to do anything further to establish its assertion that its sister company had utilized the amounts for the purposes of its business. The finding of the Tribunal is not based on any material. It is important to note that the Tribunal had not even suggested that such a case was put to the appellant or its authorized representative and that despite the same the appellant failed to establish the same - the question of law is answered in favour of the appellant and against the department. The order of the Tribunal is set aside. The appellant shall be entitled to the deduction under Section 36(1)(iii)
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