Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 71 - AT - Income TaxDeemed dividend addition u/s.2(22) - Held that:- The provision is very clear that to become a beneficiary they must be registered as shareholder. We rely on the decision of CIT vs. Madurai Chettiyar Karthikeyan (2014 (4) TMI 825 - MADRAS HIGH COURT ) were held trade advance in relation to business transaction cannot be treated as deemed dividend within Sec.2(22) (e) of the Act - Decided in favour of assessee Addition being payment of foreign commission paid to foreign agent in procuring orders - non deduction of tds - Held that:- The assessee has not substantiate with the type of works undertaken by Foreign Agent and volume of business conducted by them in proportionate to total turnover and also there is no confirmation produced in respect of commission's by foreign agent. Considering the facts, we set aside the order of Commissioner of Income Tax (Appeals) and remit the issue to the Assessing Officer for limited purpose to verify the genuineness of transaction whether foreign agent have paid taxes in their country. Deduction u/s.80IB of the Act on job works treated as business income - Held that:- We considered the submissions and findings of the ld. Departmental Representative on the order of Commissioner of Income Tax (Appeals) which lacks clarity and the claim of job works by the ld. Authorised Representative does not specify the nature of work undertaken by the assessee company and the same was not reflected by the Assessing Officer in his order nor assessee has produced relevant materials on record to explain the nature of job works undertaken and job works charges takes the characteristic of business income. Even before us, the ld. Authorised Representative could not substantiate the working criteria of nature of job works with any supporting material in respect of particular product and further there is no discussion on the product used in job works by the Commissioner of Income Tax (Appeals). We are of the opinion that the matter has to be re-examined for limited purposes to verifying the nature of job works for captive consumption or for others. Therefore, we deem it necessary to set aside the impugned order of Commissioner of Income Tax (Appeals) and remit the file to the Assessing Officer to pass the order on above findings and Assessing Officer shall also provided adequate opportunity of being heard to the assessee. Allowability of Discount for computing deduction u/s 80-IB - Held that:- There is no nexus provided with respect to business activities. Prime facie the assessee enters into international business transactions and such foreign exchange gain should be part of the business activity. The activity of rate difference arised directly related to the sale transaction involving export of goods of industrial undertaking. We rely on the decision of Jurisdictional High Court in the case of CIT vs. Pentasoft Technologies Ltd (2010 (7) TMI 75 - MADRAS HIGH COURT ) were it was held that in order to allow a claim under section 10A what all is to be seen is whether such benefit earned by the assessee was derived by virtue of export made by the assessee. The exchange value based on upward or downward of the rupee value is not in the hands of the assessee. Therefore, when the fluctuation in foreign exchange rate was solely relatable to the export business of the assessee, and the higher rupee value was earned by virtue of such exports carried out by the assessee, the benefit of section 10A should allowed to the assessee in respect of such gain and also relied on Bombay High Court decision in the case of CIT vs. Rachna Udhyog [2010 (1) TMI 38 - BOMBAY HIGH COURT ] were it was held that exchange rate difference arises and is directly related to sale transaction involving export of goods of the industrial undertakings and, therefore, the difference on account of exchange rate fluctuation is entitled to deduction under section 80IB of the Act. Considering apparent facts we are not inclined to interfere with the order of Commissioner of Income Tax (Appeals) and dismiss the ground of the Revenue.
|