Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 726 - AT - Income TaxDeemed dividend under section 2(22)(e)- Held that:- Bare perusal of the findings returned by the AO goes to prove that he has merely followed the assessment order of the earlier year AY 2008-09 and has not applied his mind whereas CIT (A) has examined the issue threadbare. It is proved on record inter alia that the payment made by the assessee to three group concerns is not a dividend nor the payment made by the company was by way of advance of loan rather the payment was made by the assessee to M/s. Siegwerk Benelux N.V., M/s. Siegwerk (Asia Pacific) Pvt. Ltd. & M/s. Siegwerk Druckfarben for work done. So, we find that no case is made out to interfere into the findings returned by the CIT (A), hence ground no.1 is determined against the revenue. Addition claimed being royalty in profit & loss account - assessee has not filed any detail or documents to substantiate its claim of royalty payment nor assessee has proved if TDS has made on such payment or not - Held that:- AO has merely made the addition on account of payment of royalty to the tune of ₹ 70,18,413/- on the grounds inter alia that assessee has failed to furnish the expenses to substantiate its claim of royalty payment; that the nature of payment is that the assessee has failed to explain if payment is capital or revenue in nature; that the genuineness of the actual payment has not been proved; that it is not proved that tax at source has been deducted or not, but CIT (A) has not preferred to call the remand report qua the said documents nor entertained the said documents on the basis of some request for additional evidence. However, it is admitted fact that the royalty payment made by the assessee company qua the AY 2008-09 and AY 2010-11 has already been allowed as revenue expenditure by the revenue authorities. In these circumstances, we find it expedient to restore the matter to the AO to decide afresh. AO to allow the royalty payment to the tune of ₹ 70,18,413/- after due verifications of the documents relied upon by the assessee. So, the ground no.2 is determined in favour of the revenue. Addition u/s 14A - Held that:- Assessee’s own case in its favour by restoring the matter back to the file of the AO for de novo consideration in the light of observations made therein, AO passed fresh order dated 31.01.2014 (copy available on the file) and accepted the contention of the assessee that expenditure of ₹ 1,32,520/- was made for earning of exempt income, the file is required to be restored back to AO to determine the issue afresh in the light of his earlier year order as well as in view of the mandate of section 14A(2) by considering the assessee’s claim by providing opportunity of being heard and if the assessee’s claim is rejected then he should resort to Rule 8D. - Decided in favour of the revenue.
|