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2018 (9) TMI 473 - AT - Income TaxAllowability of foreign tour expenses - Held that:- Mrs. Zhu Xintian, the research manager having visited foreign countries wholly and exclusively for business purposes of the assessee company and therefore is entitled to claim the expenditure and we do not want to interfere in the order of the Ld. CIT(A), which is hereby upheld. TDS u/s 194C - Disallowance under the head “Publicity Expenses” - according to AO assessee violated the principal norm of business and claimed expenditure for the business as a manufacturer cum trader (seller) and not as a consignor - Held that:- As decided in assessee's own case for AY 2011-12 [2018 (4) TMI 709 - ITAT KOLKATA] due to restriction of production of liquids in the factory premises by the land lord of the assessee, due to effluent water problem, the production of SORBILINE was shifted to backward area as ancillary costs for manufacturing the said product are low. In this regard, the assessee entered into an agreement with M/s.STP Pharmaceuticals Pvt. Ltd. according to which M/s. STP will manufacture the pharmaceutical products in the brand name "Sorbiline" by using materials from its own source and sell the same to the assessee on "principal to principal" basis. Therefore, undoubtedly the provisions of clause (e) of Explanation (iv) of sec. 194C gets attracted in the instant case and as such, the entire expenditure of ₹ 58,77,566/- being paid to M/s.STP Pharmaceuticals Pvt. Ltd for purchase of "Sorbiline" does not come under the ambit of sec. 194C, therefore, the AO erred on this issue. - Decided in favour of assessee Allowability of repairing expenses incurred on factory building - Held that:- The expenditure incurred in this connection has not brought into existence any new advantage or any new asset and the expenditure was incurred only in the process of earning profit in the course of its business activities. Even after incurring expenditure on repair, the assessee continued to be lessee of the factory premise and continued to carry on the same business. Therefore, the business of the assessee remained the same even after the expenditure and the asset continued to be one of the lease holding assets. Hence, the claim of the assessee has to be allowed u/s 30(a) (i) of the Act. When the nature of work undertaken by the assessee is to carry on the business and not to obtain any capital asset, the expenditure incurred in this connection is to be treated as revenue expenditure. And it should be kept in mind that even though the advantage that accrues to the assessee on the incurring of the expenditure may endure for an "indefinite future," still since the advantage consisted merely in facilitating the assessee' s business to be carried on more efficiently or profitably while leaving the fixed capital untouched, the advantage would be of revenue nature. - Decided against revenue
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