Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 239 - AT - Income TaxDisallowance on account of Royalty payable to Kolkata Port Trust (hereinafter KoPT) which has been shown in the books as 'estimated liability' - HELD THAT:- Similar issue had cropped up in A.Y. 2009-10 wherein the A.O. in similar factual circumstances had disallowed the expenditure and the Ld. CIT(A) had allowed it and this action when challenged by the Revenue before the Tribunal, was adjudicated in assessee's favour by upholding the Ld. CIT(A)'s action Respectfully following this order in the assessee's own case and also relying on Supreme Court's decision in the case of Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT] wherein it was held "if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in present though it will be discharged at a future date." Therefore, we dismiss this ground of appeal of the Revenue. TDS u/s 194C - Disallowance u/s. 40(a)(ia) - non-deduction of TDS on 'Fees related to Management Contracts' (which is in the nature of cargo handling fees) - HELD THAT:- We note that the amount of ₹ 1.57 crores debited in the Profit and Loss Account is a mere reversal of irrecoverable fee/excess margin money. Thus we find that the Ld. CIT(A) has rightly reversed the action of the A.O. and allowed the claim of the assessee and it is a trite law that the accounting terminology used in the books of accounts cannot determine the nature of the transaction [Kedarnath Jute Manufacturing Co. Ltd. [1971 (8) TMI 10 - SUPREME COURT]. Thus we find no infirmity in the order of the Ld. CIT(A) and so we confirm the same. Disallowance u/s 14A r.w.r. 8D - no expenditure was incurred to earn the dividend income applied Rule 8D(iii) and disallowed 0.5% of average investment value - HELD THAT:- As relying on REI AGRO LTD, KOLKATA VERSUS DCIT CENTRAL CIRCLE-XXVII, KOL [2013 (9) TMI 156 - ITAT KOLKATA] we set aside the order of the Ld. CIT(A) and remit the matter back to the file of the AO to compute Rule 8D(ii) only in respect of the investment made by assessee in shares which resulted in dividend in the instant assessment year. With the aforesaid direction we remand the matter back to the file of the AO and the AO is directed to compute the disallowance of 0.5 percent as directed. Deduction of education cess on the income tax paid u/s 40(a)(ii) - allowable deduction or not? - HELD THAT:- Respectfully following the decision of this Tribunal in the case of Reckitt Benckiser (I) Pvt. Ltd [2020 (6) TMI 474 - ITAT KOLKATA], we direct the A.O. to allow the claim in respect of the education cess while computing the total income of the assessee. Refund for dividend distribution tax paid in respect of non-resident shareholders - HELD THAT:- Since this issue has not been considered by the AO, therefore in the light of the aforesaid submission of the assessee, we are of the view that this issue should be remanded to the file of the A.O. for factual verification and adjudication of the claim as per law. The assessee is directed to file before the A.O. all the document regarding amount of dividend paid, copy of agreement, other relevant documents as required by the A.O. to adjudicate the issue. We direct the A.O. to examine the relevant 'double taxation avoidance agreement' in respect to the payment of dividend to the shareholders and adjudicate the issue in accordance with law. For statistical purposes, this additional grounds raised by the assessee in C.O. is allowed. Deduction of education cess on DDT paid which the assessee claims as allowable expenditure - The prayer of the assessee is that to allow the deduction of education cess on DDT paid in respect of the non-resident shareholders since it was not hit by provision of section 40(a)(ii) of the Act and hence it is an allowable deduction - HELD THAT:- This issue we have dealt with while adjudicating ground No. 2 of the CO of the assessee. So on the same reasoning mutatis mutandis this ground is allowed.
|