Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 186 - AT - Income TaxDeduction u/s 80IC - profit rate of Dehradun unit was found unnaturally at very high level - AO restricted the claim to 50% of the total profit on the ground that details of expenses were not available and could not be verified - HELD THAT:- As we find that assessee’s case is squarely covered in its favour in own cases [2018 (4) TMI 1118 - ITAT KOLKATA] and [2018 (4) TMI 1126 - ITAT KOLKATA] by the decisions of the coordinate benches wherein similar issue has been decided in favour of the assessee. The ld. CIT(A) allowed the appeal of the assessee after following the above decisions of the coordinate benches. The facts in the instant assessment year are materially same and, therefore, respectfully following the same, we uphold the order passed by the ld. CIT(A) and dismiss Ground No. 1 raised by the revenue. Disallowance u/s. 40(a)(ia) - Non deduction of TDS on rent paid, consultancy charges and commission - HELD THAT:- CIT(A) has passed a speaking and reasoned order giving substantive findings as to how the disallowance is not called for. We note that ld CIT(A) has analysed each and every item of expense and came to a conclusion that provisions of tax deduction at source are not applicable in some cases whereas in some instances in view of the decision of the apex court in the case of Hindustan Coca Cola Beverages P. Ltd. [2007 (8) TMI 12 - SUPREME COURT] the provisions of section 40(a)(ia) are not applicable as the payees have returned the said payments in their return of income and paid due taxes. Consequently, we do not find any reason to disturb the findings of the ld. CIT(A) and accordingly Ground No. 2 of the revenue is dismissed. Addition on payments made in cash in violation to provisions of Section 40A(3) - HELD THAT:- CIT(A) observed that in a single day, where the payment exceeded Rs. 20,000/-, the same was made by way of account payee cheque or account payee demand draft. CIT(A) observed that the said Section applies to payments made to a single party on a single day. The ld. CIT(A) have recorded a finding of fact that the single day payments to single individual, never exceeded Rs. 20,000/- by way of cash and, therefore, provisions of Section 40A(3) of the Act cannot be applied and correctly deleted the disallowance. Non-payment of dues in terms of provisions of Section 43B - HELD THAT:- We observe that none of the cases of outstanding payments/dues were paid beyond the due date of filing of return. We observe from the submissions made and evidences furnished by the assessee and also from the findings given by the ld. CIT(A) in respect all these payments that they were paid within the due date. Since the issue is a factual one, we do not deem it fit to delve further into the issue as all these payments were made before the due date of filing of the return as noted by the ld CIT(A) in his appellate order. Consequently ground is dismissed. Deduction u/s 80G in respect of donations made to three trusts - Addition made as assessee has not offered any explanation and accordingly the same was disallowed - HELD THAT:- CIT(A) in the appellate proceedings observed that these donations were made to the trust/institutions which are eligible for deduction u/s 80G of the Act and accordingly restored the issue to the file of the Assessing Officer and directed the Assessing Officer to allow the statutory deduction as per statutory limit prescribed u/s 80G of the Act. We do not find any reason to interfere with this finding of the ld. CIT(A) and accordingly uphold the order of ld CIT(A) on this issue. Consultancy charges paid to three directors of the assessee company over and above the remuneration - HELD THAT:- We have also noted the findings of the ld. CIT(A) that these payments were made to the directors for rendering services to the assessee company who were qualified in their respective fields. CIT(A) also noted that while making the payment, the TDS was duly deducted from consultancy charges and these directors were assessed to tax in their personal capacities also. CIT(A) specifically noted that this is not the case of the assessee that the payments made to the directors is excessive and unreasonable. Besides we note that these directors are separately assessed to tax and have duly declared the consultancy charges received from the assessee company and paid due taxes thereon. The finding to this effect has been given by the CIT(A) in his order also. Accordingly, we are inclined to uphold the order of the ld. CIT(A) Bogus and non-genuine commission payments - AO observed from the evidences furnished by the assessee in the form of agreements with these agents to whom commission was paid that assessee has failed to substantiate as to how these persons were rendering their services to the assessee - CIT(A) deleted addition - HELD THAT:- We observe that the assessee is engaged in manufacturing and supplying goods to Indian Railways. We note that the assessee has hired services of commission agents for keeping track of the tenders, applying for the tenders, and after the tenders are successfully obtained, the obtaining of supply orders , supply of goods and finally pursuing and receiving payments. We have perused the order of the ld. CIT(A) and observed that the services of these agents are indispensable to do business with Indian Railways. The ld CIT(A) has gone into the commercial angle of these expenses and held that these were incurred for the purpose of business wholly and exclusively. The mere fact that these expenses were outstanding at the year end would not colour them with taint that these expenses are non genuine and bogus. The ld. CIT(A) has taken into account all these aspects while allowing the appeal and passed a very detailed and reasoned order explaining each and every aspect of the issue by noting that similar commission has been paid in the preceding assessment years and was allowed. The ld CIT(A) has noted that these agents are experts in their field and that the assessee has duly explained the services rendered by these agents to the assessee. The ld CIT(A) relied on a series of decisions to justify his conclusion. Decided against revenue.
|