Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 1033 - AT - Income TaxPenalty u/s. 271(1)(c) - Disallowance made u/s. 40(a)(ia) - CIT(A) deleted penalty - Held that:- The Hon'ble Supreme Court of India in the case of GE India Technology Centre P. Ltd. Vs. CIT (2010 (9) TMI 7 - SUPREME COURT OF INDIA) has held that if the remittances are not assessable to tax under the provisions of Act, there is no question of deducting tax at source. The services were admittedly rendered outside India by the foreign entities. The said foreign entities were having no PE in India. Therefore, payment of sales commission were not assessable to tax in India. The issue in present appeal is squarely covered by the judgment of Faizan Shoes P. Ltd. (2014 (8) TMI 170 - MADRAS HIGH COURT) wherein similar circumstances has held, that disallowance on payment of sales commission without TDS to foreign parties for procuring export orders, u/s. 40(a)(i) is not sustainable. Hence, no penalty can be levied on such unsustainable disallowance. Deduction u/s. 80HHC - Held that:- The Hon'ble Supreme Court of India in the case of CIT Vs. Reliance Petro Products P. Ltd. (2010 (3) TMI 80 - SUPREME COURT) has held that a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing of inaccurate particulars. In the present case, the assessee is rather on a better footing. The assessee is eligible to claim deduction u/s. 80HHC on exports. The only shortcoming is that the assessee has not recovered the export proceeds on which the deduction has been claimed. The impugned order of the CIT (Appeals) in deleting the penalty levied u/s. 271(1)(c) on both the grounds is well reasoned and warrants no interference. Addition on account of Management Incentive Bonus (MIPB) and Leave Travel Assistance (LTA) - CIT(A) deleted the addition - Held that:- It is an admitted position that the assessee is following mercantile system of accounting and has been making provision for the aforesaid incentives. It has come on record that the incentives are paid to the assessee in the subsequent year, if they are not claimed by the employees in the year in which provision is made. The assessee has been consistently following this method of creating provision and making payments in respect of aforesaid incentives. The assessee has brought on record ledger extracts to show that the liability has been paid in the subsequent year, where not claimed in the year of creating provision. The Hon'ble Supreme Court of India in the case of Bharat Earth Movers Vs. CIT reported as [2000 (8) TMI 4 - SUPREME Court] has held that, “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” - Decided against revenue. Addition on account of Employees share of Contribution towards Provident Fund (PF) and ESIC on account of delay - CIT(A) deleted the addition - Held that:- This issue has already been settled by the Hon'ble Supreme Court of India in the case of Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT]. The Hon'ble jurisdictional High Court in the case of Hindustan Organics Chemicals Ltd. (2014 (7) TMI 477 - BOMBAY HIGH COURT) and in the case of CIT Vs. Ghatge Patil Transport Ltd. [2014 (10) TMI 402 - BOMBAY HIGH COURT] following the law laid down by the Hon'ble Supreme Court of India has held that the assessee would be entitled to deduction on contribution to the employee welfare funds, if the amount has been credited on or before the due date of filing of the return. We do not find any infirmity in the impugned order in deleting the addition on this count - Decided against revenue. Disallowance of depreciation - AO disallowed the claim of depreciation to the tune of ₹ 16,99,760/- on the fixed asset for which the bills were not produced - CIT(A) deleted the addition - Held that:- CIT(Appeals) has admitted the contentions of assessee without verification of the bills/invoices in respect of newly acquired assets. The Assessing Officer has categorically observed in his order that the assessee has failed to produce bills in respect of assets amounting to ₹ 94,51,713/-. Whereas, the Commissioner of Income Tax (Appeals) in his order has reduced this amount to ₹ 15,95,990/- without recording the reasons. It is not clear from the order of the appellate authority, whether some more bills/invoices were furnished by the assessee before him. CIT (Appeals) has further erred in observing that the Assessing Officer has not brought on record that the assessee has inflated the purchase or has claimed excessive depreciation.We find that there is disparity between the bills produced by the assessee before the Assessing Officer and as recorded by the CIT (Appeals). In such circumstances, we deem it appropriate to remit this issue back to the Assessing Officer for reconsideration of the bills/invoices. - Decided in favour of assessee for statistical purpose.
|