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2015 (10) TMI 311 - AT - Income TaxRevision u/s 263 - assessee has not made TDS on granite export expenses for ocean freight charges - Held that:- Regarding the shipping charges, there is a Circular issued by the CBDT No.723 dated 19.9.1995 states that where the provisions of sec.172 are to apply, the provisions of sections 194C and 195 relating to tax deduction at source are not applicable. Acting on the above Circular, ITAT, Ahmedabad Bench ‘C’, has held in the case of DCIT v. Hasmukh J. Patel [2011 (3) TMI 353 - ITAT, Ahmedabad] that where the provisions of sec.172 would apply, no deduction of tax is required under sec.194C. Also see ACIT vs. Leaap International (P.) Ltd. [2011 (5) TMI 700 - ITAT CHENNAI]. We find that the above circular and the Tribunal decisions support the case of the assessee on merit that the assessee was not under an obligation to deduct tax on freight charges paid to shipping agencies. - Decided in favour of assessee. Expenditure towards machinery spare parts was a capital expenditure - Held that:- In the show cause notice, the observation of the Commissioner of Income-tax is that the said expenditure would be of capital nature. But in the revision order passed by him, the Commissioner of Income-tax has disallowed the said expenditure under sec.40(a)(ia). Because of this contradiction, this objection made by the Commissioner of Income-tax cannot survive. Moreover, the view taken by the Assessing Officer on machinery spare parts as revenue expenditure is a possible view.- Decided in favour of assessee. Granite marking and inspection charges - non deduction of TDS - Held that:- Those charges were made by the assessee outside India for the purpose of export trade. All services are rendered outside India except for quality verification of granites in India. Where such payments are made for the purpose of business carried outside India and payments made to non-residents, there is no requirement of deducting any tax at source, as held by the Hon’ble High Court of Madras in the case of CIT v. Faizan Shoes (P.) Ltd. [2014 (8) TMI 170 - MADRAS HIGH COURT ]. Therefore, the said objection also does not survive against the assessee. - Decided in favour of assessee. Regarding the question of TDS, the provision of disallowance is applicable only to those amounts payable and not to the amounts already paid. ITAT, Chennai ‘B’ Bench in the case of ITO vs. M/s. Theekathir Press [2015 (4) TMI 616 - ITAT CHENNAI ] has held that the disallowance under sec.40(a)(ia) applies only to those amounts “payable” and not to those amounts “paid”. In the present case, therefore, the question of disallowance should apply only those amounts remained payable. But what is shown as payable in the balance sheet, has already been paid by the assessee before the due date of filing of return. Therefore, that portion of TDS amount does not remain as payable. On that ground also disallowance is not justified.- Decided in favour of assessee. Quarry development expenses would have been treated as a capital expenditure. That is also a case of divided opinion. Therefore, the Commissioner cannot take it as a ground to revise the assessment. - Decided in favour of the assessee.
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