TMI Blog2012 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that the dis-allowance under the pre amended Section 40(a)(i) was not justified or mandatory. It is undisputed that TDS has been deducted and paid in the next A.Y. Assessee can in the penalty proceeding show and explain that interpretation was plausible and had merit, though was not accepted. Order of Tribunal deleting penalty is justified – Decided against the revenue. - ITA No. 526/2011 - - - Dated:- 19-1-2012 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr. Abhishek Maratha with Ms. Anshul Sharma, Advs. For Respondent: Mr. Jayant K. Mehta and Mr. Sukant Vikram, Advs. SANJIV KHANNA, J: (ORAL) 1. The Revenue is aggrieved by the order of the Income Tax Appellate Tribunal (for short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer. 5. The question whether a particular expenditure is capital or revenue in nature is always debatable and two views are possible. It is an admitted position that the assessee had made payment of Rs. 1 lakh to the ROC and had amortized the said amount. 1/3rd of this amount was claimed as a revenue deduction in this year. It was held by the Assessing Officer that the payment to ROC was capital expenditure and not revenue expenditure. The tribunal has accepted the plea and explanation of the respondent-assessee that they genuinely believed that 1/3rd of the amount paid to the ROC could be treated as revenue expense in view of the legal advice offered. The tribunal has noticed that identical claim for the assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the assessee company in terms of an agreement already entered into which was in force throughout the year under consideration. A perusal of the copy of the bill raised by AT T, Singapore on the assessee company placed at page No.93 of the assessee‟s paper book also shows that the narration/description given therein was charges towards remote end support and network charges for period April, 2000 to 31st March, 2001 as per clause (1) of agreement effective 1st April, 2000 . This description given in the relevant bill clearly shows that not only the services charged for in the said bill were rendered by AT T, Singapore to the assessee company in terms of an agreement which was effective from 1.4.2000 but even the charges for the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Section 40(a)(i) was not applicable as the words used were tax has been paid or deducted‟. The contention of the respondent was that they had deducted the TDS on 31st March, 2001, but the same was paid on 23rd November, 2001. Accordingly, it was submitted that Section 40(a)(i) was not applicable. The said contention was rejected upholding that the words paid or deducted‟ cannot be interpreted in the manner as suggested by the respondent assessee. 10. Section 40(a) (i) during the relevant assessment year was as under: 40. Amounts not deductible. Notwithstanding anything to the contrary in Sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head Profits and gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Act, which is payable, (A) outside India; or (B) in India to a non-resident, not being a company or to a foreign company, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-section (1) of Section 200: Provided that where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of Section 200, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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