TMI Blog2013 (7) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the Tribunal noted that the assessee had to its disposal, own interest free funds many times over the investment in question. As per the balance sheet as on 31st March 2005, the assessee had interest free fund of Rs. 929.57 Crores - Decided against Revenue. Deduction u/s 80IB - Tribunal granted deduction - Held that:- Following decision of Nirma Industries Limited v. Deputy Commissioner of Income-Tax [2006 (2) TMI 92 - GUJARAT High Court] - Decided against Revenue. - TAX APPEAL NO. 223 of 2013 - - - Dated:- 3-4-2013 - For the Appellant : Ms. Paurami B. Sheth. For the Respondent : None. ORDER:- PER : AKIL KURESHI Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Ahmedabad [ Tribunal for short] dated 21st September 2012, raising following questions for our consideration :- [1] "Whether the Appellate Tribunal is right in law and on facts in confirming deletion of disallowance of Rs. 9,34,95,200/- on account of sales commission expenses u/s. 37 of the I.T Act ? [2] "Whether the Appellate Tribunal is right in law and on facts in deleting disallowance u/s. 14A of the I.T Act in respect of interest expenses incurred for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned judgment, confirmed. The Tribunal observed as under :- 2.6 From the above para of the order of learned CIT [A], we find that a clear finding is given by learned CIT (A) that the assessee has given evidence that the recipient provided information in respect of services which helped the sales to mature and realize and therefore, payment of commission is justified except for six parties. In respect of these six parties, it is noted by learned CIT (A) that the Assessing Officer after inquiry has brought on record in respect of these six customers, the agents had no role in achieving the sales and these customers directly approached the assessee for all transactions. The income of all the units of the assessee is eligible for deduction under Section 80IB of the Income-tax Act, 1961. We also find that in the assessment order, the Assessing Officer has allowed additional deduction u/s. 80-IB in respect of various additions made by him in the assessment and hence, this contention of the assessee is supported by facts on record that there is no motive to save taxes by paying commission since the units of the assessee are eligible for deduction @ 100% u/s. 80-IB. In respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company and the payments were duly reflected in their income returns. 2.6 Under the circumstances, we have no reason to interfere. This question is therefore, not entertained. 3. Question [2] pertains to disallowances made by the Assessing Officer under Section 14A of the Act in respect of interest expenses incurred for investments made in subsidiaries and administrative expenses. CIT [A] deleted such disallowances, upon which, Revenue approached the Tribunal. The Tribunal rejected Revenues appeal, making following observations :- 3.5 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. Regarding the grounds raised by the revenue in respect of disallowance of interest expenditure made by the A.O under Section 14A and deletion made by learned CIT (A), we find that no interference is called for in the order of learned CIT (A). We hold so because we find that with regard to the investment of Rs. 5907.18 lacs in foreign subsidiaries, no disallowance can be made u/s. 14A because dividend income from foreign subsidiaries is taxable in India. Regarding balance investment of Rs. 38 crores approximately in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5.2 We have considered the rival submissions and we find that this issue is now squarely covered in favour of the assessee by this judgment of Honble Gujarat High Court and hence, we decline to interfere in the order of learned CIT (A) on this issue. Ground No. 4 of the revenue is rejected. 5. We are in agreement with the view of the Tribunal that the issue is covered by the decision of this Court in case of Nirma Industries Limited [Supra]. In the said decision, the Court has held and observed as under :- However, the parties having made elaborate submissions the matter may be examined from a slightly different angle. When the assessee enters into a contract for sale of its products it could either stipulate (a) that interest at the specified rate would be charged on the unpaid sale price and added to the outstanding till the point of time of realisation, or (b) that in case of delay the payment for sale of products worth Rs.100/- to carry the sale price of Rs.102/- for first month's delay, Rs.104/- for second month's delay, Rs.106/- for third month's delay and so on. If the contention of revenue is accepted, merely because the assessee has described the additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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