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2015 (6) TMI 901 - ITAT AHMEDABAD

2015 (6) TMI 901 - ITAT AHMEDABAD - TMI - Disallowance of building repair expenses - revenue v/s capital - Held that:- The assessee has only replastered, re-furnished and re-plumbered its factory building. This is not the Revenue’s case that the same has caused any increase in capacity of the building or otherwise. The Assessing Officer has been heavily swayed by the quantity of the material used (supra). We observe that this factor is not relevant in deciding such an issue of capital and revenu .....

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commission expenditure u/s.40(a)(i) paid to foreign agents in lieu of procuring export order - Held that:- The assessee places on record agreement dated 8th December, 2005 highlighting its payees obligations, Revenue therein fails to point out involvement of any technical component therein. The assessee’s overseas agents have procured export orders and provided logistic support through adequate publicity etc. There is not even an iota of evidence to prove any technical service actually rendered .....

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lete the impugned disallowance. - Decided in favour of assessee. - ITA No.1855/Ahd/2011 - Dated:- 24-4-2015 - Shri G. D. Agarwal And Shri S.S. Godara JJ. For the Appellant : Shri Dinesh Singh, Sr.D.R. For the Respondent : Shri S.N. Soparkar, A.R. ORDER Per: S. S. Godara, JUDICIAL MEMBER This assessee s appeal for A.Y.2008-09 arises from order of the CIT(A)-VI, Ahmedabad dated 27.06.2011 in case no.CIT(A)-VI/ACIT.Cir.1/170/10-11 confirming Assessing Officer s action holding expenditure on buildin .....

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ficer completed a regular assessment on 30.11.2010 inter alia holding assessee s claim on building repair of ₹ 17,11,804/- as capital expenses and disallowed commission paid to foreign export agents u/s.40(a)(i) amounting to ₹ 10,96,445/- for non deduction of TDS. 3. The CIT(A) has affirmed the Assessing Officer s action. This leaves the assessee aggrieved. 4. We come to assessee s first substantive ground relating to disallowance of building repair expenses. The Assessing Officer co .....

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rve and maintain already existing assets and not to have creates a new one. The Assessing Officer took into account volume of the construction material involving 600 bags of cement, 12,000/- bricks, 1300 boxes of ceramic glazed tiles and labour expenses of ₹ 5 lac to hold that the repair in question was not current repair u/s. 3B Explanation. He disallowed total repair expenditure amounting to ₹ 18,01,819/- and held it to be capital in nature. The Assessing Officer also appears to ha .....

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.e., whether capital or revenue as per the Revenue and assessee, respectively. The assessee s stand from the very beginning claims it to be not resulting any structural change in the factory building, non carrying out of any civil work, entire renovation meant to replace the old normal wear/tear of the building, non appointment of any civil engineer, no steel item being used and no new building or asset of different size and shape to have come up. The lower authorities are fair enough in not spe .....

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ntage. We quote hon ble Bombay high court decision in CIT vs. DBS Corporate Services (P) Ltd., (2014) 43 taxmann.com in support. The Revenue does not point out any case law to the contrary. Thus, we accept the assessee s relevant ground and delete the impugned disallowance of ₹ 18,01,899/- by treating these building repair expenses as revenue expenditure liable to be treated as current repair u/s.30 of the Act. 6. This leaves us with the latter ground of disallowance of commission expendit .....

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hands without there being any business connection u/s.9(1) so as to attract Section 195. The Assessing Officer went through the agreement s clauses to conclude that the recipients had not only acted as commission agents but also provided technical services. This resulted in the impugned section 40(a)(ia) disallowance of ₹ 10,99,445/-. The assessee has failed in lower appellate order as well. 8. Heard both sides. Records perused. The Board had issued circular no.786 dated 7.2.2000 exemptin .....

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that the Board s circular dated 22.10.2009 withdrawing the earlier one exempting foreign agencies commission from TDS deduction has to be treated as having prospective effect only. We rely on case law of M/s. Ajit Impex vs. DCIT (ITA No.2890/Ahd/2010 order dated 29.04.2014 in support. 8.1 At this stage, the Revenue argues that the assessee had availed technical services from its overseas agents to attract Section 9(1)(vii) of the Act. The assessee places on record agreement dated 8th December, .....

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