New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (7) TMI 988 - ITAT HYDERABAD

2015 (7) TMI 988 - ITAT HYDERABAD - TMI - Revision u/s 263 by CIT(A) - A.O. has completed the assessment without any verification or basis for arriving at the conclusion that the expenditure claimed by the assessee is allowable under sections 37(1) or not hit by section 195 - Held that:- We find merit in the contention of the learned D.R. It is observed that the assessment made by the A.O. under section 143(3) was held to be erroneous as well as prejudicial to the interest of the revenue by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as made by the A.O. on this aspect. In the absence of any such enquiry made by the A.O. on this vital aspect during the course of assessment proceedings, we find ourselves in agreement with the Ld.CIT that assessment made by the A.O. was erroneous as well as prejudicial to the interest of the Revenue calling for revision under section 263. We, therefore, uphold the impugned order passed by the Ld.CIT under section 263 and dismiss the appeal filed by the assessee. - Decided against assessee. - IT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of income for the year under consideration was filed by it on 01.10.2010 declaring total loss of ₹ 1,85,77,915. In the assessment originally completed under section 143(3) on 28.03.2013, the total income of the assessee was determined by the A.O. at Rs.(-)1,74,65,307. The record of the said assessment came to be subsequently examined by the Ld.CIT and on such examination, he was of the opinion that the order passed by the A.O. under section 143(3) suffered from the following error which wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t income arising on account of commission payable to agents outside India even on sales made outside, is deemed to accrue and arise in India and taxable in view of the provisions of section 5(2)(b) r.w.s.9(1)(i). 2.1. The Ld.CIT therefore issued a notice under section 263 requiring the assessee to show cause as to why the assessment made by the A.O. under section 143(3) should not be revised on account of the above error. In reply, the following explanation was offered by the assessee. At the ou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

set of facts relevant to that case only and it is not the law laid down by the Apex Court in the matter. Be that as it may, we invite your kind attention to the decision of Hyderabad Bench of ITAT in the case of DCIT versus Divi s Laboratories Ltd., (182 ITAT-Hyd-INTL) wherein it was held that commission paid to a foreign agent without deduction of tax for services rendered outside India cannot be disallowed under section 40(a)(ia) of the Income Tax Act, 1961. You may kindly appreciate that sect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

agement invested in India ar not satisfied in the present case. Withdrawal of CBDT Circular No. 23 and 786 do not provide any support to tax department in disallowing such expenditure. The non-resident agent of Indian exporters operates in his own country and no part of his income arises in India and commission is usually routed to him through banking channels in India. Therefore the same is not received by him or on his behalf in India. Accordingly such a foreign agent is not liable to tax in I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re that after the aforesaid decision of Supreme Court the legislation amended the explanation to section 9 (2) of the Act with retrospective effect. Despite the amendment the Karnataka High Court in the case of Jindal Thermal Power Co Ltd versus DCIT (321 ITR 31) and held that the decision rendered by the Supreme Court in the case of Ishikawa Jima Harima Heavy Industries Ltd versus DIT (288 ITR 408) still remains valid. Finally, we submit that it is well settled law that the provisions of tax tr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

T for the following reasons given in paragraph 6 of his impugned order. 6. I have gone through the facts of the case, assessment record and submissions of the A.R. on the issue involved. The case was picked up for scrutiny to examine the genuineness of commission expenses claimed. However, it is seen that though during the course of assessment, the A.O. had collected information regarding commission payments made to outside agents, the A.O. failed to enquire into the nature of services rendered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the order to be erroneous. While the contentions of the authorised representative may be persuasive, it is relevant to note that such arguments would have to be considered only after a proper application of mind on the part of the A.O. on whether the allowability or otherwise of a particular expenditure claimed is first decided. In the instant case, the claim of the assessee has been allowed without examining the nature of services rendered, whether the agents are resident agents or foreign agen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

passed by the A.O. under section 143(3) with a direction to the A.O. to re-do the same as per Law after proper examination of the facts and application of appropriate Law. Aggrieved by the order of the Ld.CIT passed under section 263, the assessee has preferred this appeal before the Tribunal. 3. We have heard the arguments of both the sides and also perused the relevant material on record. The Ld. Counsel for the assessee at the outset has submitted that the issue raised in the present case by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e is not chargeable to tax under the provisions of the Act. The learned D.R. on the other hand, has contended that the error as pointed out by the Ld.CIT vide his impugned order is that the A.O. failed to enquire into the nature of services rendered before allowing the claim of the assessee for deduction on account of payment of commission to the non-resident agents. He has contended that this vital aspect was not enquired into by the A.O. as found by the Ld.CIT from the assessment record and th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version