Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Commissioner of Income Tax-II Versus Kajaria Ceramics Ltd.

2015 (9) TMI 328 - DELHI HIGH COURT

Interest free deposit in favour of the sister concern - excess security deposit purportedly made by the Assessee in respect of renting of the premises from DEWPL - liability to TDS under Section 194H - Held that:- The making of the interest free deposit in favour of the sister concern was its business decision and it gained no undue advantage. On the second issue, it was held that the elements of income were not embedded in the reimbursement made to its sister concern and therefore the Assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ns the travelling expenses paid to dealers. There was no basis for AO to come to the conclusion that this payment was actually in the nature of commission to the agents. It was noticed that the entitlement to foreign travel was not proportionate to the volume of business conducted through a particular dealer/sub-dealer. Anyone who achieved the actual sale target was entitled to visit the foreign destination. In order to characterize the payment as commission, for the purposes of Section 194H of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gh, Junior Standing counsel and Mr Shikhar Garg, Adv. For the Respondent : Mr Prakash Kumar, Adv. ORDER 1. ITA No. 35 of 2014 is an appeal by the Revenue against the order dated 12th July 2013 passed by the ITAT in ITA No. 4879/Del/2011 for the assessment year ('AY') 2008-09. ITA No. 533 of 2014 is directed against the order dated 7th February 2014 passed by the ITAT in ITA No. 1142/Del/2013 for AY 2009-10. 2. The Respondent Assessee is a company engaged in the business of manufacturing .....

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 agreement also provided that the Assessee would pay an interest free security deposit of ₹ 5.35 crores. 3. The AO was of the view that the interest free deposit was far in excess of the normal deposit of security and therefore was an undue favour given to Assessee's sister concern. The AO calculated the excess security deposit at ₹ 5.11 crores, computed the interest thereon @12% and held the interest expenses of ₹ 61,32,000 inadmissible. 4. It was further noted by the AO .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act. 5. Aggrieved by the above order of the AO for AY 2008-09, the Assessee filed an appeal before the Commissioner of Income Tax (Appeals) ('CIT (A)'). The appeal was allowed by the CIT (A) by holding that the making of the interest free deposit in favour of the sister concern was its business decision and it gained no undue advantage. On the second issue, it was held that the elements of income were not embedded in the reimbursement made to its sister concern and therefore the Assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssion, which would be liable to TDS under Section 194H of the Act. Accordingly, the said amount was disallowed under Section 40(a) (ia) of the Act. The AO also disallowed the interest calculated on the excess security deposit made with DEWPL and accordingly made an addition of ₹ 81 lakhs. 7. In both the appeals one common question is common regarding the excess security deposit purportedly made by the Assessee in respect of renting of the premises from DEWPL. The Assessee had taken the pre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| 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