TMI Blog2015 (10) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... d Godrej and Boyce Manufacturing Co. Ltd., Vs. DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT). Thus the matter needs re-visit to the Assessing Officer for fresh adjudication. The Assessing Officer shall re-compute dis-allowance u/s.14A after taking into consideration the entire facts of the case and the well settled law. - Decided in favour of assessee for statistical purposes. Disallowance u/s. 40(a)(i) - payment of overseas commission without deduction of tax at source - CIT(A) deleted the addition - Held that:- The contentions of the assessees that commission is paid on the export of garments for orders procured by foreign agents; the commissions were paid outside India through normal banking channels; and that the foreign agents do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 428/Mds/2014, 218/Mds/2014, 219/Mds/2014, 431/Mds/2014, 432/Mds/2014 - - - Dated:- 26-9-2014 - SHRI A.MOHAN ALANKAMONY AND SHRI VIKAS AWASTHY, JJ. For the Appellant : Shri Vikram Vijayaraghvan, Advocate For the Respondent: Shri Guru Bhashyam, JCIT ORDER Per: Bench: ITA Nos.216 217/Mds/2014 have been filed by M/s.Chemise India Pvt. Ltd., assailing the orders of Commissioner of Income Tax(Appeals)-I, Chennai dated 21-11-2013 for the Assessment Years (AYs) 2008-09 2009-10, respectively. The Revenue has filed cross-appeals for the AYs under consideration in ITA Nos.427 428/Mds/2014. ITA Nos.218 219/Mds/2014 have been filed by Smt.Radha Daga, assailing the orders of Commissioner of Income Tax(Appeals)-I, Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Rule 8D has not recorded satisfaction in respect of claim of the assessee. The ld.Counsel further contended that while making dis-allowance u/s.14A, interest on car loan, bank negotiation charges, interest towards export and bank credit which are attributed for a specific loan cannot be subject of dis-allowance u/s.14A. In order to support his contentions, the ld.Counsel placed reliance on the order of the co-ordinate bench of the Tribunal in the case of Shriram Properties Pvt. Ltd., Vs. ACIT, reported as 60 SOT 75 (Chennai), judgment of the Hon'ble Punjab Haryana High Court in the case of CIT Vs. Hero Cycles Ltd., reported as 323 ITR 518 and the judgment of Hon'ble Madras High Court in the case of CIT Vs. Hotel Savera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd have perused the orders of the authorities below. We have also examined the decisions on which both sides have placed reliance. From the pleadings and submissions made by both sides, three issues have emerged for adjudication in the present set of appeals: i. Dis-allowance u/s.14A r.w.Rule 8D confirmed by CIT(Appeals); ii. Dis-allowance u/s.40(a)(i) deleted by CIT(Appeals); and iii. Foreign Exchange Fluctuation loss dis-allowance upheld by CIT(Appeals). 6. The assessees in all the four appeals have assailed the findings of CIT(Appeals) in upholding the dis-allowance made by Assessing Officer u/s.14A r.w.Rule 8D. A perusal of the assessment order in ITA No.216/Mds/2014 AY.2008-09 shows that the assessee has made di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied after examining the facts of each and every case. Unless proximate connection between the expenditure incurred and the income not forming part of total income is established, the provisions of section 14A(2) (3) and Rule 8D will not be operative. [CIT Vs. Walfort Share and Stock Brokers P. Ltd., 326 ITR 1 (SC) and Godrej and Boyce Manufacturing Co. Ltd., Vs. DCIT 328 ITR 81 (Bom)]. In our considered opinion, the matter needs re-visit to the Assessing Officer for fresh adjudication. The Assessing Officer shall re-compute dis-allowance u/s.14A after taking into consideration the entire facts of the case and the well settled law. 7. The assessee in appeal ITA No.219/2014 for AY.2009-10 has raised ground with regard to foreign ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idu (P) Ltd., (supra). Accordingly, this ground of appeal of the assessee is allowed for statistical purpose. 8. The Revenue in its appeals has assailed the findings of CIT(Appeals) in deleting dis-allowance u/s.40(a)(i) in respect of payment of overseas commission without deduction of tax at source. The CIT(Appeals) after considering the submissions of the assessees has held that the payments made by the assessees to the foreign agents is in the nature of commission and not in the nature of fee for technical services. The contentions of the assessees that commission is paid on the export of garments for orders procured by foreign agents; the commissions were paid outside India through normal banking channels; and that the foreign agents ..... X X X X Extracts X X X X X X X X Extracts X X X X
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