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ACIT, Circle-1 (1) , Panaji Versus M/s Coral Clinical Systems

2015 (10) TMI 2182 - ITAT PANAJI

Addition u/s. 40(a)(ia) r.w.s. 194C - payment of demurrage to parties in India - CIT(A) deleted addition - Held that:- No specific error in the order of the Ld. CIT(A) could be pointed out by the DR. He could not bring any material on record to show that the amount were not reimbursement of expenses paid by the clearing and forwarding agents for freight to the airlines. In the absence of the same, we do not find any infirmity in the order of the Ld. CIT(A), which is hereby confirmed and the grou .....

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UMBAI] - Decided in favour of assessee. - ITA Nos. 322, 323 & 324/PNJ/2014 - Dated:- 9-10-2015 - N. S. Saini, AM And George Mathan, JM For the Petitioner : Shri Lorence J Malekar, CA For the Respondent : Shri B Balakrishna, DR ORDER Per N. S. Saini, Accountant Member These are the appeals filed by the Revenue against the consolidated order of the ld. CIT (A), Panaji, dated 30/06/2014 for the A.Ys. 2009-10, 2010-11 & 2011-12. 2. The first common ground of appeal in all these appeals is that t .....

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uction for local freight and export freight charges. The assessee explained that the clearing and forwarding agents were appointed to provide services to facilitate the movement of goods for sale/export by performing various functions such as arranging the documentation, finding carrier etc., for which they charge fees/ remuneration. They are not the transporters/carriers of the goods, but only arrangers for the same. In the course of performing their duties as facilitators, they incur expenses .....

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s the parties to the contract for the actual expenses paid are the party who is receiving the reimbursement and the party who rendered service to that party. It was further submitted that service charges paid to the clearing and forwarding agents for the services rendered by them on principal to principal basis and not on reimbursements. 4. The Assessing Officer, however, was not satisfied with the explanation of the assessee and the Assessing Officer held that as per the amended provisions of s .....

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ing and forwarding agents is the actual air freight paid by them to the airlines. The assessee contended that the clearing and forwarding agents presents the actual air freight bill to claim the reimbursement and this reimbursement does not have any service charges or any element of profit embedded in it and therefore, on the facts, the provisions of sec. 194C or the CBDT circular is not applicable. He held that in the case of M/s. Zephyr Biomedicals for A.Y. 2009-10, he deleted the disallowance .....

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of ₹ 6,79,102/- for the A.Y. 2009-10, ₹ 11,47,991/- for the A.Y. 2010-11 and ₹ 4,52,620/- for the A.Y. 2011-12 were not reimbursement of expenses paid by the clearing and forwarding agents for freight to the airlines. In the absence of the same, we do not find any infirmity in the order of the Ld. CIT(A), which is hereby confirmed and the ground of appeal of the Revenue is dismissed. 8. Ground No.2 of the appeal in all the years under consideration is directed against the orde .....

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ng them as income derived from industrial undertaking. The Assessing Officer relying on the decision of the Hon'ble Supreme Court in the case of Sterling Foods Vs. CIT reported in 237 ITR 579 , Pandian Chemicals Ltd. Vs. CIT reported in 262 ITR 278 and Liberty India Vs. CIT reported in 317 ITR 218 held that tax incentive is incentive profit and the same is not eligible for deduction u/s. 80IB of the Act. 10. On appeal, Ld. CIT(A) following the decision of the Hon'ble Gauhati High Court i .....

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order of the Assessing Officer and the AR supported the order of the Ld. CIT(A). 13. We find that on a similar issue, the Bombay Bench of the Tribunal in the case of M/s. Diamond Tool Industries Vs. JCIT in I.T.A.No. 136/MUM/2009 vide order dated 14/12/2011, held as under:- "6. We have considered the rival arguments made by both the sides, pursued the orders of the Assessing Officer and the CIT (A) and the paper book filed on behalf of the assessee. We find the Hon'ble Gauhati High Cou .....

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as to be taken into account for purposes of section 80-IB. Following the ratio of the said decision, we are of the considered opinion that there is an inextricable link between the manufacturing activity, the payment of sales tax and the sales tax incentive. Therefore, in our opinion, such sales tax incentive which has been retained by the assessee from the Sales Tax collected has to be held as derived from the industrial undertaking and consequently is eligible for deduction u/s 80-IB of the Ac .....

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.O.Nos. 52 & 53/HYD/2014 vide order dated 21/11/2014 , held as under:- "8. Having considered rival submissions and perused the orders of revenue authorities as well as other materials on record and after having applied our mind to the decisions relied upon by the parties, we do not find any infirmity in the order of ld. CIT(A) in allowing benefit u/s 80IB to assessee on excise duty refund for the following reasons. 9. It is clear from the assessment order that AO has denied 80IB deducti .....

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as per the industrial policy resolution declared for the state of J&K and consequent to Central Excise Department Notification, assessee became eligible for refund of excise duty paid after set off of CENVAT credit. Therefore, in sum and substance, it is only a refund of an amount already paid by assessee and reduced from the sale price while computing the profit. Therefore, when assessee gets refund of an expenditure already incurred the same has to be deemed to be the profits and gains of .....

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