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2015 (10) TMI 2182 - ITAT PANAJI

2015 (10) TMI 2182 - ITAT PANAJI - TMI - 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 .....

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ries Vs. JCIT [2011 (12) TMI 534 - ITAT MUMBAI] - 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 .....

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c found that the assessee has claimed deduction 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 dut .....

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ithin the ambit of sec. 194C of the Act as 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 hel .....

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hat the amount reimbursement to the clearing 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 .....

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aterial on record to show that the amount 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 c .....

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d 80IB benefit on the above income treating 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 decisio .....

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in appeal before us. 12. DR supported the 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. .....

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ly, held that the refund of excise duty has 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 e .....

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.T.A.No. 1147 & 1157/HYD/2014 & C.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 assessm .....

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assessee. It is also not in dispute that 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 .....

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