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TMI Blog2015 (12) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... the issues involved in these appeals are common, these are clubbed together, heard together and disposed off by this common order for the sake of convenience. 2. The first common issue in Revenue's appeal is with regard to disallowance of sales promotion expenses for nondeduction of TDS by invoking the provisions of sec.40(a)(ia) of the Act. 3. The assessee company claimed sales promotion expenditure in the profit and loss account. However, it was not subjected to TDS. The assessee took a plea before the Assessing Officer that the provisions of sec.194H are not applicable to these payments and this is only a provision determined on the product sold to a dealer on the principal-toprincipal basis and this dealer is not an agent, who ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them and these expenditure are purely sales promotion expenses allowable u/s.37(1), and the provisions of sec.194H cannot be applied and he deleted the addition made by the Assessing Officer u/s.40(a)(ia) of the Act. Against this, the Revenue is in appeal before us. 5. We have heard both the parties and perused the material on record. In our opinion, the issue is to be decided by the Assessing Officer in the light of the Special Bench decision of the Tribunal in the case of Merilyn Shipping and Transports vs. Addl. CIT (2012) 136 ITD 23 (Visakhapatnam) , wherein it was held that "provisions of section 40(a)(ia) are applicable only to the amounts of expenditure which are payable as on the date 31st March of every year and it cannot be invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factoring charges. The bills receivable by the assessee are discounted with the Canbank Factors Ltd. In the process, the amounts, which are going to be received by the assessee on a later date from its clients, discounted for a price and the proceeds are realized immediately. Thus, the sale proceeds are received at a lesser amount, but at an earlier date than the actual due date. The amount so foregone in the process is the factoring charges or bill discounting charges. The amount so foregone may represent the compensation for receiving the amounts in advance. It is not an amount actually paid by the assessee and it is a loss suffered by the assessee. In our opinion, the issue is to be decided as discussed in the case of N. Palanivelu v. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he file of the Assessing Officer for fresh consideration. 8. Coming to the ground in Cross objection with regard to applicability of provisions of sec.40(a)(ia) of the Act, we are of the opinion that this ground does not need adjudication in view of our finding on this issue in Revenue's appeal. 9. The assessee has raised one more ground in CO is with regard to depreciation on aluminium cans and crates at 50%. 10. The assessee claimed depreciation at 50% on aluminium cans and crates. The Assessing Officer observed that as per New Appendix-II applicable for the assessment year 2008-09, only containers made of glass and plastic used as refills is eligible for depreciation @ 50%, where the assessee claimed depreciation at 50% on alumini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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