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2016 (3) TMI 244 - ITAT KOLKATA

2016 (3) TMI 244 - ITAT KOLKATA - TMI - Allowance of puja expense and temple expenses - whether such expenses are non-business expenditure? - Held that:- We find that the puja expense incurred on occasion of Diwali and Mahurat are customary expenses and going by the turnover of the assessee-company and the nature of the business of the assessee, we feel that these are incurred for the harmony of the assessee-company’s employees and these are for the purpose of business. Similar are the reasons f .....

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ed in favour of assessee

Non-deduction of TDS on expenses of commission payment u/s. 195(1) - Held that:- The commission paid to foreign agents, who are not having permanent establishment business place in India and they are providing services outside India and even the payment is directly made outside India in foreign exchange. According to assessee, assessee's income does not accrue or arise in India and once income does not accrue or arise in India, the assessee is not liable to de .....

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act has not been denied by revenue before CIT(A) or before us now. The AO also noted that this is re-plantation in the existing area and replacement of dead plants but by going through the volume of expenditure he made disallowance and Hon’ble jurisdictional High Court in the case of Tasati Tea Ltd., (2003 (2) TMI 42 - CALCUTTA High Court ) has considered the issue and allowed the claim of replacement of plants in existing area against dead plants. The expenditure claimed by appellant is to be a .....

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in favour of assessee - ITA No. 905/Kol /2013 - Dated:- 29-2-2016 - Shri N. V. Vasusdevan, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Appellant : Shri Niloy Baran Som, JCIT, SR-DR For the Respondent : Shri B. K. Poddar, FCA ORDER Per Waseem Ahmed, Accountant Member :- This appeal by the Revenue is arising out of order of Commissioner of Income Tax (Appeals)-IV, Kolkata in appeal No.212/CIT(A)-IV/2011-12 dated 31.01.2013. Assessment was framed by JCIT (OSD), Circle-4, Kol .....

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10/- since such expenses are non-business expenditure and the assessee company could not establish the relationship between the necessity of such expenditure and the purpose of the business carried on by the assessee company. 2. We have heard Ld. Counsel for the assessee and gone through facts and circumstances of the case. Briefly stated facts are that the AO disallowed puja expenses and temple expenses for the reason that these are not for a legitimate requirement of the business. The CIT(A) a .....

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e-company and the nature of the business of the assessee, we feel that these are incurred for the harmony of the assessee-company s employees and these are for the purpose of business. Similar are the reasons for incurring temple expense. Hence, we confirm the order of CIT(A) and this issue of Revenue s appeal is dismissed. As the issue is covered in assessee s own case, we confirm the order of CIT(A). Accordingly, this issue of Revenue s appeal is dismissed. 4. The second issue in this appeal o .....

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decision of Calcutta High Court in the case of AFT Industries Ltd. - vs- CIT (270 ITR 167) in the light of which Ld. CIT(A) decided the issue n favour of the assessee. 5. At the outset, Ld. Counsel for the assessee relied on the decision of Coordinate Bench of this Tribunal in assessee s own case in ITA No. 589/K/2012 for AY 2007-08 dated 19.12.2013, wherein Tribunal has allowed as under: 5. We find that this issue is covered by the decision of Hon ble jurisdictional High Court in the case of AF .....

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smissed. 6. The third issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance made by AO on account of non-deduction of TDS on expenses of commission payment u/s. 195(1) of the Act thereby invoking the provisions of section 40(a)(ia) of the Act. For this, Revenue has raised following ground no. 3: 3. Whether on the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of ₹ 552692/- on account of non deduction of TDS u/ .....

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ommission paid to foreign agent as non allowable expenses as assessee failed to deduct TDS and he disallowed the commission to the extent of ₹ 11,35,554/-. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of assessee by observing vide para-7.1 of his order as under:- 7.1 It is seen that AO made this disallowance on the basis of Supreme Court decision in case of M/s. Transmission Corporation of India reported in 239 ITR 587 wherein it was held that only way to escap .....

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case where such income is not taxable in India. In this case, as the income does not arise in India and the commission is paid to those foreign agents, who have no permanent establishment or business place in India and services are also rendered outside India. It is very clear that no tax is deductible in case where the non-resident agents operate outside the country and no part of his income arises in India. In view of the circular No. 23 and 786, the company was under no obligation to deduct t .....

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ia, the assessee is not liable to deduct TDS on foreign payments. According to him, this issue is covered by the decision of Hon ble Supreme Court in the case of GE India Technology Centre P. Ltd. v. CIT 44 DTR 201 (SC). As the issue is covered in favour of assessee by the decision of Hon ble Supreme Court, we have no reason to interfere in the order of CIT(A) and we confirm the same. This issue of revenue s appeal is also dismissed. As the issue is covered in assessee s own case in A.Y. 2007-08 .....

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48465/- as revenue expenditure while the AO held the same to be capital in nature in view of the judgement of Calcutta High Court in the case of M/s Tasati Tea Co. Ltd. 9. We have heard Ld. Counsel for the assessee and gone through facts and circumstances of the case. Briefly stated facts are that the AO during the course of assessment proceedings disallowed nursery expenses amounting to ₹ 35,48,465/- by attributing the same to be of enduring nature for long term plantation of tea gardens .....

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plants grown in the nursery were used for replacement of useless or dead plants within the plantation area. As the re-plantation is an essential part of the growing and manufacturing tea, and nothing contrary to the fact is brought on record by the AO, the expenditure claimed by appellant is to be allowed as revenue expenditure. As per facts available, the area under cultivation also remains the same, and therefore, the claim of expenditure is allowable as revenue expenditure. The addition made, .....

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sallowance and Hon ble jurisdictional High Court in the case of Tasati Tea Ltd., (supra) has considered the issue and allowed the claim of replacement of plants in existing area against dead plants by observing as under: But, however, we are not inclined to interfere with the order allowing the expenditure of ₹ 4,68,615/- as a revenue expenditure, though on different grounds, inasmuch as if the plants are raised and maintained in a nursery for being utilized for the purpose of re-plantatio .....

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sion of the plantation nor can it be treated to be an investment or expansion adding to the capital already invested. On the other hand, it would be a maintenance of the plantation itself and, therefore, is a revenue expenditure. In view of the above facts and circumstances and following the case law of Hon ble Jurisdictional High Court in the case of Tasati Tea Ltd., (supra), we uphold the order of CIT(A) and this issue of Revenue s appeal is dismissed. 12. The fifth issue in this appeal of Rev .....

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