Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2016 (3) TMI 244

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... oreign 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 deduct TDS on foreign payments. This issue is covered by the decision of Hon’ble Supreme Court in the case of GE India Technology Centre P. Ltd. v. CIT (2010 (9) TMI 7 - SUPREME COURT OF INDIA ) in favour of assessee Disallowance of Nursery Expenses - revenue v/s capital expenses - Held that:- We find that the assessee has incurred expenditure for replantation in the existing area and plants grown in the nursery were used for replacement of dead plants within the plantation area. This fact 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 co .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ssee s own case in ITA No. 589/K/2012 for AY 2007-08 dated 19.12.2013 wherein Tribunal has allowed as under: Aggrieved, now Revenue came in appeal before us. 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 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 of Revenue is against the order of CIT(A) in deleting the addition made on account of cess on green leaf. For this, revenue has raised following ground no. 2: 2. Whether on the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of ₹ 67,90,287/- on cess on green leaf without considering the fact that expenses on account of cess on green le .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 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 escape liability is to get no deduction certificate or lower rate deduction certificate from AO. Appellant on the other hand has submitted that this issue was further clarified by Hon ble Supreme Court in case of GE India Technology Centre P Ltd. Vs. CIT in 44 DTR Supreme Court 201,in which Supreme Court has clarified that obligation to deduct tax at source arises u/s.194 only when there is any sum chargeable under the Act. and CBDT circular has also clarified, that TDS provision will not applied in 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 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... y appellant and also decision relied upon of the Hon ble jurisdictional High Court. The expenditure claimed by appellant is incurred for the purpose of replantation in the existing area and 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, therefore, by AO is directed to be deleted and claim of appellant is allowed. 11. We find that the assessee has incurred expenditure for replantation in the existing area and plants grown in the nursery were used for replacement of dead plants within the plantation area. This fact 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 disall .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates