TMI Blog2017 (1) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... he opinion that the issue needs further verification and investigation. Therefore, in the interest of justice we are restoring back the issue to the file of AO for fresh adjudication Disallowance on non deduction of TDS u/s. 195 - assessee had argued that the payments were reimbursement,that no deduction was to be made with regard to the reimbursement payments - Held that:- Considering the fact that payments in question were reimbursements, we reverse the order of the FAA and decide the issue in favour of the assessee. - I.T.A./6159/Mum/2014 - - - Dated:- 11-1-2017 - Sh.Rajendra,Accountant Member and Amarjit Singh,Judicial Member For The Revenue : Shri S.Senthil Kumaran- DR For The Assessee : Shri Nishant Thakkar PER Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the intention to obtain benefits of enduring nature, that the nature of loss arising on account of forfeiture of deposits/advances was to be construed as capital in nature, that there was no evidence to show the loss, if any, had crystallized in the year under consideration,that the write off was a unilateral Act on-the part of the assessee. Finally.the AO added a sum of ₹ 4.91 lakhs to the income of the assessee. 2. 1. During the course of hearing before the First Appellate Authority (FAA),the assessee argued that it had filed the complete details of write offs vide is letter dt.3.10.13, that the AO had not considered judgment of TRF Ltd. (3231TR397) and Mohan Meakin Ltd.(348 ITR 109),Star Chemicals (Bombay)(P.) Ltd.(3 131TR126).A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details in that regard, in its reply the assessee had filed details about the bad debts/advances written off and nature of the expenditure in dispute,that the AO did not make any enquiry and did not consider the reply while finalising the assessment,that general comments were made by AO in the assessment order,that the FAA had simply endorsed the view of AU without consider - ing the judgments relied upon by the assessee. In these circumstances we are of the opinion that the issue needs further verification and investigation. Therefore, in the interest of justice we are restoring back the issue to the file of AO for fresh adjudication. He is directed to 6159/M/14-Wilhelmsen SM(I)PL afford a reasonable opportunity of hearing to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing tax unless a certificate for AO is obtained for non deduction of tax at source, that the assessee was not expected to step into the shoes of the AO to examine as to whether the receipt in the hands of recipients was income or that whether it was liable to pay tax thereon, that the assessee had not furnished any evidence to prove that the payments were not paid to third parties, that it should have affected the TDS before making the payments.Accordingly, the expenditure debited, of ₹ 69.90 lakhs was disallowed as per the provisions of section 40(a)(i). 3.1. Aggrieved by the order of the AO, the assessee preferred an appeal before the FAA and made elaborate submissions.Before him, it was argued that out of the six items five item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orts Authority of India.(304 ITR 216) ;and Reliance Industries Ltd. (47 CCH 94).The DR supported the order of the FAA. 3.3.We have heard the rival submissions and perused the material before us.We find that the assessee had argued that the payments were reimbursement,that no deduction was to be made with regard to the reimbursement payments made by it,that the AO and the FAA had relied upon the retrospective amendment made to the section 40(a)(i)of the Act for making the disallowance.But,they did not take notice of the fact the amendment was curative in nature. Considering the fact that payments in question were reimbursements, we reverse the order of the FAA and decide the issue in favour of the assessee.Here,we would like to refer to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the subsidiaries as well as the head office organisation would not be income which would be assessable to tax. A similar view was taken in CIT V. Stewards and Lloyds of India Ltd. [1987] 165 ITR.416. 59. We are in respectful agreement with the view expressed by the Delhi and Calcutta High Courts. 4.Ground No.3 deals with mistakes apparent from the record that were not rectified by the AO before us.The AR stated that there were factual mistakes in the calculations/giving credits of the tax deducted at source etc.The AO is directed to pass the necessary order after verifica -tion and after hearing the assessee.Ground No.3 is allowed in favour of the assessee,in part. As a result, appeal filed by the assessee stands part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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