TMI Blog2017 (4) TMI 1517X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld. Accordingly these grounds stands dismissed. Interest paid on late payment of TDS, while computing book profit u/s. 115JB - HELD THAT:- Interest on TDS is not included in the explanation also. We have carefully considered the submissions and perused the records. We find considerable cogency in the submission of the assessee. Further, the interest amount on late payment does not include income tax payment or provision therefore. Therefore the same cannot be covered under the provisions of section 115JB. Hence, the AO is directed to delete the said addition. Accordingly we allow this ground of appeal. - I.T.A. No. 1435/Mum/2015, I.T.A. No. 1826/Mum/2015 - - - Dated:- 5-4-2017 - SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSAIN, JM For the Appellant : Shri Vipul Joshi Ms Dinkle Hariya For the Respondent : Ms. S. Padmaja ORDER Per Sandeep Gosain, Judicial Member: These cross appeals filed by the assessee as well as the revenue are against the order of Ld. CIT (A)-17 Mumbai dated 23.12.15 for A.Y 2011-12. The brief facts of the case are that The Assessee Company is a company engaged in the business of manufacturing and trading of ready-made ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case and in law, the Learned CIT (A) erred in holding that there must be a Principal and Commission Agent relationship between the assessee and acquirer bank to be a commission u/s 194H, by relying on the decision of the Hon ble /Mum/ITAT, Mumbai in the case of SKOL Breweries Ltd. Vs. ACIT (ITA No. 6175/Mum/2011) without appreciating that in the case cited supra, it was held that Section 194H talks about the payment to a recipient which is the income by way of commission or brokerage and no findings has been given therein by the Hon ble ITAT that the relationship between the payer and the payee must necessarily be of a principal and agent, for the applicability of Section 194H. 5. On the facts and in the circumstances of the case and in law, the Learned CIT (A) erred in holding that the payment made to the bank for credit card services is bank charges and not commission and therefore the provisions of section 194H are not applicable to such payments, without appreciating that in the assessee s case bank charges has the character of commission. 6. On the facts and in the circumstances of the case and in law, the Learned CIT (A) erred in holding that the payment made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch in the case of M/s. Daga Capital Management Pvt Ltd ( 26 SOT 603 (Mum)). On the other hand Ld. AR submitted that the Assessing Officer mechanically applied the provision of Section 14A r.w Rule 8(D) without recording his non satisfaction with the correctness of the claim of the Assessee Company in respect of expenditure incurred in relation to the exempt income. The Assessee Company submitted that the disallowance made by the Assessing Officer in the assessment order was based on mere assumption, surmises and conjectures. The Assessee Company submitted that while making disallowance u/s 14A, the Assessing Officer has to record his objective satisfaction and give a clear cut finding as to how the disallowance computed by the Assessee is not correct. Without such exercise, no disallowance u/s 14A can be sustained. The Assessee Company submitted that its own funds were utilized towards making investments and the A.O has not shown that the investments were out of interest bearing funds. The Assessee Company also submitted that a majority of the investments of the Assessee Company are in the shares of its subsidiaries/associate companies and no dividends were declared by suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eversed by the CIT(A). As per the facts of the case, during the course of the assessment proceedings, the Assessing Officer disallowed the commission on credit card paid to various banks under Section 40(a)(i) of the Act by holding that the credit card transaction was in nature of commission for providing complex services by using sophisticated professional skill and technology and consequently the provisions of section 194H of the Act were attracted. The Assessing Officer also held on a without prejudice basis that the commission was paid for technical services subject to deduction of tax under section 194J of the Act. The Ld. DR relied on the Order of the Assessing Officer whereas the Ld.AR relying on the decision of the CIT(Appeals) as well as decisions of the co-ordinate bench of the Tribunal in the case of ACIT v. Jet Airways India Ltd (146 ITD 682) and Delhi Tribunal in the case of JDS Apparels (P.) Ltd. (370 ITR 454), contended that the aforesaid commission was not subject to deduction of tax under section 194H/section 194J. We have heard the counsels for both the parties on this ground and we have also perused the material placed on record as well as the orders pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in terms of section 115JB. Upon assessee's appeal Ld. CIT(A) upheld the issue due to no grievances and submission was made by the assessee. We have heard the rival contentions in light of the material produced and precedents relied upon. Ld. D.R. relied upon the order of the AO., Ld. Counsel of the assessee on the other hand relied on the order of Dongnam Logistics India Pvt. Ltd. vs Department Of Income Tax I.T.A. No. 1839/Del/2012. The assesse submitted that the ratio of the above case is very similar to the facts of the case and as per explanation [1] of section 115Jb which reproduced as- For the purposes of this section, book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by- (a) the amount of income-tax paid or payable, and the provision therefor; Therefore, it is clear that interest on TDS is not included in the explanation also. We have carefully considered the submissions and perused the records. We find considerable cogency in the submission of the assessee. Further, the interest amount on late payment does not include income tax payment or provision therefor. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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