AO has not given any reason for disallowing the claim. We also find that the AO has simply followed the findings of earlier assessment years. As similar additions in earlier assessment year has been deleted by Ld. CIT(A) which has been accepted by the Revenue as Committee on Dispute declined to give permission to the department to proceed with the appeal , findings of the Ld. CIT(A) become final. As Ld. CIT(A) has rightly pointed out that after the amendment in Section 36(1)(vii), the assessee is not required to demonstrate that the debt is bad .
As regards the applicability of section 14A, it was submitted that the only income by way of dividend on shares was exempt from tax in respect of securities notified for the purpose of section 10(23G). It was submitted that since the said shares were also capable of generating other income in the form of short term capital gain, income from stock lending, income by way of fees for providing of shares, as collateral etc., and it was not a case wherein the borrowed funds were exclusively utilized for making investment in order to earn the exempt dividend income. It was contended that the premium paid on redemption of premium notes, therefore, could not be considered as expenditure incurred in relation to income which did not form part of total income of the assessee companies so as to attract the provisions of section 14A.
The assessee is solely responsible for executing the contract with the persons to whom he has given forklift vehicles on hire and it was only for fulfilment of this contract that he has also engaged the forklift vehicles from the outside parties. In case of hiring from outside parties the responsibility and the risk involved for performing the contract work lay with the assessee only and no such risk and responsibility seems to have been transferred to outside parties vis-à-vis his principals.
The appellant had raised interest bearing loan from Reliance Capital Ltd. The said Loan had been utilized by the appellant for the purchase of shares and also for making capital contribution to M/s Shreenath Enterprises in which the appellant was a partner. Thus, to the extent the interest bearing loan has been used for making contribution, there is a direct nexus between the loan obtained from Reliance Capital Ltd. and contribution made to the partnership firm.
Boskalis Dredging India P.Ltd, is a company incorporated in India on 5th January,1996. It is engaged in the business of undertaking inter alia capital and maintenance dredging projects and providing technical related services in dredging. However, during the relevant year, the income was earned from hire of personnel, hire of equipment and services rendered to group companies and not from dredging contracts. The assessee had leased dredger Gemini and Multicat Coby to associate enterprise, Boskalis International BV (‘BIBV’) since 1997, under the Standard Bareboat Charter Agreement.
Assessee has challenged the addition of Rs.30,914/- made by the Assessing Officer on account of non-occupancy charges as income from the business not covered under the principles of mutuality. Learned AR submitted that the assessee’s case is covered by the decision of the ITAT Mumbai Bench passed in ITA No.6325/Mum/06 for the assessment year 2003-2004 vide order dated 14-5-2009 in the case of the assessee itself.
The only other issue in this appeal is against the deletion of addition of foreign travel expenses. The facts of this ground are that the assessee incurred foreign travelling expenses to the tune of Rs. 23.50 lakh. The A.O. disallowed a sum of Rs. 3 lakh for the reason that the journeys undertaken were not in connection with the business. The learned CIT(A) deleted the addition by observing that all the places visited by the assessee were in connection with the business. No material has been brought on record to controvert this finding of the learned CIT(A). We, therefore, uphold the impugned order to this extent. This ground is not allowed.
Looking to the nature of professional services rendered to the KPMG USA, it is evident that it does not fall in any of the terms of definition given for Royalty under Article 12 of Indo US DTAA. It was purely a professional service for consultancy which were rendered outside India and nor for supply of scientific, technical, industrial or commercial knowledge or information. Thus, nature of payment do not fall within the meaning of Article 12 and, therefore, there was no liability to deduct TDS and consequently disallowance made under section 40(ia) is uncalled for.
There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, none the less, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test.
The assessee has obtained a term loan from The Mahanagar Co–operative Bank Ltd., Fort Branch. It had also obtained an over draft facility. The bank debited the term loan account periodically with interest due and thereafter credited the term loan account with interest as received by debiting the over draft account in the bank. In effect, the term loan interest was paid by debiting the overdraft account. The Assessing Officer held this to be a conversion of interest liability into a loan or advance and, hence, not liable for deduction under section 43B.
