9911796707
TMI Blog2012 (8) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... s the agreement was entered into before June 1, 1976 the income would not be a Royalty from patent, copy rights or trade mark and like, within the meaning of DTAA but would fall under expression ‘commercial or industrial profit’. In absence of permanent establishment, such income would not be taxable in India for agreement dated March 15, 1969, work was done in Germany and there was no transfer of licence of any existing technical knowhow , thus in view of this the sum claimed to be reimbursement of expenses was held to be not taxable in India - in favour of the assessee - ITA.No. 796/PN/2011 - - - Dated:- 26-6-2012 - Shri Shailendra Kumar Yadav, And Shri G.S.Pannu, JJ. Appellant by : Shri Alok Mishra Respondent by : Shri Nikhil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This assessed loss was inclusive of depreciation of Rs.56,79,821. 2. Later on notice u/s.154 dated 03.05.2007 was issued to amend the said order stating that there was a mistake apparent from record and order u/s.143(3) needs to be amended. In the notice particulars of disallowance were given as under: Disallowance of professional/consultancy expenses of Rs.1,12,23,914/- u/s.40(a)(i)(B) . 3. Subsequently after due verification, out of the above sum of Rs.1,12,23,914/-, following sums were allowed: (a) Rs.33,07,959/- was allowed as deduction as the required TDS was deducted. (b) Rs.37,19,898/- was allowed as these amounts were on account of reimbursement of actual expenses like Travelling, Telephone Expenses, etc., incurred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40(a)(i)(B). 5. In the opinion of the A.O., these mistakes are apparent from record. Hence above two said amounts were disallowed u/s.40(a)(i)(B). Thus, assessed loss u/s.143(3) of Rs.1,35,50,635/- was reduced by Rs.41,96,057/- (Rs.12,62,585 + Rs.29,33,472/-) and finally computed loss as per order u/s.154 came to Rs.93,54,578/-. 6. Being aggrieved by the said order, matter was carried before the First Appellate Authority on behalf of the assessee and CIT(A) having considered the submissions with regard to disallowance of Rs.29,33,472/- granted relief to the assessee by observing as under: The next issue pertains to reimbursement of salary cost in respect of various employees of Dirk European Holdings Ltd. Rs.29,33,472/-. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. The A.O. has passed an order u/s.154 disallowing the expenses by invoking the provisions of section 40(a)(i)(B) on the ground that the assessee did not deduct tax at source. The A.O. erred in making the disallowance without appreciating the fact that the issue involved was debatable and two views were possible on the issue. Accordingly, the order of the A.O. u/s.154 was not justified while the order of the CIT(A) is justified who has granted relief to the assessee as discussed above. 8. After going through the above submissions and material on record, we are not inclined to interfere with the finding of the CIT(A) who has allowed the assessee s claim for reimbursement of the expenses of salary cost of Rs.29,33,472/-. Issue pert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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