9911796707
TMI Blog2015 (9) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... ome warranting deduction of tax at source under Section 194C of the Act. The ITAT also concurred with the view of the CIT (A) that since no element of income was embedded in the reimbursement, the Assessee was not obliged to deduct TDS. The decision entirely appears to be on factual basis. Relevant to AY 2009-10, the other issue concerns the travelling expenses paid to dealers. There was no basis for AO to come to the conclusion that this payment was actually in the nature of commission to the agents. It was noticed that the entitlement to foreign travel was not proportionate to the volume of business conducted through a particular dealer/sub-dealer. Anyone who achieved the actual sale target was entitled to visit the foreign destination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of an agreement executed on 28th December 2006, whereby the annual rent was fixed at ₹ 48,00,000. The rent agreement also provided that the Assessee would pay an interest free security deposit of ₹ 5.35 crores. 3. The AO was of the view that the interest free deposit was far in excess of the normal deposit of security and therefore was an undue favour given to Assessee's sister concern. The AO calculated the excess security deposit at ₹ 5.11 crores, computed the interest thereon @12% and held the interest expenses of ₹ 61,32,000 inadmissible. 4. It was further noted by the AO that the Assessee had failed to include in its tax audit report the details of payment of ₹ 89,60,273 to Kajaria Plus L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 40(a) (ia) of the Act. The AO also disallowed the interest calculated on the excess security deposit made with DEWPL and accordingly made an addition of ₹ 81 lakhs. 7. In both the appeals one common question is common regarding the excess security deposit purportedly made by the Assessee in respect of renting of the premises from DEWPL. The Assessee had taken the premises on monthly rent of ₹ 19 per sq. ft. whereas the market rent was ₹ 60-80 per sq. ft. The area was 21000 sq. ft. As per Clause 2 of the rent agreement the parties had agreed that the rent would be ₹ 4 lakhs per month, whereas the security deposit would keep on increasing. Viewed in this manner, there was no undue advantage to DEWPL. 8. Hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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