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TMI Blog2017 (5) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... n 40 (a) (i) of the Act of the payment of ₹ 9.10 crores in the AY 1998-99 did not arise. Consequently, question (i) framed above is answered in the negative i.e. in favour of the Assessee by holding that the ITAT ought not to have remanded to the AO the issue concerning the tax paid by GEI on the payments made to it by the Assessee. The claim for deduction of ₹ 9.10 crores ought to have been allowed in full to the Assessee in the AY in which was incurred i.e. AY 1998-99. - Decided against revenue. - ITA 280/2017, ITA 281/2017, ITA 281/2017, ITA 283/2017 - - - Dated:- 8-5-2017 - S. MURALIDHAR ANIL KUMAR CHAWLA JJ. Appellant Through: Mr. C.S. Aggarwal, Senior Advocate with Mr. Prakash Kumar, Advocate. Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite a categorical finding by the Commissioner of Income Tax (Appeals) [ CIT(A) ] that while considering the allowability of the claim of deduction of ₹ 9.10 crores on which there was no obligation by the Assessee applicable as per the provisions of Article 26 (3) of the India Japan Double Taxation Avoidance Agreement (DTAA) ? 7. In ITA No. 283 of 2017, the following additional question is framed for consideration: (ii) Whether the ITAT was justified in reversing the order of the CIT (A) as regards disallowance of ₹ 49,53,244 made by the AO in respect of expenditure of ₹ 99,06,488 on commission paid to the subsidiary for services rendered? 8. As regards the first issue as framed above, it is seen that in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer for verification regarding taxes paid by M/s. GE International on the receipts received from the Assessee for the year under consideration, as stated by the learned CIT (A). The Assessing Officer may verify the same and allow the amount in respect of which taxes has been paid by GE International for the year under consideration. 9. Similar findings have been recorded by the ITAT in the separate order dated 30th November 2016 in the Assessee's appeal for AY 1999-2000 as under: 9. In the present case an amount of ₹ 9.10 crores was paid by the assessee's holding company in Japan from, abroad to GE International USA on which tax deduction at source before payment was not made. The payments were not mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inion that justice would be served by setting aside the issue to the assessing officer for verification regarding taxes paid by M/s GE International on the receipts received from the assessee for the year under consideration, as stated by Ld. CIT(A). Ld.AO may verify the same and allow the amount in respect of which taxes has been paid by GE International for the year under consideration. 9.4. Accordingly this ground raised by the assessee stands statistically allowed. 10. Mr. C. S. Aggarwal, learned Senior counsel for the Assessee submits that once the ITAT was satisfied that the decision of this Court in CIT v. Herbalife International Private Limited (supra) answered the question in favour of the Assessee regarding its not havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the very outset, it has to be stated that the AO has incorrectly mentioned only deduction of tax at source and not payment of tax as mentioned in Section 40 (a). After examining the documents produced before me and the return filed by GEI in the office of the DCIT, Special Range-26, Mumbai on 15th April 1999, there is no doubt that GEI disclosed the full income received from Sumitomo Corporation, Japan in the AY 1998-99 and also paid taxes thereupon on gross basis, against challans which are on record and have been verified. The AO was not justified in saying that this was subject to verification. He could have made the verification from GEI if he so desired. Even when the Appellant s submissions were referred to the DDIT, verification, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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