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TMI Blog2019 (7) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... nd there is no reference about this agreement in the orders of both the authorities below. Therefore this Tribunal is of the considered opinion that the matter needs to be re-examined. Remanded to AO with directions. Disallowance of marketing services rendered outside India - payment to Dietrich Sikler, Germany - HELD THAT:- This Tribunal is of the considered opinion that to decide the nature of payment, the agreement between the assessee and Dietrich Sikler or atleast the communication between the assessee and Dietrich Sikler has to be examined. No material is available on record with regard to nature of payment - the matter needs to be re-examined by the AO. Accordingly the orders of both the authorities below are set aside and the addition of ₹ 14,58,647/- is remitted back to the file of the AO who shall re-examine the matter afresh in the light of the agreement that may be filed by the assessee. Disallowance of payment for exhibitions held outside India - sum paid to non-residents - HELD THAT:- For the purpose of claiming the expenditure, the assessee has to necessarily produce the details of the recipient and the purpose for which it was paid. Mere vague s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,62,270/- towards incentive scheme for mechanics, coupons for the purchasers, payment to Jullundur Motor Auto, reimbursement of salary and travel expenses of sales representatives, travel expenditure, exhibition and conference expenditure, customer promotion expense, gift and compliments, damages to railway, reimbursement said to be made to Rane Group employees and warranty expenses. Unless the assessee files the details of the expenditure, it may be difficult to decide whether such payment needs deduction of tax at source or not? Therefore the assessee has to file necessary details before the Assessing Officer with regard to the nature of the payment. Accordingly the orders of both the authorities below are set aside and the entire issue is remitted back to the file of the AO. The AO shall reexamine the matter based on the materials that may be filed by the assessee and thereafter decide the issues in accordance with law after giving reasonable opportunity to the assessee. Deduction u/s. 80IB - auditor certificate was not examined - HELD THAT:- In respect of allocation of expenditure, the auditor s certificate is also one of the factor to be considered for the purpose of dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess payment of royalty was adjusted during the year under consideration. The assessee also claims that the tax was deducted at the time of payment. Further there was no material evidence to support the claim of the assessee. Hence this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer. Accordingly both the orders of the lower authorities are set side and disallowance of the royalty to the extent of ₹ 26,74,811/- is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter afresh and bring on record when actually the royalty was paid and thereafter decide the issue afresh in accordance with law after giving reasonable opportunity to the assessee. 3. The next issue arises for consideration is disallowance of payment of ₹ 5,09,656/- to one Mr.James Drutchas, USA. 3.1 Shri R. Vijayaraghavan, the Ld. Counsel for the assessee submitted that it is only a reimbursement of marketing services rendered by the non-resident Mr. James Drutchas in USA. Therefore the fee would not fall within the meaning of fee for technical services under Article 12 of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement is examined, the nature of payment cannot be determined. Having heard the Ld.AR and the Ld.DR, this Tribunal is of the considered opinion that to decide the nature of payment, the agreement between the assessee and Dietrich Sikler or atleast the communication between the assessee and Dietrich Sikler has to be examined. No material is available on record with regard to nature of payment. In view of the above, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer. Accordingly the orders of both the authorities below are set aside and the addition of ₹ 14,58,647/- is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter afresh in the light of the agreement that may be filed by the assessee and thereafter decide the issue in accordance with law after giving reasonable opportunity to the assessee. 5. The next issue arises for consideration is disallowance of ₹ 4,07,371/- paid to non-residents in connection with the exhibitions said to be held outside India. 5.1 Shri R. Vijayaraghavan, the Ld. Counsel for the assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is disallowance of ₹ 1,58,274/- said to be paid to railway consultants. 7.1 Shri R. Vijayaraghavan, the Ld. Counsel for the assessee submitted that the fee paid to railway consultant to the extent of ₹ 1,58,274/- was already subjected to deduction of tax. The tax was also remitted to the Government account. On a query from the Bench, what is the nature of service offered by the railway consultant, the Ld.AR clarified that the assessee is supplying material to the Indian Railways, for getting the payment somebody has to follow up the matter. According to the Ld.AR, the railway consultant assisted the assessee company for collecting the money from the Railways. We heard Shri S. Bharath, the Ld. Departmental Representative also. 7.2 The assessee claims that a sum of ₹ 1,58,274/- was paid to railway consultant and tax was also deducted. Since the assessee claims that tax was already deducted and paid to government account, the Assessing Officer may verify whether tax was deducted and deposited by the assessee as claimed and the nature of services rendered by the railway consultant and thereafter decide the issue afresh in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lary and travel expenses of sales representatives, travel expenditure, exhibition and conference expenditure, customer promotion expense, gift and compliments, damages to railway, reimbursement said to be made to Rane Group employees and warranty expenses. Unless the assessee files the details of the expenditure, it may be difficult to decide whether such payment needs deduction of tax at source or not? Therefore the assessee has to file necessary details before the Assessing Officer with regard to the nature of the payment. Accordingly the orders of both the authorities below are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall reexamine the matter based on the materials that may be filed by the assessee and thereafter decide the issues in accordance with law after giving reasonable opportunity to the assessee. 10. The next issue arises for consideration is deduction U/s.80IB of the Act. 10.1 Shri R. Vijayaraghavan, the Ld.Counsel for the assessee submitted that the Ld.CIT(A) confirmed the order of the Assessing Officer rejecting the claim of deduction U/s.80IB by allowing the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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