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EXP ON FOREIGN TRAVEL OF DIRECTORS DISALLOWED AS COMPANY HAD NO BUSINESS IN SUCH LOCATIONS
13 March, 2016   COLORS OF INDIA NEWS AND MEDIA SERVICES






New Delhi 15.01.2016 (RDI): The honorable Bombay High Court in, Advance Power Display Systems Ltd. v. Commissioner of Income-tax-8, held that, where foreign buyer of assessee was situated in Singapore, expenditure incurred for travel to meet buyer in Singapore could only be allowed; and expenses incurred on travel to countries other than Singapore were to be disallowed
Assessee, an export oriented unit, claimed deduction of foreign travel expenditure of its president and directors for purpose of marketing and selling its goods. Assessing Officer found that president and directors of company had not only travelled to Singapore where associated enterprise was situated but also to other countries. He, therefore, disallowed expenses incurred by assessee on travel to countries other than Singapore. Commissioner (Appeals) and Tribunal confirmed order of Assessing Officer. Held, restricting expenses of travel only to Singapore visit where foreign buyer of appellant was situated, could not be said to be perverse.

NO INTEREST ON BELATED REFUND EVEN IF IT WAS WRONGLY CREDITED BY DEPT. TO CONSUMER WELFARE FUND

The CESTAT, Ahmedabad Bench in, Purnima Advertising Agency (P.) Ltd. v. Commissioner of Service Tax, Ahmedabad, held that, if refund is sanctioned on 2-6-2008 by credit to Consumer Welfare fund but, subsequently on order of Tribunal, it is paid to assessee on 10-3-2010, then, interest on belated refunds is payable only upto date of sanction viz. 2-6-2008.
Assessee filed refund claim on 24-1-2005, which was sanctioned on 2-6-2008 but was credited to Consumer Welfare Fund owing to unjust enrichment. Vide order dated 11-12-2009, Tribunal held that unjust enrichment principle was inapplicable. Department granted refund to assessee within 3 months i.e., on 10-3-2010. Assessee demanded interest from 24-4-2005 to 10-3-2010. Department argued that since refund was sanctioned on 2-6-2008, interest was payable only up to 2-6-2008. Held as refund was sanctioned on 2-6-2008, interest would be payable up to date of sanction of refund claim, i.e., up to 2-6-2008. Revenue cannot be held liable to pay interest beyond date of sanction of refund on 2-6-2008. Whatever was due to Welfare Fund was liable to be transferred to assessee and therefore, assessee could be allowed interest up to 2-6-2008 only.

ITAT AFFIRMS SANCTITY OF CA CERTIFICATE; DENIES TO IMPOSE PENALTY FOR TDS DEFAULT RELYING UPON SUCH CERTIFICATE

The ITAT Mumbai Bench 'L' in, ADIT (IT) - 4(1), Mumbai v. Leighton Welspun Contractors (P.) Ltd., held that, where view adopted by assessee based upon certificate of CA that engineering services availed by it were not technical services, was one of possible views, there was reasonable cause as envisaged under section 273B for not deducting tax at source by assessee and, thus, penalty under section 271C was not to be imposed
JDIT passed an order under section 201/201(1A) upon assessee-company, for failure to deduct TDS on foreign remittances/payments towards engineering and draughting services availed from a UK based company. Subsequently, JDIT initiated proceedings under section 271C for levy of penalty. Assessee submitted that there was a CA's certificate, relying upon which it took a view that it was not liable to deduct tax at source and it had furnished list of decided case law in its favour. Held, since obligation of assessee for deduction of TDS on aforesaid payment was highly debatable, and there were decided case-laws for and against assessee and assessee had adopted one of courses permissible in law, there was reasonable cause as envisaged under section 273B for not deducting tax at source by assessee.

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