CIT v. Sulzon Energy Ltd. - Taxpublishers.in

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The Tax Publishers2013 TaxPub(DT) 1630 (Guj-HC) : (2013) 354 ITR 0630 : (2013) 093 DTR 0050 Income Tax Act, 1961 --Business expenditure Allowability Sales commission--Assessee had paid certain amount towards sales commission. Assessing officer however, made addition of the said amount primarily on the ground that the assessee failed to establish the actual services rendered by the commission agents. He was of the opinion that the question was whether the amount claimed as expenditure was laid down wholly and exclusively for the purpose of business and mere existence of the agreements between the assessee and its sales agents or payment of the amount as commission would not establish that such payment was made exclusively and wholly for the purpose of enhancing assessee's business. *Held :* Was not justified at both the Commissioner as well as the Tribunal concurrently held that there was sufficient evidence on record of the assessee having paid commission to the agents who had rendered service as per the agreements. Such payments were made through cheques and were found to be genuine. Commission agents in no way related to the assessee-company and the payments were duly reflected in their income-tax returns. Income Tax Act, 1961 Section 37(1) Income Tax Act, 1961 --Deduction under section 80IBComputation Interest received from trade debtess towards late payment --assessing officer made disallowances of deduction under section 80IB in respect of interest-income on late recovery of sale proceeds from the debtors. *Held :* Was not justified as the issue was covered in the case Nirma Industries Ltd. v. Dy. CIT (2006) 283 ITR 402 (Guj). where in it was held that interest received from trade debtors towards late payment of sales consideration was not required to be excluded from the profits of the industrial undertaking as the same could not be stated to have been derived from the business of the industrial undertaking. Hence, following the some, assessee was entitled to deduction under section 80IB. Income Tax Act, 1961 Section 80IB In the Gujarat High Court Akil Kureshi & Sonia Gokani, J.J. CIT v. Suzlon Energy Ltd. Tax Appeal No. 223 of 2013 3 April, 2013 In favour of assessee. Appellant by : Paurami B. Sheth SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1630 (Guj-HC) : (2013) 354 ITR 0630 : (2013) 093 DTR 0050

Income Tax Act, 1961

--Business expenditure Allowability Sales commission--Assessee had paid certain amount towards sales commission. Assessing officer however, made addition of the said amount primarily on the ground that the assessee failed to establish the actual services rendered by the commission agents. He was of the opinion that the question was whether the amount claimed as expenditure was laid down wholly and exclusively for the purpose of business and mere existence of the agreements between the assessee and its sales agents or payment of the amount as commission would not establish that such payment was made exclusively and wholly for the purpose of enhancing assessee's business. Held : Was not justified at both the Commissioner as well as the Tribunal concurrently held that there was sufficient evidence on record of the assessee having paid commission to the agents who had rendered service as per the agreements. Such payments were made through cheques and were found to be genuine. Commission agents in no way related to the assessee-company and the payments were duly reflected in their income-tax returns.

Income Tax Act, 1961 Section 37(1)

Income Tax Act, 1961

--Deduction under section 80IBComputation Interest received from trade debtess towards late payment --assessing officer made disallowances of deduction under section 80IB in respect of interest-income on late recovery of sale proceeds from the debtors. Held : Was not justified as the issue was covered in the case Nirma Industries Ltd. v. Dy. CIT (2006) 283 ITR 402 (Guj). where in it was held that interest received from trade debtors towards late payment of sales consideration was not required to be excluded from the profits of the industrial undertaking as the same could not be stated to have been derived from the business of the industrial undertaking. Hence, following the some, assessee was entitled to deduction under section 80IB.

Income Tax Act, 1961 Section 80IB

In the Gujarat High Court

Akil Kureshi & Sonia Gokani, J.J.

CIT v. Suzlon Energy Ltd.

Tax Appeal No. 223 of 2013

3 April, 2013

In favour of assessee.

Appellant by : Paurami B. Sheth