“1. Whether Ld. CIT(A) erred in law as well as in fact in allowing deduction u/s. 80-IB to the assessee on the income earned from ‘job work’ which comprises of repairs and
maintenance? 2. Whether Ld. CIT(A) erred in law as well as in fact in treating the income from repairing and maintenance at par with the income from manufacturing for the purpose of Sec.80-IB?”
held: The assessee is earning job work charges as well as repairs and maintenance, which are included in job work charges, no doubt it is established that there is commercial connection between profits earned on account of repairs and maintenance and the industrial undertaking but for that source of profit is not directly from industrial undertaking. The business of industrial undertaking had directly to yield that profit to claim deduction u/s. 80-IB of the Act. Hence, our answer to first question referred is that the assessee is entitled for deduction u/s. 80-IB on income earned from job work charges but excluding repairs and maintenance charges. Our answer to second question referred is that the income from repair and maintenance cannot be treated at par with the income from manufacturing for the purposes of deduction u/s. 80-IB of
VIZAG BENCH ITAT on Partnership firm (retirement) K. Koteswara Rao In the light of above proposition of law, if the facts of the case are examined, we would find even on merit, the amount received by the assessee is on account of relinquishment of his share in goodwill acquired by the educational institution over a period of time. Therefore, the amount received by the assessees towards goodwill is not chargeable to tax. Moreover, there is no specific assertion in the MOU or anywhere else that this amount was given towards the non-competition fees. Therefore, we are of the view that assessing officer has taken a one of the plausible view for which the assessment order cannot be revised by the CIT after treating it to be erroneous and prejudicial to the interest of the revenue. We therefore, set aside the order of the CIT referred: In the case of ITO Vs. Amitabh Singh 16 SOT 453, the Tribunal has held that the amount credited to the capital account of the assessee partner on account of goodwill and received by him on his retirement from the firm is
not taxable as capital gains as the goodwill was acquired by the firm over a period of time and all along it continued to belong to the firm and there was no transfer of any goodwill by the assessee to the firm.;In the case of CIT Vs. L. Lingmallu Raghukumar 247 ITR 801, their
Lordship of the apex court have held that on retirement of assessee partner from the firm there was no element of transfer of interest in partnership asset by the retiring partner to the continuing partners and amount received by him was not assessable to capital gains.
HELD:Therefore, the amount received by the assessee is on account of relinquishment of his share in goodwill acquired by the educational institutions over a period of time in favour of surviving partners and as such the same is not chargeable to tax
Delhi Bench ITAT Shri Hardarshan Singh, Delhi bench ITAT 40(a)(ia) TDS Dis allowance : Freight /transport cases (194C)
He is also entering into arrangements for transportation of goods through vehicles of other transport companies. The dispute relates to the latter business. The case of the assessee had been that in this business, he is not carrying on the work of transportation of goods and, therefore, the provision contained in section 194 C is not applicable to him. However, the finding of the AO is that the assessee has been carrying on this business also in respect of which he is liable to deduct tax at source from the payments made to other transporters. He has not deducted the tax at source on payment made to such transporters. Therefore, the expenditure incurred in this behalf is liable to be disallowed under the provision contained in section 40(ia). In order to illustrate his point , he directed the assessee to file a revised profit and loss account including the receipts and expenditure from this business in the profit and loss account. Such an
account was furnished, which shows that the income from lorry booking amounting to Rs. 8,51,43,744/- and booking commission of Rs. 26,02,032/-.
Coming to the merits of the case, it is submitted that the assessee owns and operate four trucks for transportation of goods. These trucks are not adequate in number to meet the market requirement. Therefore, he arranges trucks of other transport companies for carriage of goods for which he receives commission from them. This commission income is credited to profit and loss account. In respect of this income, the assessee does not undertake the business of carriage of goods and no work is performed by him. The bills are prepared in a manner that net
commission income becomes payable by the actual transporter to the assessee. To support this contention, reliance has been placed on bills prepared and accounted for in the books It is also submitted that the only activity carried on by the assessee was to act as an intermediary between the customer and Delhi Assam Roadways Corporation Ltd., for which he received
commission of Rs. 2,100/-. No other work has been done by the assessee except bringing the two parties together. He did not make any payment to the aforesaid roadways corporation for transportation of goods. Such payment was made by the customer. Thus, there was no liability on assessee for deduction of tax at source
HELD:According to us, it cannot be said that assessee really entered into the contract of transportation of goods. He merely acted as an intermediary. Thus, the facts seem to be similar to the facts in the case of Grewal Brothers (supra) although the provisions of Partnership Act make the position of law some what messy. In the case of Cargo Linkers, the assessee acted as an intermediary between the exports and the airlines. It received the amount from the exporter and handed over the same to the airline, who paid commission. These facts are also nearer to the facts of the case at hand. Accordingly, following this decision, it is held that the assessee was not liable to deduct tax at source. In view thereof, no addition could have been made u/s 40(ia). Thus, ground no. 1 is allowed.