Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: VAT RATES :: ACCOUNTING STANDARDS :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: empanelment :: Central Excise rule to resale the machines to a new company :: due date for vat payment
 
 
From the Courts »
 Income Tax Appellate Tribunal : Kolkata Benches : Kolkata. Sub : Cause List For The Cases Fixed On Friday The 15/12/2017
 Commissioner Of Income Tax, Delhi Vs. Maruti Suzuki India Ltd.
 Sunbeam Auto Private Limited Vs. Pr. Commissioner Of Income Tax
 Sc Johnson Products Private Limited Vs. Additional Commissioner Of Income Tax, Special Range-8, New Delhi
  Amira Pure Foods Pvt. Ltd vs. Pr CIT (ITAT Delhi)
 Stovekraft India vs. CIT (Himachal Pradesh High Court)
 CIT vs. Goodwill Theatres Pvt Ltd (Supreme Court)
 DCIT vs. Ace Multi Axes Systems Ltd (Supreme Court)
 Pr. Commissioner Of Income Tax Vs. B. C. Management Services Pvt. Ltd.
 Commissioner Of Income Tax Vs. M/s International Tractor Ltd.
 Maharaj Garage & Company vs. CIT (Bombay High Court)

CIT vs. Regalia Apparels Pvt. Ltd (Bombay High Court)
March, 15th 2013

Explanation to S. 37(1): No disallowance for compensatory payments

The assessee, a manufacturer of garments, was granted an entitlement by the Apparel Export Promotion Council (APEC) for export of garments and knit wares. In consideration for the export entitlement the assessee furnished a bank guarantee in support of its commitment that it shall abide by the terms and conditions and produce proof of shipment. It was also provided that failure to fulfill the export obligation would render the bank guarantee to being forfeited/encashed. The assessee did not utilize the export entitlement which led APEC to encash the bank guarantee. The assessee recorded the said payment as penalty in its books of account and claimed deduction u/s 37(1). The AO rejected the claim on the ground that as the payment was by way of “penalty” it could not be allowed under the Explanation to s. 37(1). However, the CIT(A) and ITAT allowed the claim. On appeal by the department to the High Court, HELD dismissing the appeal:

The assessee took a business decision not to honour its commitment of fulfilling the export entitlement in view of loss being suffered by it. The genuineness of the claim of expenditure being for business purpose is not disputed. The assessee has not contravened any provision of law and the forfeiture of the bank guarantee is compensatory in nature and does not attract the Explanation to s. 37(1).

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions