Saturday, 2 June 2012

Fact that payment is used for ‘illegal’ purpose does not attract Expl to s. 37(1)

DCIT vs. Rajrani Exports Pvt Ltd (ITAT Kolkata)


 
The assessee exported tea to Iraq under the ‘Oil for Food Program’, as sanctioned by the United Nations. It paid commission of Rs 1.28 crores to one Alia Transportation, a Jordanian company. The Volcker Committee, which was set up to expose the ‘Oil for Food scam’ found that this company was a front company for the Iraqi regime, meant to receive illegal kickbacks, and did not render any services. The AO, acting on the report, held that the commission paid by the assessee was “illegal” and not allowable under the Explanation to s. 37(1). This was reversed by the CIT (A). On appeal by the department to the Tribunal, HELD:

No comments:

How to Claim Foreign Tax Credit in Australia as a Company

Claiming a foreign tax credit (FTC) in Australia allows companies to offset foreign taxes paid on income earned overseas against their Aust...