Tribunal allows appeal, deletes disallowed expenses under RSBY, remits consultancy charges for reassessment.

The Tribunal allowed the appeal of the assessee by deleting the disallowance of enrollment expenses under the RSBY scheme. However, the issue of disallowance of Provision for Consultancy Charges was remitted back to the Assessing Officer for reconsideration based on the documents provided by the assessee.

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Issues:
1. Disallowance of enrollment expenses under RSBY scheme.
2. Disallowance of Provision for Consultancy Charges.

Analysis:

Issue 1: Disallowance of enrollment expenses under RSBY scheme
The assessee, a private limited company offering services as a third-party administrator for insurance companies, filed its return for the assessment year 2010-11. The Assessing Officer disallowed expenses of &8377; 4,40,54,578 under the Rashtriya Swasthya Bima Yojna (RSBY) Scheme and further disallowed professional charges of &8377; 12,83,690. The Commissioner of Income Tax (Appeals) upheld the disallowance of enrollment expenses but reduced the disallowance of professional charges. The assessee contended that the enrollment expenses were not deferred revenue expenditure and should not be amortized over three years. The Tribunal noted that in a previous assessment year, a similar disallowance was made but was later deleted by the Commissioner of Income Tax (Appeals) and upheld by the Tribunal. The Tribunal found no reason to take a different view in the current assessment year and deleted the disallowance of &8377; 4,40,54,578.

Issue 2: Disallowance of Provision for Consultancy Charges
Regarding the disallowance of &8377; 6,91,190 for consultancy charges, the Commissioner of Income Tax (Appeals) confirmed the addition due to lack of substantiating evidence from the assessee. The assessee provided a list of payments made to consultants and a sample copy of an appointment letter during the assessment year. The Tribunal decided to remit this issue back to the Assessing Officer for reconsideration based on the documents furnished by the assessee to substantiate the claim. The Assessing Officer was directed to decide this issue afresh in accordance with the law.

In conclusion, the Tribunal partly allowed the appeal of the assessee, deleting the disallowance of enrollment expenses under the RSBY scheme and remitting the issue of consultancy charges back to the Assessing Officer for reconsideration.

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