Tribunal Decision: Appeal Allowed for 2011-12, Partly for 2012-13

The Tribunal allowed the appeal for Assessment Year 2011-12 and partly allowed the appeal for Assessment Year 2012-13. The disallowances of subscription fees and TDS payments were deleted, and the payments to retiring partners were allowed as deductions. The Tribunal also directed the Assessing Officer to grant the credit for the TDS amounts after due verification.

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Issues Involved:
1. Disallowance of Subscription Fees
2. Disallowance of TDS Payment
3. Disallowance of Payments to Retiring Partners
4. Credit of Tax Deducted at Source (TDS)

Issue-wise Detailed Analysis:

1. Disallowance of Subscription Fees:
The primary issue was the disallowance of subscription fees paid to Deloitte Touche Tohmatsu (DTT). The assessee argued that the fees were necessary for business purposes and had been consistently paid since Assessment Year 2007-08. The Tribunal noted that the issue had been previously settled in favor of the assessee in similar cases, including decisions by the Delhi Bench and the Mumbai Bench of the ITAT. The Tribunal found that the subscription fees were indeed paid for the purpose of business, allowing the assessee to be part of a global network, which facilitated international cooperation and business referrals. The Tribunal directed the Assessing Officer to delete the disallowance for both Assessment Years 2011-12 and 2012-13.

2. Disallowance of TDS Payment:
The second issue was the disallowance of TDS payment amounting to Rs. 44,09,937/-. The assessee contended that the TDS was deducted and paid within the prescribed time, and thus, should be allowed as a deductible expense. The Tribunal agreed with the assessee, noting that under the provisions of Section 198 of the Income Tax Act, the TDS amount is deemed to be received by the recipient of the income. Therefore, the amount of TDS should be considered as paid by the assessee. The Tribunal directed that the TDS amount be allowed as a deduction in Assessment Year 2011-12.

3. Disallowance of Payments to Retiring Partners:
The third issue was the disallowance of payments made to retiring partners, amounting to Rs. 1,66,80,091/-. The assessee argued that these payments were made as per the partnership deed and were not income of the firm but a diversion of income by overriding title. The Tribunal noted that similar issues had been settled in favor of the assessee in various judgments, including those by the ITAT Mumbai Bench and the Hon'ble Bombay High Court. The Tribunal held that the payments to retiring partners were indeed a diversion of income by overriding title and directed the Assessing Officer to delete the disallowance for Assessment Year 2011-12.

4. Credit of Tax Deducted at Source (TDS):
The final issue was the credit of TDS amounting to Rs. 8,67,44,316/- for Assessment Year 2011-12 and Rs. 8,59,85,393/- for Assessment Year 2012-13. The Tribunal directed the Assessing Officer to grant the credit for the entire amount of TDS after due verification and providing the assessee with an opportunity to present its case.

Conclusion:
The Tribunal allowed the appeal for Assessment Year 2011-12 and partly allowed the appeal for Assessment Year 2012-13. The disallowances of subscription fees and TDS payments were deleted, and the payments to retiring partners were allowed as deductions. The Tribunal also directed the Assessing Officer to grant the credit for the TDS amounts after due verification.

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