2015 (10) TMI 921

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....TING & ADMINISTRATIVE EXPENSES OF Rs. 1,34,47,668/-.              On the facts and circumstances of the case and in law, the Honorable Commissioner of Income Tax (Appeals) ("the CIT(A)"), erred in confirming the action of the learned Assistant Commissioner of Income Tax-Range 6(1) ("the learned ACIT") in disallowing the Shared Service Cost under the head Operating & Administrative Expenses of Rs. 1,34,47,668/- as deductible expenditure.           In view of the above, the learned ACIT be directed to delete the whole of the above addition made and accept the claim made by the Appellant in the Return of income." 2. Rival contentio....

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....Since no income was arising out of the transaction between both the companies, therefore, the question of deduction of tax at source does not arise. In support of the proposition, reliance was placed on the decision of Mumbai Bench in the case of Utility Powertech Limited Vs. ACIT, ITA No.2561/Mum/2009, ITO Vs. Dr. William Schwabe India (P) Ltd., 3 SOT 71, ITAT Delhi Bench in the case of ITO Vs. Ons Creations, ITA No.3981/Del/2010 and Circular No.715, dated 8-8-1995. Reliance was also placed on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Seimens Aktiongesells chaft, 310 ITR 320 in support of the proposition that reimbursement of the expenses does not constitute income in the hands of the recipient and, therefore, th....

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....ure amounting to Rs. 14.27 crores on advertisement, business promotion, postage and communication, salaries, bonus and rent. In addition to it, assessee has also debited an expenditure of Rs. 1.34 crores in its P&L account towards "shared service cost" under the head operating and administrative expenses. The AO found that the additional expenditure of Rs. 1.34 crores as unreasonable, insofar as it was paid by assessee to its holding company. The AO also observed that the assessee has not deducted any tax at source on such expenditure. The CIT(A) has confirmed the action of the AO by observing that assessee has not demonstrated as to how the business of the assessee has grown on account of "shared service cost" paid by the assessee. The CIT....