2016 (7) TMI 161

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....e by the A.O. on account of prior period expenses, without appreciating the fact that these bills were raised in F.Y. 2009-10 but the services were actually provided in the F.Y. 2008-09 and thus the liability was incurred in A.Y. 2009-1O? 2. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 1,10,300/-, made by the A.O. by treating the Legal and Professional Charges paid to M/s Consort Capital Pvt. Ltd. as Capital Expenditure, without appreciating the fact that the above expenditure was incurred in relation to the raising of private equity and thus was evidently a capital expenditure and claim of the assessee that it was a commission payment will not change the nature of payme....

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.... expenses does not relate to the year under consideration and added back to the total income of the assessee company. 2.1 Secondly, an expenditure of Rs. 1,10,300/- has also been disallowed being capital in nature and added back to the income of the assessee. The Assessee has incurred these expenses on account legal and professional charges paid to M/s Consort Capital Pvt. Ltd. as upfront fees in raising funds through private equity. The AO treated these expenses as capital expenditure and added to the income of the assessee. 2.2 Thirdly the issue in dispute in the present appeal is regarding the disallowance of Rs. 2,16,78,914/- which the assessee has incurred on account of advt. and publicity expenses during the year under consideration....

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....o the assessee for 20.6.2016 and in response to the same, neither the assessee nor its Authorized Representative/Counsel appeared and nor filed any application for adjournment. Keeping in view of the facts and circumstances of the present case, we are of the view that no useful purpose would be served. Therefore, in the interest of justice, we are deciding the issue in dispute exparte assessee, after hearing the Ld. DR and perusing the records. 6. We have heard the Ld. DR and perused and considered the relevant records available with us especially the orders passed by the revenue authorities, we are of the considered view that the Ld. First Appellate Authority has deleted the addition of Rs. 17,66,407/- made by the AO on account of prior p....

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....arges to M/s Consort Capital Private Ltd. The assessee company had consulted M/s Consort Capital Private Limited for raising Private Equity from outsources or sale of shares. The AO had treated the payment of Legal and Professional Charges of Rs. 1,10,300/- to M/s Consort Capital as Expenditure of Capital nature. However, Ld. CIT(A) has held that since the expenditure is in nature of commission paid and cannot be treated as capital expenditure at par with the expenditure incurred during initial capital raised. In the background of the aforesaid discussions, we are of the view that the Ld. CIT(A) has rightly held that the commission paid could not be treated as capital expenditure, hence, we do not find any infirmity in the well reasoned ord....