2011 (1) TMI 1468

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.... on 22nd December, 2003 declaring an income of ₹ 6,32,22,470/-. An assessment was passed u/s 143(3) on 30th March, 2006 whereby total income of the assessee has been determined at ₹ 11,53,36,450/-. During the course of assessment proceeding Ld. AO found that assessee had made the provisions in respect of certain foreign payments and claimed them. The details have been noticed by the AO in paragraph No. 7.1 which read as under :- Particulars Amount Remarks Provision for training expenses to Hyatt International Asia-Pacific Ltd. Hongkong ₹ 707294 Paid in F.Y.2003-04 Provision for FBFR Software Maintenance to Information Services Ltd. ₹ 23865 Written back in F.Y. 2003-04 Provision for Cognos Software Maintenan....

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....tion, in respect of payments made to the foreign companies upto and unless it has deducted the tax and paid to the Govt. it cannot claim deduction of such payments. The expenses for which it has made provision and claimed as deduction may be business expenses but if the business expenses are payable to a foreigner then assessee is bound to deduct the tax in order to claim the deduction. Thus assessee has furnished inaccurate particulars and it deserves to be visited with penalty. Ld. DR for buttressing his argument relied upon the decision of Hon'ble Delhi High Court in the case Zoom Communication reported in 191 Taxman 179. 7. Ld. Counsel for the assessee on the other hand relied upon the order of Ld. CIT(A). He submitted that as far as a....