2017 (2) TMI 677

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....8/01/2015 and fixed for hearing on 17/08/2016, notice was sent to the assessee/respondent on 22/07/2016 to appear on 17/08/2016. However, none appeared on behalf of the assessee and fresh notice was accordingly issued for 18/10/2016. On 18/10/2016 none appeared on behalf of the assessee and notice through departmental representative was issued for 08/12/2016. On 08/12/2016 again notice by RPAD was issued for 16/01/2017, however, none appeared on behalf of the assessee. From the conduct of the assessee, we are convinced that sufficient opportunity has been given to the respondent/assessee to appear before the Tribunal and present its case. In our considered opinion no fruitful purpose would be served in case fresh notice is issued. From the ....

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....nue expenses whereas the same is enduring in nature and is capital expenditure." 5. Before us, the Ld. DR relying on the assessment order submitted that the Ld. CIT(A) has wrongly deleted the additions made by the AO. The AO has made the disallowances in accordance with the law laid down by the Hon'ble Supreme Court in Brook Bond India Limited (225 ITR 798) therefore, the findings of the Ld. CIT(A) are liable to be set aside. 6. We notice that the Ld. CIT(A) has deleted the additions made by the AO observing as under:- "Ground Nos. 1,2 & 4 regarding recruitment expenses, SOX compliance testing expenses and ISAP awards to the director: These expenses have been primarily disallowed by the A.O on the ground that these expenses are capital ....

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....t of new staff, professional fees for compliance testing and by way of remuneration to employee director via ESOP award. The appellant has not been benefited from these expenditures for very long period, therefore, the same cannot be held as capital expenditure giving rise to benefit of enduring nature. The case law of M/s. Brooke Bond India Ltd. (supra) relied upon by the A.O is not applicable to the facts of this case as the expenses were not incurred in respect of expansion of capital base or creation of assets. Such expenses are routine expenses of revenue nature which deserves to be allowed. The additions on this account are directed to be deleted." 7. The first ground of appeal relates to addition of recruitment expenses to the inco....

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....relates to the professional fees paid to M/s. Mahajan & Aibara, who were appointed to conduct SOX compliance at the service provider site of its group companies. The Ld. DR did not produce any case law to substantiate its contention. Hence, we concur with the Ld. CIT (A) and hold that the expenditure on compliance of provisions of SOX does not fall within ambit of capital expenditure. This ground of appeal is accordingly dismissed. 8. Ground no. 3 of the appeal pertains to International Share Award Plan (ISAP). As per the submissions of the assessee made before the authorities below, the actual amount of ISAP awards expenditure was Rs. 11,26,726 which has inadvertently been mentioned as 28,09,009/-. The expenditure on ISAP awards incurred ....