TaxTMI 
TaxTMI 
2017 (8) TMI 943
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....banking channels from Mr. Patrick Brian Joseph Curran (an UK citizen) and Mr. Gregory Douglas Strohfeldt (an Australian citizen) against fresh allotment of preference shares and both the persons have also confirmed the factum of investment in the appellant company, as such, addition made by the learned Assessing Officer and sustained by the learned Commissioner of Income Tax (Appeals) is unsustainable in law. 2.1 That the learned Commissioner of Income Tax (Appeals) and Assessing officer has grossly erred in failing to appreciate that assessee had obtained necessary approval from the Reserve Bank of India for making investment in the appellant company by Mr. Patrick Brian Joseph Curran and Mr. Gregory Douglas Strohfeldt and assessee has also duly intimated to the Registrar of Companies in respect of subscription of shares of the appellant company, as such, addition made and sustained is wholly unwarranted in law. 2.2 That the learned Commissioner of Income Tax (Appeals) and Assessing officer has grossly erred in failing to appreciate that Mr. Patrick Brian Joseph Curran and Mr. Gregory Douglas Strohfeldt both are technocrats and well versed in the line of business of the appe....
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....e 46A of the Income Tax Rules failing to appreciate that no proper, valid and meaningful opportunity was granted to the appellant during the course of the assessment proceedings. 4. That the learned Commissioner of Income Tax (Appeals) has grossly erred on facts and in law in upholding the disallowance of expenditure of Rs. 89,114/- out of total rent expenditure of Rs. 27,89,114/- incurred during the year on the ground that the same was excessive, having regard to the amount of rent agreed in the rent agreement, without correctly appreciating the details of the total rent expenditure claimed as deduction during the relevant previous year. 5. That the learned Commissioner of Income Tax (Appeals) has erred on facts and in law in upholding the addition of Rs. 4,40,050/- to the total income on the ground that the appellant did not fully disclose rental income qua some portion of the leasehold property given on rent to sister concerns, viz., Magnum technology Solution Pvt. Ltd. and Bell Securitech Pvt. Ltd. on the basis of the total rent agreed in the rent agreement entered with the said two parties. 6. That the learned Commissioner of Income Tax (Appeals) has erred on facts an....
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....horized share capital of the assessee company is of Rs. 6,00,00,000/- (see Pg. 28) The assessee company had issued equity shares till the end of the preceding assessment year of the value of Rs. 85,47,000/-. Such equity shares were subscribed by the ten shareholders named below: SI. No. Name of the shareholder Number of shares Amount 1. Anurag Ashok 8,06,000issued Rs. 80,60,000/- 2. Kavita Ashok 5,000 Rs. 50,000/- 3. Alok Singh 3,700 Rs. 37,000/- 4. Avinash Dixit 5,000 Rs. 50,000/- 5. Kul Taran Singh 5,000 Rs. 50,000/- 6. Rishabh Kumar 5,000 Rs. 50,000/- 7. Nitin Kumar 5,000 Rs. 50,000/- 8. Shriniwas Sharma 2,500 Rs. 25,000/- 9. Parmeet Chawla 2,500 Rs. 25,000/- 10. Sanjeev Mathur 15,000 Rs. 1,50,000/- Equity shares thus allotted were 8,54,700 of Rs. 10/- each. During the instant year it further allotted preference shares out of authorized share capital of Rs. 4,16,90,600/-. The said share capital had been contributed by the following shareholders: Sl. No Name of the shareholder No of shares held Date of allotment Amount [Rs.] 1. Patrick Brian Joseph 2,97,071 27.11.2011 2,97,07,077 2. Gregory Douglas Strohef....
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....ugh had been incorporated on 4th February 2004, yet, till the close of the accounting year relevant for the instant assessment year, it had been incurring losses and such loss so suffered has duly been accepted, but soon the aforesaid two directors were taken as Board of directors and had contributed capital who were allotted preference shares, the appellant company started making profit. In fact the expenditure incurred on their travelling and stay has been allowed by the CIT(A) (Details pg. 8 - 92, para 7 of CIT(A)'s order). 6. The brief facts and sequence of events in respect of the aforesaid appeal are as under: 23.9.2012: For the year under consideration, the appellant company has filed its return of income declaring a loss of Rs. 51,34,798/-. A copy of the return of income alongwith computation of income and audited financial statement has been placed at pages 1-32 of the PB. A statement of profit and loss account is at page 27 of the PB whereas the balance sheet is at page 27 of the PB. The profit and loss reflects a net loss of Rs. 27,51,235. 10.10.2014: That toscrutinizethe aforesaid return of income, a notice u/s 143(2) and 142(1) of the Act was issued to the appellant....
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....6.04.2010 to 05.04.2011 290-325 2. Copy of the confirmation from UBS wealth management showing source of funds being extension of bank overdraft. 326-328 B Mr. Gregory Douglas (Tax Resident of Australia): 1. Copy of the income tax return filed in the course country i.e. Australia alongwith computation of income for the 01.07.2008 to 30.06.2009 which had electronically been filed. 329-341 4. Copy of the financial statements of Fiwian Superannuation Fund alongwith tax return for the years ended 30.06.2011 and 30.06.2012 342-401 5. Copy of the write up from financial advisor of Gregory Stofhfeldt about withdrawal of funds from superannuation fund. .402-408 6. Copy of statement showing movement of funds and withdrawals thereto during the relevant period relevant period. RBI Approvals: 409-413 7. Copy of FCGPR dated 12.02.2016 issued by RBI for acceptance of remittances from Mr. Douglas 414-415 8. Copy of FCGPR dtd 16.06.2015.2016 issued by for acceptance of remittances from Mr. Curran and Mr.Douglas. RBI 416418 10.10.2016: That the AO furnished his remand report wherein AO objected the admission of the additional evidence on t....
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....rder of assessment (see page 440-480 of the PB). 14.03.2017:That the learned CIT(A) disposed off the appeal of the appellant wherein learned CIT(A) did not admit the additional evidences which was merely supporting evidences and substantially upheld the addition made in the order of assessment. Aggrieved against the aforesaid order of assessment, assessee has filed the instant appeal. 7. We have heard the rival contentions and perused the facts of the case. The issues involved in the instant appeal are as under: 1. S.Noappellant company w.e.f. 01.04.2012. Particulars Amount (in Gr ound 1. Addition u/s 68 of the Act in respect of amount received from Rs.4,16,18, 889 2-2 .6 2. Rejection of the prayer of admission17 on-resident inv st rs towards of allotment of preference shares, additional evidences which evidences were filed which shareshol ers also became u/s 46 A of the Income Tax Rules. directors of the 3 3. Disallowance of expenditure on ren t Rs. 89,114 4 holding the same to be excessive. 4 Addition of notional amount on the ground of non-disclosure of correc rental income. Rs.....
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.... z. Mr Patrick Brian Joseph Curran 52 53 54 USD 79,250 USD USD 35,68,627 2.01.88.35 59,50,100 2,97,07 27.01.20 Total 2,97,07,07 10. The aforesaid sum has been received by the assessee from the respective bank accounts of the aforesaid individuals and has duly been credited in the bank account of the appellant company. That after the receipt of the aforesaid sums, appellant company has also allotted the cumulative preference shares to such shareholders. It is submitted that after the shares were allotted to such persons, both Mr. Gregory Douglas Strohfeldt and Mr. Patrick Brian Joseph Curran was appointed as director of the appellant company w.e.f. 01.04.2012. During the course of the assessment, appellant vide its reply dated 09.01.2015 (placed at page 39-40 of PB) duly provided the details of the cumulative preference shares issued during the year. Alongwith the aforesaid reply, appellant filed the bank remittance certificates for the sums received by the appellant company. The assessee had thus discharged its initial onus of establishing that the amounts credited in its books represented share capital, which indeed has not ....
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....bted' the source of the credits in his bank account and in respect of Mr. Patrick Brian Joseph, it was stated that sum has been received by appellant from his bank account, and at the time of remittance he has debit balance as such, his source is also doubted. It is submitted that during the course of the appellate proceedings, appellant filed an application u/s Rule 46A of the Income Tax Rules, and alongwith the application, appellant filed the Tax Returns of both the individuals. That from the perusal of the aforesaid return of income, it would be seen that for the period 06.04.2011 to 05.04.2012, Mr. Curran has shown an income of 1,52,289/- (placed at page 287-289 of PB) and Mr. Gregory stofeldt of AUD 80,217/- which clearly show that such persons are man of means and have sufficient creditworthiness for making investment in the appellant company. In respect of Mr. Patrick Brian Joseph, appellant also filed the confirmation from the bank (placed at page 326-328 of PB) showing that overdraft facility has been granted to him against the investment held by bank and he has used only 30% of the overdraft facility, which clearly indicates that investments are far greater than the over....
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....so confirmed the factum of investment in the appellant company in such circumstances, and the burden of the appellant has duly been discharged. It may be stated here that, in the instant case, the assessee has led complete evidence, to establish that, the shareholders were identifiable and, genuine, which is the only test which has to be applied in the case where an examination pertains to an addition in respect of credits appearing as share application money, as has been held by Full Bench in the case of Sophia Finance reported in 205 ITR 98 (FB) and, CIT vs. Divine Leasing & Finance Ltd. reported in 299 ITR 268 at page 275. In the aforesaid case of Sophia Finance reported in 205 ITR 9S (FB), their lordships of Full Bench at page 104 has held as under: "If the amount credited is a capital receipt then it cannot be taxed but it is for the ITO to be satisfied that the true nature of the receipt is that of capital. Merely because the company chooses to show the receipt of the money as capital does not preclude the ITO from going into the question whether this is actually so. Section 68 would clearly empower him to do so. Where, therefore, the assessee represents that it has issued ....
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....ind that the substantial questions framed in these appeals do not arise for our consideration. Accordingly, all these appeals are dismissed with no order as to costs." [Emphasis supplied]. 17. Similar view has also been expressed in the following judicial pronouncements: i.350 ITR 220(All) CIT vs. Jay Dee Securities and Finance Ltd. ii. 350 ITR 222 (AH) CIT vs. Misra Preservers (P) Ltd. III.361 ITR 220(Del) CIT vs. Kamdhenu Steel and Alloys Ltd. iv. 320 ITR 619 Bhav Shakti Steel Mines (P) Ltd. vs. CIT v. ITA No. 1497/2010,1518/2010 (Del) CIT vs. Derby Overseas (P) Ltd. vi. ITA No. 904/2010 (Del) CIT vs. Dhawan Jewellers (P) Ltd. vii. 329 ITR 110 (Del) Sarthak Securities Co. P. Ltd. vs. ITO viii. 361 ITR 195 (Del) CIT vs. Nipuan Auto (P) Ltd 18. It was further submitted by the ld. counsel for the assessee that the High Court of Delhi in the case of CIT v Divine Leasing and Finance Ltd reported in 299 ITR 268 (Del), has held that where the transaction is through banking channels, the genuineness of the transaction is duly established. In the case of Add!. CIT v. Bahri Bros. (P.) Ltd. reported in [1985] 154 ITR 244 (Pat.) it has been held that the very fact that all....
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....rom the coffers of the assessee company. The findings of the High Court are as under: "8. There is a finding of fact given by the two authorities namely CIT(A) and the Tribunal to the effect that:- The confirmation of M/s. ACL has been filed by the Assessee. The said company was assessed to tax. The source of ACL had been explained as out of transfer of funds from the accounts of M/s. BTL. Thus, the Assessee discharged its burden of proving identity, capacity and genuineness of the transaction. The Assessing Officer has not brought any material to show that the funds to ACL were provided by the Assessee. Under the circumstances, it cannot be said that the cash credit in question has remained unexplained. There is absolutely no material to link the Assessee with the sum of Rs. 22,97,000/- deposited in cash in the bank account of M/s. FBSL. 9. In view of the concurrent findings of the fact given by the two authorities that there is no material to link the Assessee with a sum of Rs. 22,97,000/- deposited in cash in the bank account of M/s. FBSL, as such, no case is made out for making addition under Section 68 of the Act, since there was no material with the Assessing Of....
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....Ltd. xiv) 51 taxmann.com 198 (Mad) CIT vs. Pranav Foundation Ltd. xv) 50 taxmann.com 416 (Mad) Victory Spinning Mills Ltd. xvi) ITA NO. 2082/D/2011 dated 8.12.2014 A.Y. 2007-08 ACIT vs. Divine (India) Infrastructure Ltd. xvii) ITA NO. 1644/D/2012 dated 28.11.2014 A.Y. 2003-04 ACIT vs. Gulshan Polyols Ltd. xviii) ITA No. 4122/D/2009 dated 22.10.2014 A.Y. 2001-02 ITO vs. N.C. Cables Ltd xix) ITA No. 2821/D/2011 dated 16.10.2014 ITO vs. Rakam Money Matters (P) Ltd. xx) ITA No. 645/2012 dated 13.1.2015 Funnay Time Finvest Ltd 22. Reliance is also placed on the order of the Tribunal in the case of ITO vs. Shri. Kailash Chand Bansal reported in 1 SOT 485, wherein the assessee had received gifts out of donor's NRE account with Hongkong and Shenghai Bank and another gift out of his NRE account with the Indian Bank. That AO made the addition which was deleted by the CIT(A). In the appeal filed before the Hon'ble Tribunal, it was held as under: "5. After hearing both the parties, we do not find merit in the appeal of the revenue. Undoubtedly, the initial burden is upon the assessee to prove the identity and capacity of the cash creditor and the genuineness of the transaction....
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.... in a latest judgment, pronounced on 21.12.2015, Hon'ble High Court of Delhi in the case of CIT vs. M/s Shiv Dooli Pearls & Investment Ltd. reported in [2016] 237 Taxman 104 (Delhi), has held as under: "12. The Court has examined the decision of the Gauhati High Court in Nemi Chand Kothari (supra). Therein the Gauhati High Court referred to Section 68 of the Act and observed that the onus of the Assessee "to tire extent of his proving the source whom which he has received the cash credit." The High Court held that the AO had ample 'freedom' to make inquiry "not only into the source(s) of I the creditor, but also of his (creditor's) sub-creditors and prove, as a result, of such inquiry, that the money received by the Assessee, in the form of loan from the creditor, though routed through the sub-creditors, actually belongs to, or was of, the assessee himself." Thereafter, the High Court, on a harmonious construction of Section 106 of the Evidence Act and Section 68 of the Act. held as under: "What, thus, transpires from the above discussion is that while Section 106 of the Evidence Act limits the onus of the Assessee to the extent of his proving the source from which he has ....
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....ge of the Assessee." (emphasis supplied) The above observations, far from supporting the case of the Revenue, does the opposite. In the subsequent decision of this Court in Mod. Creations Pvt. Ltd. v. Income Tax Officer (2013) 354 ITR 282 (Del), the position was clarified by the Court and it was held: "It will have to be kept in mind that Section 68 of the I.T. Act only sets up a presumption against the Assessee whenever unexplained credits are found in the books of accounts of the Assessee. It cannot but be gainsaid that the presumption is rebuttable. In refuting the presumption raised, the initial burden is on the Assessee. This burden, which is placed on the Assessee, shifts as soon as the Assessee establishes the authenticity of transactions as executed between the Assessee and its creditors. It is n part of the Assessee's burden to prove either the genuineness of the transactions executed between the creditors and the sub-creditors nor is it the burden of the Assessee to prove the credit worthiness of the subcreditors." 14. In Mod. Creations Pvt. Ltd. (supra) this Court negatived the case of the Revenue that the onus was on the Assessee to prove the source of the sub....
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....prove the genuineness and credit worthiness of the subcreditor, which is in this case was TCL. [emphasis supplied]" 24. That in the case of CIT vs. Daulat Ram Rawatmull reported in 87 ITR 349 at page 359, Hon'ble Apex Court has held as under: "The explanation furnished about the source of Rs. 4,50,000 in fixed deposit in the name of Biswanath was that he had kept an amount of Rs. 4,50,000 with M/s. Soorajmal Nagarmal and Rs. 50,000 in deposit with Comilla Bank. The amount of Rs. 4,50,000 was stated to have been withdrawn by Biswanath from M/s. Soorajmal Nagarmal in January, 1941, while the other amount of Rs. 50.000 was withdrawn from Comilla Bank in March, 1942. The amount of Rs. 5,00,000 was then transferred by Biswanath to his native place, Ratangarh (Desh) in Rajasthan due to bombing panic in Calcutta. When war situation improved, the money was taken from Desh to Jamnagar for deposit. This explanation was found to be false in view of the admitted position that the amount of Rs. 5,00,000 in fixed deposit in the name of Biswanath in Jamnagar bank had been tendered at Burrabazar Calcutta branch of the Central Bank on November 15, 1944, and thereafter was transferred through Bo....
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.... ii. [2015] 57 taxmann.com 176 (Gujarat) Sint. Neelamben Gopaldas Agrawal v. TTO iii. [19971 224 ITR 180 (P&H) CIT vs. Ram Narain Goel iv. [2014] 366 ITR 217 (Rajasthan) CIT v. Jai Kumar Bakliwal v. [2013] 214 Taxman 440 (Allahabad) Zafa Ahmad & Co. v. CIT vi. 103 ITR 344 at 349-350 ( Patna) Saraogi Credit Corporation v CIT vii. 59 ITR 632 at 636 (Assam) TolaRam Daga v cIT viii. 49 ITR 273 at 279 (Mad) S. Hastimal v CIT ix. 151 ITR 150 at 156-157 (Pat) Addl. CIT, Bihar v Hanuman Aggarwal x. 154 ITR 244 at 247 (Pat) Addl CIT v Bahri Bros. (P) Lt xi. 264 ITR 254 at 261-266 (Gau) Nemichand Kothari v. CIT xii. 280 ITR 512 at 518 (Guj) Murlidhar Lahorimal Vs. CIT xiii. [2008] 219 CTR (Raj.) 571 at 577 Labh Chand Bohra v. ITO xiv. 256 ITR 360 at 369 (Guj) DCIT Vs Rohini Builders 27. The appellant before concluding with the submissions that the AO/CIT(A) while framing the assessment has grossly erred m including in the total income of the appellant, the contributions made by the shareholders as revenue has failed to appreciate the provisions of section 69 of the Act and has misapplied the provisions of section 68 of the Act. Reliance is placed on the judgment of ....
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.... The appellant company, during the relevant year, had debited an amount of Rs. 27,89,114 to the profit and loss account as 'Rentals', disclosed in Note 20 (placed at page 31 of PB) to the audited financial statements under the head 'Other Expenses'. The break-up of the aforesaid expenses is as under: S. No Monthlv Rental Annual pavment 1 Monthly rental charges of Rs. 2,13,500 Rs. 25,62,000 2. Monthly rental charges paid to Mr. Rs. 1,21,330 3. Amount paid against settlement of rental Rs. 65,972 4. Rent paid for coffee machine at rented Rs. 9,000 5. Rent paid in respect of UIDAI project Rs. 18,454 6. Service tax component added to cost Rs. 12,358 Total Rs. 27,89,114 32. However, the AO made a disallowance of a sum of Rs. 88,114/- on the ground that under the rent agreement with Cepco Industries Private Limited and total rent expenditure incurred during the year aggregated to Rs. 27.00 lacs Rs. 2,25,000/- per month for a period of 12 months whereas appellant has debited a sum of Rs. 27,89,114/- as such it was held by him that a sum of Rs. 89,114/- is the excess rent (see para 5c of the order of the AO). It 4s submitted that during the course of the as....
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.... No. 5, addition of notional amount on the ground of nondisclosure of correct rental income: The appellant company had. during the relevant year, earned a rental income of Rs. 13,59,950 from sub-letting of leased premises at Kalkaji to its two sister concerns, viz. Magnum Technology Solutions Pvt Ltd and Bell Securitech Pvt. Ltd vide sub-rent agreement(s) dated 01.08.2009 (placed at page 105-108 of PB). In accordance with the abovementioned sub lease agreements, the appellant company was entitled to receive a monthly rental of Rs. 1,50,000 from Magnum Technology Pvt. Ltd and a monthly rental of Rs. 50,000 from Bell Securitas Pvt. Ltd. It is however submitted that the rental agreement with Magnum Technology Solution Pvt. Ltd was terminated after November, 2011 i.e. during the year, lease continued only for a period of 8 months, viz. from April to November, 2011, and thus the appellant had only received rental income from Magnum for a period of 8 months and not the entire year which had duly been shown. It is submitted that unless an income accrues, no income can be brought to tax. Thus in the absence of accrual of an income, the learned Authorities had committed gross error of law t....
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....ated Multi Modal Transit System ("DIMTS") Ltd. had awarded a contract for designing, development, operations, installation, maintenance and management of driving licenses issue system (hereinafter referred to as 'DL Project'), vide agreement dated 27.8.2008 to Kaizan Engineering System Pvt. Ltd. ("Kaizan"). The said DL Project was operational with 13 Zonal Transport Authorities in Delhi. For the purpose of the said Project, Kaizan had provided all necessary infrastructure including operational, supervisory, maintenance, manpower and inventory of smart cards, print media and stationery, etc. 38. During the relevant previous year, the assessee pursuant to MOU dated 24.05.2011 (placed at pages 143-156 of the PB), acquired the aforesaid business of Kaizan, along with all the related assets and liabilities; lock stock and barrel, from Kaizan at a total lumpsum consideration of Rs. 1.70 crores. The book value of assets forming part of the aforesaid business in the hands of Kaizan aggregated to Rs. 70,27,217, which was incorporated as such in the books of the assessee company, post acquisition of business. The difference between the total agreed lumpsum consideration of Rs. 1.70 crores a....
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.... less intangible assets, to be regarded as royalty within the meaning of section 9(l)(vi) of the Act. Reference in this regard can be made to the following decisions, wherein it has been held that the price paid for acquisition of ownership in any intangible assets is not covered within the meaning of royalty us 9(l)(vi) of the Act: Reliance, in this regard, is placed on the recent decision of Delhi High Court in the case of Asia Satellite Telecommunications Co. Ltd. vs DIT: 332 ITR 340. where, while succinctly explaining the provisions of aforesaid Explanation to section 9(1) (vi) of the Act, the High Court held that consideration paid towards outright purchase of asset, as opposed to acquiring a right to use such asset, does not fall within the meaning of 'royalty' under the aforesaid section: 55. Keeping in view the aforesaid principles, we now embark upon the interpretative process in defining the ambit and scope of term 'royalty' appearing in Explanation 2 to sub-clause (vi) of Section 9(1) of the Act. Sub-clause (i) deals with the transfer of all or any rights (including the granting of a licence) in respect of a patent, etc. Thus, what this sub-claus....
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....e intention of the parties, when they provided for visits of the personnel of the Thailand company to India, seems to be only to ensure that the drawings and designs are properly understood and put to use by the assessee in connection with the SVBT. In Pro-Quip Corporation vs. CIT (255 ITR 354), the Authority for Advance Ruling (AAR) brought out the distinction between a sale of property and the transfer of the right to use the property in the following words : "There is a well-known distinction between the out and out sale of properly and allowing use of the property or technical knowhow. In the former case property, which may include person's business transferred unconditionally, becomes property of the purchaser. In the latter case the purchaser only gets the right to use the property. The payment in the latter case may be treated as licensing fee or royalty but the payment in the first category of cases cannot be treated as royalty..." Similarly, in CIT vs. Davy Ashmore India Limited (1990) (190 ITR 626), the Calcutta High Court held (at page 635) that the import of designs and drawings postulates an out and out transfer or sale of such designs and drawings and the ....
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.... of any copyright of literary, artistic or scientific work including cinematograph films, phonographic records, films or tapes or any patent, trade mark, design or model, plan, secret formula or process or for the use or right to use any industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience. The CTT(A) has stressed on the words "model" or "design". It must be noticed that there are a number of words used both in the section and in the treaty. All the words signify a form or kind of intellectual property. The words 'model' or design' have to be understood in the context. When these two words are surrounded by words meaning or referring to intellectual property rights, it may not be proper, having regard to the well-settled rules of interpretation, to hold that these two words will have to be understood in a different sense. ........If this principle of interpretation is applied to clasue (i) of Explanation 2 to section 9(1)((vi) of the Act, it seems to us that the words such as, patent, invention, secret formula or process or trade-mark, which are all species of intellectual property, as rightly contended by t....
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....acquired from Kaizan was compendiously capitalized under the head "intangible assets" in the books of account and was not an amount separately paid for acquisition of any intangible assets, much less to be regarded as a payment made for gf taming a right to use such assetsIn view of the above, it is submitted that since the aforesaid payment did not fall within the meaning of royalty u/'s 9(1) (vi), the same was not subject to TDS u s 194J and, therefore, there was no default on the part of assessee in deducting tax at source under the said section." 40. It was submitted that despite the aforesaid submission learned CIT(A) in a wholly arbitrary manner uphold the addition by holding that payment made by the appellant is for technical services as defined under Explanation 9(1 )(vii) of the Act. It is submitted that payment made by the appellant cannot be termed as fee for technical services as per Explanation 2 of section 9(1 )(vii) of the Act. For the sake of convenience, aforesaid provision is extracted hereinbelow: "Explanation [2], For the purposes of this clause, "fees for technical services" means any consideration (including any lump sum consideration) for the rendering....
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....to be deleted. 43. As regards Ground No. 7 being disallowance of stamp duty charges paid at the time of registration of rent agreement, the appellant had, during the year, paid stamp duty charges amounting to Rs. for execution of various rental agreements. As discussed in detail supra, the appellant had leased office premises at Kalkaji and Patparganj and sub-let part thereof to sister concerns. That learned disallowed the aforesaid sums by holding that such an expenditure is capital expenditure. Learned CIT(A) though admitted that registration charges paid on lease agreements cannot be held to be capital expenditure, however arbitrarily uphold the addition. It was submitted that since the stamp duty charges were payable in connection with the rental agreement, the same were in the nature of revenue expenses in the absence of any capital asset coming into existence in the hands of the appellant company as such, disallowance made by the AO and sustained by the ld. CIT(A) is directed to be deleted. 44. As regards Ground No. 8 being unabsorbed depreciation relating to AY 2009-10 we find that for the previous year, relevant to the assessment year under consideration, the appellant ha....