TaxTMI 
TaxTMI 
2018 (12) TMI 1338
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....5-06. Thus, the two appeals. 2. The Revenue has urged the following common questions of law in regard of A.Ys. 2004-05 & 2005-06 for our consideration:- "(1) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the disallowance of deputation and other cost by relying on the CIT(A) order, which in turn had relied upon the report of Special Auditors appointed u/S. 142(2A) of the Act? (2) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified deleting the disallowance of Hotel Management fees and sales & management fees by relying on the CIT(A) order, which in turn had relied upon the report of Special Auditors appointed u/S. 142(2A) of the Act....
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.....2007 under Section 143(3) of the Act, the expenditure of Rs. 7.56 crores was disallowed. (b) On appeal, the Commissioner of Income Tax (Appeals) allowed the expenditure of Rs. 7.56 crores on account of deputation costs and other costs by relying upon its earlier order for A.Y. 2003-04 dated 22.1.2008 which was upheld by the Tribunal on 5.10.2012. (c) Being aggrieved, the Revenue challenged the issue in appeal before the Tribunal. The Tribunal after examining the Special Auditor's report held as under:- "From the above report, we found that the Special Auditor has verified all the branch wise and month wise certificates of Motilal & Associates certifying expenses incurred by CKIL in the respective branches. The Auditor also observed....
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....e, the question as proposed does not give rise to any substantial question of law and thus, not entertained. 6. Regarding Question No. (2):- (a). The respondent is engaged in hotelling business. It appointed Tulip Hotel (P) Ltd to manage its hotel. It claimed expenses of Rs. 79.93 lacs being the aggregate of Hotel Management Fees (Rs. 61.93 lacs) and sales and market expenses (Rs. 18 lacs) paid to Tulip Hotel (P) Ltd. During the assessment proceedings, a Special Auditor under Section 142(2A) of the Act was appointed. The special auditor on investigation held that in terms of the agreement with Tulip Hotel (P) Ltd, 3% of the gross revenue to be paid as hotel management fees comes to Rs. 59.30 lacs and the same is allowable. It also held th....
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....siness in terms of the management agreement arrived at between Tulip Hotels Pvt Ltd and the assessee i.e. Rs. 59.30 lacs and Rs. 18 lacs of sales and marketing expenses. Further, the Special Auditor under Section 142(2A) of th Act had also accepted that these expenses of Rs. 77.30 lacs (in the aggregate) on account of Hotel Management fees and Sales & Marketing fees was allowable. Thus, dismissed the Revenu's appeal. (d) We find that both the CIT(A) and the Tribunal have come to concurrent findings of the fact that the expenses of Rs. 77.30 lacs on account of hotel management fees and sales and marketing fees were allowable expenses having been incurred for the purpose of business. This was on the basis of examination of the record whi....
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....leted while allowing the appeal by its order dated 15.3.2008. (c) Being aggrieved by the order of CIT(A), the Revenue filed an appeal on this issue before the Tribunal. By the impugned order, the Tribunal upheld the deletion of depreciation on intangible assets by upholding the finding of the CIT(A) that it is undisputed that the intangible assets were purchased as slump sale and fell under block of assets on which depreciation is allowable @ 25%. Thus, not possible to bifurcate between various assets. Further, it holds that even the assessing officer does not dispute that the business of the respondent could not be carried out without necessary licenes, permits and approvals. Thus, disallowed the Revenu's appeal. (d) We find that bot....
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....ed for same as income. The balance amount of Rs. 10 lakh as per the agreement was not received during the previous year relevant to AY 2004-05. Thus, the only amount of Rs. 50/- lakh was to be considered as income of the assessee and Rs. 10/- lakh was not admittedly received by the assessee. This it found was also accepted by the Special Auditor. Thus, it deleted the addition of Rs. 10 lakh being royalty as income for subject assessment year while allowing the appeal of the respondent. (c) Being aggrieved, the Revenue filed an appeal on this issue to the Tribunal. The impugned order upheld the findings of the CIT(A) and in particular noted the fact that when the services were not rendered, there was no question of any accrual and / or rece....