TaxTMI 
TaxTMI 
2019 (6) TMI 1289
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....from assessment order dated 29.12.2016 passed by learned Assessing Officer (hereinafter called "the AO") u/s 143(3) of the Income-tax Act, 1961 (hereinafter called "the Act") for AY 2014-15. 2. The grounds of appeal raised by assessee in memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:- "1.1 The Learned Commissioner of Income tax (Appeals) - 6, Mumbai ["Ld. CIT (A)"] erred in upholding the addition of Rs. 21,77,660/- for the expenses incurred of related parties. 1.2 It is respectfully submitted that assessee, company has made expenses actually incurred by the holding company on behalf of the assessee, company. The detail of the same was submitted with the basis of ch....
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....ds generated by related party. It is also not brought on record as per AO whether these transactions with related parties were at arm's length and why income-tax was not deducted on these payments . The additions to the tune of Rs. 21,77,660/- were made by the AO u/s. 40A(2)(b) and added to the income of the assessee , vide assessment order dated 29.12.2016 passed u/s. 143(3) of the 1961 Act. 3.2 Aggrieved by an assessment framed by the AO u/s 143(3) vide assessment order dated 29.12.2016, the assessee filed first appeal with learned CIT(A) and submitted that it is getting sourcing lead of prospective clients from different vendors including related party . The written submissions were filed by the assessee before Ld. CIT(A) , as under:- ....
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.... AO in the assessment order, oral contentions and written submission of the assessee and material available on record. During the course of assessment proceedings, the AO asked assessee to submit details of leads generated by the related party and the details of service charges paid. The assessee made submission that the assessee has paid reimbursement on the sale leads received in the ratio of 90:10 out of the total expenditure incurred by the related party. However as has been mentioned in the assessment order, no details of customers etc. were submitted as regards these sale leads. Further the assessee could not produce the transactions with the customer list. As such the assessee failed to submit supporting evidences in respect of the e....
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....s leads generated by its related party in favour the assessee. The assessee also could not submit details of business actually generated in its favour through such sales leads generated by its related party. Thus, in nut shell the assessee could not prove that these payments made to its related party were actually incurred wholly and exclusively for the purposes of business of the assessee. The assessee has also not filed any paper book even before tribunal containing evidences to prove that these expenses were incurred wholly and exclusively for the purposes of business of the assessee. The onus is on the assessee to prove that these reimbursement of expenses to related party were wholly and exclusively incurred for the purposes of busine....
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.... as under:- " 8.3 I have carefully considered the facts of the case, discussion of the AO in the assessment order, oral contentions and written submission of the assessee and material available on record. In respect of this issue the Ld. AR was asked by the AO to explain to whom the gifts were given and how the expenditure was incurred wholly and exclusively for the purpose of business, it is the observation of the AO that the Ld. AR, however, was unable to explain the same. Even during the instant proceedings, the Ld AR of the appellant but for making the submission as above has not given any factual details of giving gifts to business customers/associates from whom the business was done/benefited. Under the facts and circumstances of th....