2016 (3) TMI 1379

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.... a partnership firm and is engaged in the business of trading in Paintings and investments. It filed its return of income declaring a total loss of Rs. 1.66 crores. During the course of scrutiny proceedings, the AO noticed that the assessee has paid a sum of Rs. 1,92,65,256/- as professional fee to a person named Shri Aditya Mitra Anand and had also deducted TDS therefrom. It was submitted that the assessee had utilised his services in the field of authentication and valuation of paintings. The AO conducted enquiries with that person, who initially declared that he has received a sum of Rs. 29,75,000/- only. But when the TDS certificate was pointed out to him, he admitted his mistake in declaring a wrong figure. Thereafter, the AO issued su....

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....o what expenditure has to be incurred by the assessee. The assessee also placed reliance on the following case laws in support of its contentions:- (a) CIT Vs. Walchand and Co. (P) Ltd (65 ITR 381)(SC) (b) J.K. Woollen Manufacturers Vs. CIT (72 ITR 612)(SC) (c) Aluminium Corporation of India Ltd Vs. CIT (86 ITR 11)(SC) (d) CIT Vs. Oracle India Pvt Ltd (11 Taxmann.com 139)(Delhi) (e) J.K. Industries Ltd Vs. CIT (11 Taxmann.com 72)(Cal) (f) Jamshedpur Motor Accessories Stores Vs. CIT (95 ITR 664)(Patna) (g) CIT Vs. Shree Panchaganga Sahakari Sakhar Karkhana (118 Taxmann 122)(Bom) 4. The Ld CIT(A) was convinced with the contentions of the assessee and accordingly directed the AO to delete the disallowance made by him. A....

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....ified by the fact that the AO himself has partly allowed the claim. The AO was not satisfied with the reasonableness of the expenditure. The main reason cited by the AO in this regard was that Shri Aditya Mitra Anand has utilised the services of M/s First Canvass and accordingly the AO has inferred that the services were actually rendered by M/s First Canvass to the assessee. In this regard, the Ld A.R submitted that it is quite common for any professional to avail assistance services from any other professional. He further submitted that availing of professional services is a prevailing commercial practice and hence the AO was not justified in taking adverse inference against the assessee. It is pertinent to note that the assessing offi....