2021 (2) TMI 1011

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....-7. 2. The assessee is mainly aggrieved by levy of penalty u/s. 271(1)(c) on account of disallowance of 'legal and professional' expenses for sum of Rs. 36,11,832/- and disallowance account of building repair expenses of Rs. 19,93,239/-. The relevant observation for making the disallowance out of legal and professional charges by the Assessing Officer was as under:- 5. Disallowance out of legal & professional charges On perusal of legal & professional charges it is sees that assesses has debited Rs. 2,50,32,832/ and paid to holding company. Regarding management consultancy of Rs. 2,14,21,000/- the amount has been added by TPO. In the transfer pricing order dated 27-10-2009, TPO has recommended enhancement of Rs. 2,14,20....

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....as furnished the details, perusal of which reveals that an amount of Rs, 19,93,239/- has been paid to M/s. Sarvmangal Builders & Developers P. Ltd. on account of Misc. Petty expenses incurred for office repairs but no details on evidence for such petty expenses have been furnished: Further perusal of the details shows that the assessee has also: incurred an amount of Rs.l2,00,000/-(Rs. 900000 + Rs. 300000) for the repair of M.'D's House. In absence of any details or evidence, the amount of Rs. 19,93,239/- cannot be said to be revenue expenditure. Further, the maintenance expenses of M.D's house cannot be said to be for business purposes, Hence, the total amount of Rs,81,93,239/- (Rs, 19,93,239 + Rs. 12,00,000) is disallowed and added to....

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....d payment of such expenditure has not been doubted. 5. On the other hand, ld. DR has strongly relied upon the order of the Assessing Officer and Ld. CIT (A). 6. After considering the aforesaid submissions and on perusal of the relevant material placed on record, we find that, in so far as the disallowance of legal and professional charges of Rs. 36,11,832/- is concerned, same has been paid by the assessee to its AE for consultancy services for which invoice was also filed. The disallowance has been made merely on the ground that the invoice mentions that the assessee has received and item, IPC - item no. 10001669 and hence it was treated as capital in nature and not revenue in nature. Simply because, the consultancy services has been ....