AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 558
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....ppeal filed is within limitation." 3. Brief facts of the case shows that the Assessee is a company engaged in the business of manufacturing and sale of machines, erection and commission of effluent treatment plant. It filed its return of income on 29.09.2014 declaring loss of Rs. 18,80,93,277/- which was assessed u/s 143(3) of the Act at a total loss of Rs. 18,34,44,617/- wherein, the ld AO made an disallowance of Rs. 1,06,660/- being interest on delayed payment of TDS as well as disallowance of particular period expenditure of Rs. 45,42,000/-. On appeal before the ld CIT(A), both the disallowance were confirmed and therefore, the Assessee is in appeal before us. 4. Despite notice none appeared on behalf o the Assessee. On earlier occasion on 30.12.2020 none appeared so the notice was sent by RPAD for next date of hearing on 09.03.2021. On that date none appeared on behalf of the Assessee. On this date also none appeared on behalf of the Assessee therefore, the issue is decided on the merits of the case. 5. The ld DR supported the orders of the lower authorities. 6. The second ground of appeal is with respect to confirmation of disallowances of the interest of late deposit of t....
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.... of disallowance of Rs. 45,42,000/-. 9. The brief facts of the case are mentioned in para NO. 6 to 11 of the order as ld CIT(A) as under:- "4.3. Ground nos. 3 & 4 : Ground 3 is with respect to disallowance of consultancy charges of Rs. 45,42,000/- and Ground 4 is with respect to rejection of the claim of the appellant for Rs. 15 lakhs already disallowed by the assessing officer in A.Y. 2012-13 in respect of the consultancy charges, now claimed to be allowable during assessment year 2014-15. 4.3.1. The appellant has submitted that: 4.2 It its computation of income for assessment year 2014-15 appellant claimed Rs. 45,42,000/- as deduction towards the marketing consultancy charges paid to M/s Predominant Engineers & Contractors Pvt. Ltd. in terms of consultancy agreement dated 28th June, 2010 (Paper Book pages 32-33), wherein they were appointed as marketing consultant for supply of sponge iron plant equipment. The remuneration payable to them was 3% of ex-works value of orders procured through them and was payable on receipt of the payment of the ordered equipment from the prospective customers. 4.3 Pursuant to this agreement appellant received orders in respect of two nos. of....
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....nce. In view of this, liability crystallized during the year under consideration and is allowable as deduction during this year. Since Rs. 15 lakhs was not allowed in assessment year 2012-13 on which IDS has also been deducted and paid during the year under consideration entire amount of Rs. 60,42,000/- plus service tax thereon aggregating to Rs. 67,88,791/- is allowable as deduction during the year under consideration. Copy of order placed on Predominant Engineers and Contractors Pvt. Ltd. dated 2&h June, 2010, details of date wise supplies made by the assessee and date wise payments received against the same are enclosed for your ready reference. It is, therefore, submitted that instead of Rs. 45,42,000/- claimed in the computation of income Rs. 60,42,000/- may please be allowed as deduction during the year. 4.6 Assessing Officer, however, disallowed the expenditure of Rs. 45,42,000/- as originally claimed in the return of income and Rs. 15 lakhs claimed during the course of assessment proceedings with the following observations:- "4 Disallowance of Prior Period Expenses During the year under consideration, the assessee has claimed the expenses of Rs. 45,42,000/- in Pro....
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....or Rs. 45,42,000/- summarily with the observations that the assessee is following mercantile system of accounting, prior period expenses are not allowable. In case of any ascertained liability assessee is allowed to make provision for the same in its Books of Accounts and if the same has not been incurred, the same is disallowed while computing the tax. The expenses claimed in the computation of income pertain to assessment year 2012-13 and therefore, they are not allowable during the assessment year under consideration. 4.8 Appellant beg to submit that as per consultancy agreement, consultancy charges are payable on receipt of the payment against the supplies of equipments from the prospective customers. Details of the material supplied and the payment details dearly show that the supplies has been continued till September, 2012, whereas payments have been mostly received till June, 2013. Invoice for consultancy charges has been raised by the consultant on 31st March, 2014. Thus, the liability crystallized during the assessment year under consideration and has been accounted for in the Books of the Company during assessment year 2014-15 in an amount of Rs. 45,42,000/- and Rs. ....
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....er in the Income Tax Return or in the computation of income. During assessment proceedings, this claim was made. The Appellant has claimed the same expenses of Rs. 15,00,000/- in AY 2012-13 and has again claimed the same Rs. 15,00,000/- in AY 2014-15. I observe that the AO has correctly not entertained the amount of Rs. 15,00,000/- and I find no valid reason to interfere with the same. Hence Ground nos. 3 & 4 are dismissed. 4.4. Ground nos. 5 & 6 ; are consequential, hence do not require separate adjudication. 10. We have carefully considered contention is of the learned departmental representative and also perused the orders of the lower authorities. The fact clearly shows that there was an agreement dated 28th of June 2010 for payment of marketing consultancy charges to Messer's predominant engineers and contractors private limited. It was appointed as marketing consultant for supply of sponge iron plant equipment. The remuneration was payable to them at the rate of 3% of experts value of the orders procured through them and was payable on receipt of the payment of the ordered equipment from the prospective customers. Therefore the liability to pay commission to this party ari....