TaxTMI 
TaxTMI 
2021 (8) TMI 558
X X X X Extracts X X X X
X X X X Extracts X X X X
....akhs. 5. That the last date for filing of appeal being a holiday, the appeal 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 appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o. 2 of the appeal is dismissed. 8. Ground No. 3 and 4 are with respect to the confirmation 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 equipme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....une, 2010 has been raised by Predominant Engineers and Contractors Pvt. Ltd. on 31st March, 2014, copy of which is enclosed for your ready reference. 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 foll....
X X X X Extracts X X X X
X X X X Extracts X X X X
....claimed either hi the Income Tax Return or in the computation of income." 4.7 However, the Assessing Officer rejected the additional claim of Rs. 15 lakhs disallowed in assessment year 2012-13 and also the claim for 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 co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Appellant submitted during assessment proceedings before the AO. It is seen that the said deduction was claimed in AY 2012-13 and it pertains to A.Y. 2012-12 and the same was disallowed in AY 2012-13 as no TDS was deducted on the same. In AY 2014-15, the same has not been claimed either 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 s....