TaxTMI 
TaxTMI 
2019 (5) TMI 1920
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....ssment year under consideration declaring the total income of Rs. 26,38,21,490/-. Since, the case was selected for scrutiny, the AO issued notice u/s 143 (2) and 142 (1) of the Act. Accordingly, the authorized representative of the assessee appeared before the AO and filed the details called for by the AO. The AO after hearing the authorized representative made disallowance of fees paid to sister concern for research amounting to Rs. 2,39,18,400/- u/s 40A of the Act out of total amount of Rs. 2,99,18,400/- claimed by the assessee. The AO further made disallowance of marketing services fees paid to the group companies amounting to Rs. 1,04,88,902/- out of total amount of Rs. 2,24,88,902/- claimed by the assessee holding the same unreasonable. The assessee challenged the action of the AO before the Ld. CIT (A). The Ld. CIT (A) after hearing the assessee deleted the addition made by the AO on account of disallowance of fees paid to its sister concern, however, confirmed the disallowance made on account of marketing services fees claimed by the assessee. The revenue and the assessee have filed cross appeals against the said order. 2. The revenue has challenged the impugned order pas....
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....is aspect assessee succeeds. 8. Respectfully following the decision of Hon'ble ITAT, Mumbai on this issue, I allow the expenses claimed as business expenditure. In view of the same, Ground No. 2 is allowed." 9. Ground No. 3 is general in nature, which does not require any adjudication, hence, dismissed." 6. Since, the findings of the Ld. CIT (A) are based on the decision of the coordinate Bench rendered in the assesee's own case for the AY 2011-12, we do not find any reason to interfere with the findings of the Ld CIT (A). Moreover, the revenue has not pointed out any material change in the facts of the present case. Hence, respectfully following the decision of the coordinate Bench passed in assessee's own case referred above, we uphold the decision of the Ld. CIT(A) and dismiss the sole ground of appeal of the revenue. ITA No. 4259/MUM/2017 (Assessment Year: 2012-13) The assessee has challenged the impugned order passed by the Ld. CIT (A) by raising the following grounds:- 1:0 "Re: Disallowance of Rs. 2,39,18,400/- paid by the Appellant to Quantum Asset Management Company Private Limited ("QAMC") for research fee': 1:1 The Commissioner....
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....tal research fees received by QAMC. It was further pointed out that the QAMC has offered the entire amount of research fees, to tax and paid the same rate of tax as was applicable to the assessee. The Ld. counsel further pointed out that the assessee has produced the copy of audited annual accounts and the copy of return of income filed by QAMC before the first appellate authority under rule 46A(c) and (d) of the Income Tax Rules. The Ld. counsel further submitted that as per the settled law once it is established that there is a nexus between the expenditure and the purpose of business the revenue cannot claim to put itself in the position of the Board of Directors and assume the role to decide as to how much is reasonable expenditure having regard to the circumstances of the case. The Ld. counsel placing reliance on the judgment of the Hon'ble Bombay High Court in the case of CIT vs. Indo Saudi Services (Travel) Pvt. Ltd. 310 ITR 306 (Bom), submitted that since the revenue has failed to point out as to how the assessee evaded tax by making payment to its subsidiary, the action of the Ld. CIT(A) is liable to be set aside. The Ld. counsel further relying on the judgment of the Hon'....
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.... (i) That the assessee apart from paying handling charges @ 91/2 per cent to its sister concern, have paid handling charges at the same rate to other agents Viz. M/s A.K. Travels, M/s Om Travels and M/s Jet Age Travels. (ii) For asst. yr. 1986-87 and 1987-88 the assessee had paid the handling charges paid were considered to be reasonable by the appellant. (iii) For asst. yr. 1989-90 and 1990-91 the assessee had reduced the payment of handling charge to 9 1/2 per cent to its sister concern. The AO has considered the payment of commission to the sister concern in the asst. yr 1989-90 and allowed the claim after due scrutiny. For asst. yr. 1990-91 also the claim of the assessee @ 9 ½ per cent has been allowed though the same has not been dealt with by the AO specifically in the order. (iv) For asst. yr. 1993-94 and 1994-95 the assessment has been made by the AO under section 143 (3) and handling charges paid to the sister concern @ 9.5 per cent have been considered to be reasonable and allowed. (v) The sister concern of the assessee M/s Middle East International is also assessed to tax and income assessed for the asst. yr. 19914-92 is....