2022 (10) TMI 158

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....ed Authorized Representative of the assessee submitted, ground nos. 1, 2 and 3 are general grounds, hence, do not require adjudication. Accordingly, ground nos. 1, 2 and 3 are dismissed. 3. Proceeding further, he submitted, as per instructions of the assessee, he does not want to press ground nos. 4 and 6. 4. In view of the aforesaid, ground nos. 4 and 6 are dismissed as not pressed. 5. In ground no.5, assessee has challenged disallowance of testing and coordination expenses amounting to Rs.90,77,936. 6. Briefly, the facts are, assessee is a resident corporate entity and is a subsidiary of Intertake Holding UK. As stated by the assessing officer, assessee is engaged in the business of rendering testing and inspection services to....

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....re their quality and adherence to various regulatory requirements and industries standard as per the country of their use. He submitted, such testing is required to ensure quality control of the products under shipment. He submitted, though, assessee has its own testing facilities in various places, however, it doesn't have all the facilities to test a particular product. In such cases, assessee outsources those tests to its overseas group entities. He submitted, the overseas entities carry out the work on behalf of assessee and forward their reports. He submitted, for the job performed by the overseas entities, assessee makes the payment. Thus, he submitted, testing charges are wholly and exclusively in connection with assessee's business.....

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....g of the product. Therefore, the observation of learned Commissioner (Appeals) that the expenditure incurred is not wholly and exclusively for the purpose of business appears to be without verification of facts on record. In any case of the matter, it has been brought to our notice by the learned representative of the assessee, which has not been controverted by learned Departmental Representative, in the preceding assessment years, the revenue has never doubted the nature and character of the expenditure to be for the purpose of business. 14. In view of the aforesaid, we hold that the disallowance sustained by learned Commissioner (Appeals) is unjustified. Accordingly, we delete the disallowance of Rs.90,39,900. 15. In ground no.7, a....