2022 (6) TMI 1455

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....er u/s 143(3) of the Act dated 25.11.2016 passed by Dy. Commissioner of Income Tax, Circle-2 Gurugaon (hereinafter referred to as "the Ld. AO"). 2. The brief facts are the assessee filed return of income declaring loss of Rs. 1,16,25,840/- which was picked up for scrutiny and notice u/s 143(2) was served upon the assessee. Notice u/s 142(1) was also issued along with questionnaire and based upon the reply and documents, the Ld. AO had examined the genuineness of the claim of assessee with regard to a sum of Rs. 67,77,463/- which was debited by the assessee as paid to its associate concern for availing, their expert services to manage its business in India. The same was disallowed u/s 37(1) of the Act and added back to the taxable income.....

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.... been regularly and consistently charged in books of accounts by the appellant every year. 1.3 That the CIT(A) grossly erred on facts and in law in confirming the aforesaid addition made by the assessing officer without appreciating that the incurrence of management service fees was a business necessity for the appellant. 1.4 That the CIT(A) grossly erred on facts and in law in confirming the aforesaid addition made by the assessing officer without appreciating that the expenditure incurred by appellant on account of management service fees during the relevant assessment year was properly verified and audited by the statutory and tax auditors of the company and found the same to be genuine (since no adverse comments were r....

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....te of hearing." 5. The case was called for hearing on 23.02.2022 but none appeared for the appellant-assessee. The record shows that earlier on 25.08.2021, 25.07.2021, 20.12.2021 also none has appeared for the assessee. Thus, taking into consideration, the mandate of Rule 24 of the Income Tax (Appellate Tribunal ) Rules, 1963, the appeal is being disposed of on merits after hearing Sr. DR for revenue who supported the orders of Ld. AO and Ld. First Appellate Authority. 6. Giving thoughtful consideration to the grounds of appeal, arguments and matter on record it can be observed at outset that all the grounds of appeal are connected to each other and controversy being, if the disallowance of expenditure on account of group management f....

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....hat the invoices/ bills were also not furnished by the assesse. Ld. AO also observed in its order that the assessee could not explain the mode of rendering the services in India such as the alleged consultant has actually worked at the project site in India. Thus, relying the judgment of Hon'ble Delhi High Court in Commissioner of Income Tax-I vs. Cushman and Wakefield (India) (P.) Ltd. [2014] 46 taxmann. com 317 (Delhi), the Ld. AO concluded that in spite of the assessee's case being covered by transfer pricing provision Section 37 of the Act can be invoked for disallowance of the expenditure, which is not for the benefit of the business. 9. The ld. First Appellate Authority observed that during appeal also appellant was asked to submit....