TaxTMI 
TaxTMI 
2025 (10) TMI 206
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Tax Act, 1961 (the Act) all dated 01.10.2024 for Assessment Years (AY) 2017-18, 2018-19, 2020-21, 2022-23. Since the issues contented in all these appeals are common, the appeals are heard together and disposed off through this common order. The common issues contended in all the AYs under consideration pertain to disallowance of Occupancy Expenses and disallowance of ESOP Expenses. For AY 2022-23, besides the above two issues the assessee has raised grounds pertaining to disallowance of legal and professional expenses and disallowance of service charges and cost recharges from affiliates. ITA No. 6763/Mum/2024 - AY 2020-21 2. The assessee is a private limited company and is a non-deposit taking non- banking finance company (NBFC). T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce the disallowance made by the AO. The ld. AR also submitted that the CIT(A) has stated that the AO during the assessment proceedings for AY 2022-23 has made disallowance of the entire expenditure and that the assessee could not substantiate with documents supporting the claim of Occupancy Expenditure. The ld. AR argued that enhancing the disallowance made by the AO without issue of show-cause notice cannot be sustained. 5. The ld. DR on the other hand submitted that the Occupancy Expenses claimed by the assessee has been disallowed by the AO in AY 2022-23 for want of evidence. The ld. DR further submitted that the CIT(A) called on the assessee to furnish the supporting documents with regard to cost allocation towards Occupancy Expense....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation by GSISPL. The ld. AR during the course hearing submitted that the details called for pertain to the group entity and therefore the assessee needed time to collate the details which was not provided by the lower authorities. Accordingly the ld AR prayed for one more opportunity to submit the relevant details called for. Considering the facts and circumstances of the case, we see merit in the plea of the assessee that details called for is time consuming to collate and accordingly in the interest of natural justice and fair play we deem it fit to remit the issue back to the AO. The AO is directed to examine the impugned issue afresh by calling for necessary details and decide on merits in accordance with law. The assessee is directed t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....76 Taxman 1/430 ITR 151. Accordingly in our view, the disallowance on basis that the ESOP expenses is contingent in nature cannot be sustained. However, the amount claimed as expenditure, the basis of allocation of ESOP cost by GSGI etc., needs to be factually examined. From the perusal of the orders of the lower authorities we notice that one more reason for disallowance of ESOP expenses is that the assessee failed to furnish the details called for with regard to the claim of expenditure such number of employees towards whose ESOP cost GSGI has recharged the assessee, whether TDS has been deducted under section 192 etc. Therefore to the limited extent of verifying the cost recharged by GSGI we are remitting the issue back to the AO with a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s for upholding the disallowance are based on his own findings in AY 2020-21. Therefore in our considered view our decision on these two issues in AY 2020-21 is mutatis mutandis applicable for AY 2022-23 also. Accordingly we remit the issues back to the AO with similar directions. It is ordered accordingly. Disallowance of legal and professional expenses 11. During the year under year under consideration, the assessee has claimed a sum of Rs.43,17,804 towards legal and professional expenses. The AO during the course of hearing noticed that the claim includes a sum of Rs.10,23,393 which is claimed on adhoc basis. The AO did not accept the submission of the assessee that these are provision made towards services already received by the ....