2025 (12) TMI 696

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.... emanated from the order of the Learned Assistant Commissioner of Income-tax- 20(1), Mumbai (in short, 'Ld.AO') passed under section 143(3) of the Act, date of order 31/12/2008. 2. The assessee has taken the following grounds of appeal:- "1. The said Legal & Professional fees amounting to Rs 10,00,000/- was paid to Mr. Nitin Barve during the FY 2001-02 as an Advance to consult, advise and oversee the Firm export business Since the TDS provisions were not applicable during that FY, hence the TDS was not deducted on payment of the same. Since the outcome of outsourcing the sales promotion activity was I visualised in the FY 2005-06 on the basis of sales achieved due to outsourcing the activity, and on the basis of the expenses cla....

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....rofessional charges". The alleged amount was debited to P&L Account during the impugned previous year 2005-06. Further, the addition was confirmed related to disallowance of expenses under the head "motor car expenses & car depreciation' amount to Rs. 33,424/- and under the head "telephone expenses" amount to Rs. 23,517/-. In respect of both these expenses, the Ld.CIT(A) disallowed 20% of the expenses claimed by the assessee. The aggrieved assessee filed an appeal before us. 4. The Ld.AR argued and stated that the on debiting of Rs 10 lakh the assessee had already made the payment to consultant on FY 2001-02. The TDS will not be applicable for the payment. Only the book adjustment was made during the the impugned assessment year. Related....

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....3-2004 and Mr. Nitin Barve was paid an advance of Rs. 10,00,000/- during said period. She added that on expiry of warranty of export sales period, the said advance given to Mr. Nitin Barve was claimed as expenditure. The said export business activity was stopped on discontinuation of his services. She furnished the details of customer wise sales (in Rs.) year wise for the period from April 1998 to March 2009 along with her written submission dated 24.02.2010 as under: 5.7 It is pertinent to mention here that where an assessee claims prior period expenditure in the current year onus is on him to substantiate the claim. It is because the settled principle is that the deductions can be permitted in respect of only those expenses which....

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....,00,000/- made on account of disallowance of expenses claimed by the appellant under the head 'Legal & professional fees' is upheld and this ground of appeal is dismissed." 6. We have heard the rival submissions and perused the material available on record. Based on the arguments advanced by the Ld. DR, it is observed that the assessee had debited an amount of Rs. 10,00,000/-, which was claimed to have been paid in A.Y. 2001-02 as an advance to a consultant, Shri Nitin Barve. The said amount was debited to the Profit & Loss Account in the impugned assessment year. The assessee contended that no TDS was applicable in its case. On perusal of the record, we find that the assessee did not deduct TDS under section 194J of the Act w....