2026 (3) TMI 63

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....to the Assessment Year 2014-15. 2. The Revenue has raised the following grounds of appeal: (1) On the facts and circumstances of the case and in law the Ld.CIT has erred in deleting the addition of Rs. 5,13,33,549/ made on account of disallowance of salary expenses even though the disallowance was made after detailed verification of profit & loss account and related submissions filed by the assessee as well as considering the disproportionate quantum of salary to the revenue and in absence of cost allocation or justification linking the employee salaries directly to income earned and the assessee failed to prove that entire salary expenses were incurred for its business purpose. (ii) On the facts and circumstances of th....

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....549/-. Further, the AO made disallowance of foreign expenses u/s. 40(a) of the Act, legal and professional expenses, relocation expenses and computer expenses totaling to Rs. 64,19,433/. The AO also made addition of Rs. 62,80,779/- towards undisclosed receipts. 4. The assessee filed appeal before the Ld.CIT(A). The Ld.CIT(A) partly allowed the appeal of the assessee. 5. The Ld.DR submitted that the Ld.CIT(A) erred in deleting the addition of Rs. 5,13,33,549/- made on account of disallowance of salary expenses even though the disallowance was made after detailed verification of profit and loss accounts which was the disproportionate quantum of salary and in the absence of cost allocation or justification linking employee salaries direc....

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....re ground no.1 of Revenue's Appeal is dismissed. 8. As regards to ground no.2 related to addition of Rs. 64,19,433/-. The assessee before the AO has categorically mentioned that the expenses related to foreign expenses are approved outside India and has demonstrated that the AO's own description reveals that interstate USA was a mere mediator and categorically support its characterization as pure reimbursement for facilitating the USA company. Therefore the Ld.CIT(A) has rightly held that these reimbursements do not attract TDS. As related to legal and professional expenses, re-location and travelling expenses as well as computer and IT funds expenses/BI platform charges, the assessee has given all the details and has categorically indic....