TaxTMI 
TaxTMI 
2026 (5) TMI 541
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....) has failed to appreciate that similar additions were made in earlier years and addition on account of Consultancy charges paid to Oxbridge International Pvt. Ltd. was held to be as normal business expenses and the said additions' were deleted in earlier years and since the facts are same as per last year and, the CIT(A) was found to follow the order of higher forum i.e. Hon'ble ITAT and rather than confirming the addition in a summary manner. 4. That the Ld.CIT(A) has erred in confirming the addition on account of increase in Vehicle loans to the tune of Rs. 10,49,848/- as per para 5 of the order. 5. That the above addition has been confirmed against the facts and circumstances of the case." 2. Brief facts relating to the grounds raised before us, assessee filed its return of income on 30.09.2016 declaring total income of Rs. 7,78,29,110/-. The case was selected for scrutiny through CASS and notices under section 143(2) and 142(1) of the Income-tax Act, 1961 (for short 'the Act') were issued and served on the assessee through e-portal. In response, ld.AR of the assessee attended and submitted the relevant information as called for. During assessment p....
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....sidering the detailed submissions, ld. CIT (A) dismissed the grounds raised by the assessee by observing as under :- 8.4.3 During appeal proceedings, submissions made by appellant against above disallowance can be summarized as under. 1. M/s Oxbridge International Pvt Ltd Is a competent and qualified professional company to provide advice and technical consultancy services which can be verified from profile of employees. 2. Service charge paid to M/s Oxbridge International Pvt Ltd is in accordance with contract agreement entered into with it by assessee and AO has not doubted authenticity of contract. 3. During the year, M/s Oxbridge International Pvt Ltd has provided such consultancy services to outside party Sri George Venatius Antony, earned revenue of Rs 57,88,212/- 4. M/s Oxbridge International Pvt Ltd is regularly filing returns of Income admitting income from consultancy service. The assessee has deducted TDS on payments made to above concerns and remitted service tax too. 5. Incurrence of expenditure has never been doubted by AO. Reasonable basis for arriving at excess expenditure has never been mentioned by AO in assess....
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.... approval and communication given by assessee granting approval etc. The Appellant vide written submissions admitted the fact that sale invoices raised during the year do not contain details of services provided by M/s Oxbridge International Pvt Ltd. Therefore, absolutely no evidence with regard to actual rendering of service has been provided by appellant unlike in earlier years. Existence of consultancy agreement between related parties does not automatically leads to presumption of actual rendering of service especially in absence an iota of evidence of actual rendering of service. The claim of appellant that not mentioning of details of services provided on payment invoices is to maintain secrecy does not sound convincing. The only reason, AO has allowed 50% of expenditure is in view of fact that M/s Oxbridge International Pvt Ltd has filed return of income offered the profit worked out from consultancy charges to tax. I am in agreement with AO that payment made to M/s Oxbridge International Pvt Ltd.is/to be considered excessive in absence of any evidence of actual rendering of services to appellant, 50% of disallowance made by AO is considered reasonable. Consequently, Ground ....
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....vice charges paid to Oxbridge International Pvt. Ltd. is genuine business expenditure on which TDS was deducted and deposited by the assessee and also service-tax has been charged on the abovesaid invoices. He further brought to our notice page 3 of the synopsis and submitted the history of expenditure allowed by the ITAT in the earlier assessment years i.e. AY 2013-14 and 2014-15 and in subsequent assessment years, the same was allowed and the relevant finding is as under:- AY 2013-14 AY 2014-15 AY 2015-16 AY 2016-17 AY 2017-18 AY 2018-19 60,42,481 1,01,12,400 72,00,000 1,31,11,135 72,00,000 45,00,000 ITAT confirmed the disallowance to the extent of 10% of total expenditure ITAT confirmed the disallowance to the extent of 10% of total expenditure Assessed u/s 143(1) and no disallowance is made. Year under consideration Assessed u/s 143(3) of the Act and no disallowance is made. Assessed u/s 143(3) of the Act and no disallowance is made. Refer Page 52 - 63 Refer Page 52 - 63 Refer Page 64 - 65 Refer Page 66 - 68 8. He prayed that the issue under consideration is squarely covered in favour of th....
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....nd sample evidences of such expenditure have also been brought on record, the genuineness of such expenditure cannot be doubted. 12. Further we observed that similar addition was also made by the Assessing Officer in AYs 2013-14 & 2014-15 and in both these years, the ITAT Amritsar had restricted the disallowance to only 10% of the complete expenditure. Further we observed that in the AYs 2015-16, 2017-18 & 2018-19, the case of the assessee was assessed u/s 143(1)/143(3) of the Act and no such disallowance was made therein. Further we observed that the AO has not doubted the identity of M/s Oxbridge International Pvt. Ltd. and neither any evidence of comparable of fair market value of the services has been brought on record. We also observed that such expenditure has been duly verified by the Chartered Accountant as is evident from the audit report for the year under consideration. We observed that M/s Oxbridge international Pvt. Ltd. is a professional firm engaged in this business and a list of its employees along with their qualification is also filed by the assessee in the paper book at page 33. 13. Further we observed that Ld. CIT(A) concluded that the actual expenses incu....
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....ars purchased in the AY 2015-16 was claimed for the part of the year, however, the interest cost in AY 2016-17 was claimed resulting in a total increase in interest cost to the tune of Rs. 10,49,848/-. Accordingly, we observed that the claim of interest of Rs. 20,96,759 is a genuine business expenditure on loans taken from banks and therefore, merely because there is no purchase of vehicles in the year under consideration, it does not mean that the interest claimed by the assessee is excessive as it was claimed on the assets purchased in the earlier years, for which the loan is outstanding in the year under consideration. Hence, in view of our above observations, we observed that the assessee has claimed the genuine business expenditure and therefore, the same is allowed and the disallowance made by the lower authorities is deleted. 15. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on this 15th day of April, 2026. ============= Document 1 Exhibit "A" · 'Consultancy support to maintain plumbing, electrical & HVAC system. . Consultancy and advisory support for drawing / designing and execution of various civil works....