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TMI Blog2012 (7) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... f advertisement and publicity. 2. On the facts and circumstances of the case, the CIT(A) erred in law on merits of the case in deleting the addition of Rs.41,28,145/- on account of reimbursement of expenses to Holding Company. 2. As regards the first issue, the challenge is with regard to deletion of addition of Rs.8,74,048/- under the head "advertisement and publicity" expenses being payments made to M/s P.R. Pandit Public Relation Pvt. Ltd. The Assessing Officer has stated that he had asked for the complete details of payment made to M/s P.R. Pandit and also to produce photocopies of bills in this regard. However, the assessee could produce a copy of agreement with M/s P.R. Pandit Public Relations Pvt. Ltd. and M/s Sports Stations Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents made to M/s P.R. Pandit Public Relations Officer and has also deducted tax on such payments. The appellant has entered into an agreement with Savatore Ferragamo, Honking for marketing footwear, apparels and accessories in Indian market and had engaged M/s P.R. Pandit for the purposes of public and advertising services. The Assessing Officer has no where been able to conclude that M/s P.R. Pandit Pvt. Ltd. has not rendered any services in the appellant. As such the disallowance of Rs.8,74,048/- is hereby deleted and this ground is decided in favour of the appellant." 5. Aggrieved by this order of CIT(A), department has come up in appeal and it was strongly pleaded that assessee has neither produced copy of the agreement between assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest of justice and to have fair play in the matter, we find it just and appropriate to set aside the order of the CIT(A) in this regard and restore the issue back on the file of the Assessing Officer to reconsider the issue in hand afresh after granting due opportunity to the assessee. We hold and direct accordingly. 8. As regards second issue in relation to deletion of Rs.41,28,145/- on account of reimbursement of expenses to holding company, facts indicate that Assessing Officer made disallowance of expenses shared with the holding company. Assessing Officer has stated in para. 3 of his order that the assessee had failed to furnish basis of disbursement to the holding company and, therefore, he disallowed a sum of Rs.41,28,145/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in both the cases. As the Assessing Officer has allowed 50% of the expenditure therefore he did not doubt that the holding company had actually rendered services for which it was reimbursement by the appellant. Once the genuineness of the services is not questioned and there is no tax implication involved no disallowance on an estimate basis can be made. Therefore, an addition of Rs.41,28,145/- is hereby deleted." 11. Aggrieved by this order of CIT(A), department has come up in appeal and it was strongly pleaded that CIT(A) has erred in law on merits of the case in deleting the addition of Rs.41,28,145/- on account of reimbursement of expenses to the holding company without appreciating the fact that despite having given due opportunity to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or granting relief to the assessee without associating the Assessing Officer with appeal proceedings or calling for remand report form the Assessing Officer. Therefore, in our considered view, there is a clear violation of Rule 46A of the I.T. Rules in this regard and therefore, in view of facts, circumstances and material on record, we find it just and appropriate to set aside the orders of the authorities below in his regard and restore the matter back on the file of the Assessing Officer with the direction to re-decide the issue afresh after giving due opportunity to the assessee. We hold and direct accordingly. 14. As a result, the appeal filed by the department gets accepted for statistical purposes. Order pronounced in open court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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