9911796707
TMI Blog2013 (6) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... only to reduce the tax liability of the year. 3. The appellant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of hearing. C.O. No.367/Del/2012: 1. That the disallowance of Rs.16,39,833/- on account of legal and professional charges made by the Assessing Officer in para 9 of the impugned assessment order and confirmed by the Ld CIT(A) vide para 4 of his appellate order is arbitrary, unjust and illegal. 2. That without prejudice to ground No.1 above, the disallowance as made by the Assessing Officer is very excessive. Various observations made by the authorities below in their respective orders are either incorrect or are legally untenable. The case laws relied upon by the Ld CIT(A) were distinguishable on facts and had no application to the facts of respondent - assessee's case. 3. That the respondent -assessee reserves its right to ad, amend/modify the grounds of cross objection. 2. The brief facts of the case are that the assessee is said to be engaged in the business of developing/deployment and providing services in the field of electronic, web based technology and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal & professional charges. On explanation, the assessee explained that the said expenses were paid to M/s APC Securities (India) Pvt. Ltd. for and in relation to business activity of the company. The Assessing Officer, however, held that the expenses were nothing but an arrangement to inflate the expenses and therefore he made a further addition of the said amount of Rs.16,39,833/-. 5. Dissatisfied with the order, the assessee filed appeal before Ld CIT(A) and submitted that the disallowance of Rs.30,91,500/- was not justified as the same was added back to the income of the assessee on the basis of addition made in the preceding year. It was further submitted that in an appeal Ld CIT(A) vide its order dated 12.5.2009 had deleted such disallowance in assessment year 2006-07 and further Department's appeal before ITAT against the deletion made by ld CIT(A) was dismissed vide order dated 31.5.2010. In this respect a copy of order of Hon'ble ITAT was also filed. The Ld CIT(A) on the basis of ITAT order deleted the addition made by Assessing Officer. 6. As regards disallowance of Rs.16,39,833/- on account of legal & professional charges it was submitted before Ld CIT(A) that servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable under any law in force. 4.2 In the instant case, there are absolutely no details of any services rendered by M/s. APC Securities (India) Pvt. Ltd. There was no confirmation of any arrangement between the parties and that there was considerable doubt. that in the normal course of business dealings, such a transaction could be entered into on the basis of an agreement particularly when the scope of work is vague and the terms of payment are also not well defined. The assessee has not filed any documentary evidence to prove the nature of services required to be rendered by M/s. APC Securities (India) Pvt. Ltd. Nor regarding the rate of consultancy fee required to be paid for the services by the assessee-company to M/s. APC Securities (India) Pvt. Ltd. Secondly, the perusal of the balance sheet (Schdule-4) reveals that the assessee has made investments to the extent of RS.1 crore in units of RS.IO each of Optimix Active Debt Multi-Manager FoF Scheme-Dividend during the year under consideration which has been shown under the head 'current investments'. Apart from that there are old investments carried forward from the preceding year to the extent of Rs,4,82,77,672 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available on record. We find that the first issue of Rs.30,91,500/- is squarely covered in favour of assessee. The Hon'ble ITAT in the preceding year on the basis of same agreement had allowed the expenditure of Rs.10,30,500/- which was for the period from January, 2006 to March, 2006. The relevant para of Tribunal from Ld CIT(A)'s order is extracted as below:- "It is not in dispute that the assessee had entered into an agreement on 3rd day of January, 2006 with M/s Derpol Investment Ltd. under which M/s DERPOL had to provide technical advisory services and assistance for the designing and development of the software product of the assessee company. The lump sum consideration for a period of one year was fixed at Rs.41,22,000/-. The agreement was to be enforced for a period of 12 months unless terminated earlier in accordance with the provisions contained in the agreement. It is nobody's case that the agreement was terminated at a time earlier than the expiry of 12 months from the date of the agreement. It is also not in dispute that the assessee availed the technical advisory services and assistance from M/s DERPOL since the month of January 2006. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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