9911796707
TMI Blog2013 (12) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceeding only filed details with numeric figures and the genuineness of the said expenditure could not be ascertained from the said details and the AO had judiciously allowed the expenditure at the percentage of course execution charges claimed in the preceding assessment year" 2. On the facts and in the circumstances of the case as well as in law, the ld. CIT(A) erred in accepting the submissions made by the assessee as also the details submitted by the assessee in respect of the disallowance of course execution charges of Rs.16,54,681/- in contravention of the provisions of Rule 46A of the Income Tax Rules, 1962; 3. On the facts and in the circumstances of the case as well as in law, the learned CIT(A) erred in deleting the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot point out how the additional evidence considered by the ld. CIT(A) is in contravention of Rule 46A of the Rules. However, the ld. DR relied on the order of AO and whereas the ld. AR relied on the order of ld. CIT(A). We observe that the ld. CIT(A) has stated that in para 11 of the Assessment Order, the Assessing Officer has discussed this issue as under : "9.1 It is seen from the return of income that assessee has claimed expenses of Rs.1,60,66,688/- in respect of course execution charges. The assessee was asked to justify its claim. From the details filed in this respect, it may be seen that no name and addresses of the persons to whom execution charges are paid are furnished. Assessee has only filed the details stating numerical figur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciated or disregarded through oversight. The fact of the matter is that the assessee company collects testing fees from students and remits them to the US company. The accounts of the company are audited both under the companies Act, 1956 and also under the Income Tax Act, 1961. This item appears as a separate item of expenditure in the schedule to the profit and loss accounts. We submit that the claim therefore deserves to be allowed in entirety" 5. Ld. CIT(A) after considering the facts of the case has deleted the said disallowance vide para 9.3 of the impugned order which reads as under : "9.3 I have considered the facts of the case. The AO has not doubted the genuineness of expenditure, but he had restricted the claim on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the franchisee management fee on the ground that no details of agreement entered were filed by the assessee before AO and the ld. CIT(A) considered the additional evidence in contravention of provisions of Rule 46A of the Income Tax Rules, 1962. 8. At the time of hearing, the ld. DR relied on the order of AO and whereas, ld. AR relied on the order of ld. CIT(A). We observe that the assessee paid franchisee management fee of Rs.3,06,11,682/-. The assessee explained, during the assessment proceedings, that it was having about 155 franchisees all over India including operation, sylvan and ITES divisions. The assessee offered the franchisee commission ranging between 50 to 75% on sale. The assessee had booked the revenue of franch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also submitted that the AO compared the fee of Rs.5.08 crores with the aggregate revenue which was 15.32 crores. It was contended that in the previous year relevant to the assessment year under consideration he compared the franchisee management fee with only franchisee operation sales and thereby arrived at 61%. If there was to be comparison in both the years nominator and denominator will have to be the same. The assessee also filed the computation in respect of assessment years 2001-02 and 2002-03 which have been stated by ld. CIT(A) at page 15 of the impugned order as under : AY 2002-03 AY 2001-02 Rs. Course fees Ghatkopar sales 1,81,57,048 2,42,82,483 Course fees Delhi 19,86,308 - Course fees Delhi Sylvan 3,17,360 - Franch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations have already been explained in earlier paras. The appellant was operating its business activity through more than 150 franchisees in Mumbai and all over India. Thus, the major source of revenue was the sales proceeds received from the franchisees. In turn, the appellant was paying management fee to the franchisees from year to year and the said payment has been accepted as appellant's business expenses. In the year under consideration also the AO did not doubted the genuineness of such payment of management fee to the franchisees. However, the AO made disallowance of Rs.9,65,300/- on the basis of comparison made with the receipts and payments of immediately previous assessment year 2001-02 only. However, the appellant in the above pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
