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TMI Blog2015 (7) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had not discharged the burden cast on it by furnishing the details like the business visa, at whose invitation the business trip was held, proof of any meetings abroad and the details alike. In that view of the matter, the order of assessing Officer as affirmed by the lower appellate authorities cannot be found fault with. - Decided against the assessee. Disallowance of technical support charges - Undisputedly, assessee did not place any material to show as to the actual implementation of the contract and the report which the consultant HMAS had to furnish to the assessee and as such, in the absence of any commercial expediency of incurring such expenditure, the disallowance was sustained by both the appellate authorities. It cannot be gainsaid by the assessee that even in the absence of any evidence, the claim ought to have been allowed. The mere existence of a technical agreement with HMAS was not sufficient and there being no business activity in the year under consideration, the burden was on the assessee to prove the business expediency to claim expenditure. - Decided against the assessee. Disallowance of professional charges - The Tribunal has rightly noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional charges and other expenses in connection with sale of M/s.Diebold HMA P. Ltd., shares and especially when the assessee had no other business income during the current assessment year? (iii) Whether the sum of ₹ 24,93,800/- paid to M/s.Amarchand Mangaldas towards legal charges in respect of sale of M/s.Diebold HMA P. Ltd., shares is liable to be deducted from the sale value when computing capital gains tax when the actual payment accrued and was paid in the earlier assessment year 2003-04 and allowing the claim during the current assessment year would distort the profits of the current year? 2. ITA 684/2009: (i) Whether the Tribunal was justified in law in holding that the appellant is not entitled to the deduction on account of technical support charges on the facts and circumstance of the case? (ii) Whether the Tribunal was justified in law disallowing the expenditure relating to Travel by the executive for the purpose of business on the facts and circumstance of the case? (iii) Whether the Tribunal was justified in holding that accrual of income is the precondition for allowing expenditure on the facts and circumstances of the case? 3. Facts in br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground that there was no business activity justifying their foreign travel for business purposes. A sum of ₹ 94,74,184/- claimed by the appellant as Rs.technical support charges paid towards promotion of products and services in North America was also disallowed on the ground that the agreement relating to this activity had not been put into practice which came to be affirmed by CIT (A) and Tribunal. 4. Thus, revenue being aggrieved by the order of the Tribunal which affirmed the finding of CIT(A) insofar as treating the receipt of the amount by the assessee insofar as sale of shares as 'capital asset and allowance of the legal fee paid by the assessee as professional fee to be allowed while computing the long term capital gains as claimed by the assessee which finding has been affirmed by the Tribunal has been questioned by the revenue in ITA No.700/2009. The assessee being aggrieved by the finding of the assessing officer who disallowed the expenditure relating to foreign travel by the Managing Director and his wife and disallowing the amount paid by the assessee as 'technical support charges to professionals on the ground that such activity had not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pray for dismissal of the appeal filed by the revenue. 8. RE: FINDING ON SUBSTANTIAL QUESTION OF LAW NO.(1) FORMULATED IN ITA NO.700/2009. At the cost of repetition, it is noticed that assessee had purchased 50,000/- shares of M/s.Diebold HMA Private Limited during the year 1992-93 and sold the same during the previous year relevant to the assessment year 2004-05 for a total consideration of ₹ 21,55,47,800/- and declared a long term capital gain of ₹ 20,51,66,634/- in its return of income. The assessing Officer denied the benefit of long term capital gains and held that it should be treated as 'income from business . The CIT(A) has noticed that the balance sheet along with its enclosures of the earlier 2-3 years, assessee has been showing the value of the shares of Diebold HMA Private Limited at ₹ 50,00,000/- and has never claimed diminution. It is also noticed by the CIT (A) that claim for diminution/increase in valuation in respect of other shares had not been allowed by the assessing Officer and the assessee had accepted the same. It has been held that observation made by the assessing Officer to the effect assessee has been in the business of purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee made payment of $1,00,000 on 14.07.2003 and $1,06,000 on 02.12.2003 based on an agreement dated 01.07.2003 contending interalia that such payment was made as per Clause (6) of the agreement and the recipient namely, HMAS was required to render professional services in the form of furnishing market input and other issues as detailed in the contract. Undisputedly, assessee did not place any material to show as to the actual implementation of the contract and the report which the consultant HMAS had to furnish to the assessee and as such, in the absence of any commercial expediency of incurring such expenditure, the disallowance was sustained by both the appellate authorities. It cannot be gainsaid by the assessee that even in the absence of any evidence, the claim ought to have been allowed. The mere existence of a technical agreement with HMAS was not sufficient and there being no business activity in the year under consideration, the burden was on the assessee to prove the business expediency to claim expenditure. Hence, all the authorities were justified in disallowing the claim or holding that the assessee is not entitled to the deduction. Accordingly, the questions o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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