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TMI Blog2011 (3) TMI 1615X X X X Extracts X X X X X X X X Extracts X X X X ..... e of 10% made by the Assessing Officer out of commission and brokerage expenses thus was not sustainable and the learned CIT(A) was fully justified in deleting the said disallowance. The impugned order of the learned CIT(A) is upheld on this issue. Disallowance of professional fees Whether Ld. CIT(A) erred in deleting the disallowance of professional fees expenses made by the A.O? - HELD THAT:- It is observed that complete details of the payments made by the assessee on account of professional fees amounting to ₹ 8,90,000/- were furnished by the assessee along with invoices and receipts issued by the concerned payees as found by the learned CIT(A) from the relevant assessment records. As further found by the learned CIT(A), there was no discrepancy whatsoever, which was pointed out by the Assessing Officer in the said details and evidences filed by the assessee in support of its claim for professional fees of ₹ 8,900,000/- paid to two parties - the learned Departmental Representative has not been able to rebut/controvert these findings of fact recorded by the learned CIT(A) and this being so, there are found no justifiable reason to interfere with the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od. As rightly pointed out by the learned Departmental Representative in this regard, the Learned CIT(A) has not given any basis to show that the disallowance sustained by him to the extent of 3% of the dividend income is reasonable - the impugned order on this issue is set aside - matter restored to the file of the Assessing Officer with direction to decide the same afresh in the light of the decision of the Hon ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. The appeal of the revenue is treated as partly allowed for statistical purposes. - I.T.A.No. 395/Mum/2009 - - - Dated:- 18-3-2011 - Shri P.M. Jagtap, AM and Shri N.V. Vasudevan, JM For the Appellant : Shri D. Songate For the Respondent : Shri Mahender Singh Dagar O R D E R PER P.M. JAGTAP, AM : This appeal is preferred by the Revenue against the order of the learned Commissioner of Income-tax (Appeals)-I, Mumbai, dated 10.10.2008, and the grievance of the revenue is projected in the following grounds raised therein : 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of brokerage and commission expenses of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assessing Officer out of commission and brokerage was liable to be deleted being without any basis. 4. After considering the rival submissions and perusing the material on record, we find no infirmity in the impugned order of the learned CIT(A) deleting the ad hoc disallowance of 10% made by the Assessing Officer out of commission and brokerage expenses claimed by the assessee. If the nature of the business of the assessee is taken into consideration, there was no reason to doubt the genuineness of the expenses incurred by the assessee on payment of brokerage and commission. As a matter of fact, even the Assessing Officer did not dispute this position and allowed 90% of the brokerage and commission expenses claimed by the assessee. He, however, disallowed the balance 10% of the expenses on the ground that complete details thereof were not furnished by the assessee. As rightly contended on behalf of the assessee before the learned CIT(A) as well as before us, there is nothing in the order of the Assessing Officer to show as to what details and documents were exactly called for by him, which the assessee failed to furnish. There is also nothing brought on by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found by the learned CIT(A) from the relevant assessment records. As further found by the learned CIT(A), there was no discrepancy whatsoever, which was pointed out by the Assessing Officer in the said details and evidences filed by the assessee in support of its claim for professional fees of ₹ 8,900,000/- paid to two parties. At the time of hearing before us, the learned Departmental Representative has not been able to rebut/controvert these findings of fact recorded by the learned CIT(A) and this being so, we find no justifiable reason to interfere with the impugned order of the learned CIT(A) deleting the disallowance made by the Assessing Officer out of professional fees holding that the same was not well founded. Ground No. 2 of the Revenue s appeal is accordingly dismissed. 7. As regards the issue raised in ground No. 3, it is observed that a sum of ₹ 8,00,000/- was claimed by the assessee on account of loss on auction bidding. In support of the said claim, it was submitted on behalf of the assessee before the Assessing Officer that it was planning to do property related business and accordingly bided for the purchase of property in auction. It was submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r loss on auction bidding and since neither the Assessing Officer nor the Learned CIT(A) has gone into this aspect, we restore this issue to the file of the Assessing Officer for deciding the same afresh after verifying this relevant aspect. Ground No. 3 of the Revenue s appeal is accordingly treated as allowed. 9. As regards the issue raised in ground No. 4 relating to the disallowance under section 14A, it is observed that dividend income of ₹ 1,48,96,982/- earned by the assessee in the year under consideration was claimed to be exempt u/s.10(33). According to the Assessing Officer, the expenditure incurred by the assessee to the extent attributable to earning of the said exempt income was liable to be disallowed u/s.14A. He, therefore, worked out the quantum of such expenses attributable to the earning of dividend income on pro rata basis at ₹ 45,93,047/- and disallowed the same. Before the learned CIT(A), it was submitted on behalf of the assessee company that the expenses incurred by it were ,mainly administrative in nature and the same having been incurred for the day-today activities of the of the business of the assessee, there was no nexus between the said e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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