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TMI Blog2016 (3) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... t Cost" instead of "Personal Recruitment Cost" meaning - employee recruitment expense. The expenses were primarily paid to two consultants for the purpose of recruiting personnel 5. For the Ld. CIT erred in confirming the inter company loan to Thiess mines amounting to Rs. 42,79,700/- when the said amount is not intercompany loan but security deposit lying with M/s RDB Two Thousand Plus Limited Kolkata for occupation of office premises since 24th June, 2007. 6. For the Ld. CIT erred in confirming non availability of MAT calculation even if Book Profit of Rs. 23,41,956/- when the assessee company has bought forward business loss and unabsorbed depreciation. The lower of the two as per clause iii of explanting 1 to 115JB (2) is Rs. 108.39 lacs which is much higher than the stated book profit. 7. For the Ld. CIT erred in attraction of section 40A(2)(b) for huge remuneration amounting to Rs. 124.12 lacs paid to key management personnel when an amount was paid to senior mining professionals and other full time employees of the Company having sound business knowledge and profound experience in the field and having no shareholding in the company. The salary paid is considered rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess loss as well as unabsorbed depreciation. The lower of the two as per clause iii of Explanation 1 to 115JB (2) is Rs. 108.39 lacs which is much higher that the stated book profit. Therefore the provisions for MAT do not apply in the instant case. 4) Remuneration paid to Key managerial Personnel (KMP)-Rs.124.12 lacs. It is submitted that specified KMP are Mr. Christian Fosterling and Dr. Raman Srikant. Assessee-company is in the business of undertaking Mining contract Both the persons are senior mining professionals and employees of the company. Mr. Christian Fosterling is an internationally expert engineer from Australia and is having more than 25 years of experience. He is also County manager of the Company during the said period. Dr. Raman Srikanth is a mining engineer from Indian school of Mining (ISM), M.S. in Mining Engineering and dual PHD in Mining Engineering and Operations Research from the Pennsylvania State University, USA with 20 years' experience. He was earlier employed in Tata Steel as General Manager. He is the CEO of the company and Country head of Thiess. It is contended that an employer fixing the remuneration is entitled to consider the extent of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on behalf of Revenue. 4. We have heard rival contentions of both the parties and have also gone through the materials available on record. Before us the ld. AR has submitted a paper book which is running pages 1 to 69 and contended that the AO has made detailed enquiry for the above stated expenses at the time of assessment proceedings u/s. 143(3) of the Act. Regarding the personnel recruitment expenses, Ld. AR drew our attention at pages No. 36 to 39 of the paper book where the invoice of ABC Consultants Pvt. Ltd. was placed which was also produced before the AO. Our attention was drawn to page No. 42 of the paper book where the invoice of INFO EDGE (India) Ltd. was placed. Ld. AR further submitted that a notice was issued to M/s ABC Consultants Pvt. Ltd. u/s. 133(6) of the Act for the confirmation. In this connection, Ld. AR submitted the address vide letter dated 07.02.2014, which is placed on page No. 58 of the paper book. The reply of ABC Consultants Pvt. Ltd. to the ITO is placed on at page 68 of the paper book. Regarding the issue of inter-company loan, to M/s Thiess Mines for Rs. 42,79,700/-, Ld. AR drew our attention at page No.41 of the paper book, where the detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o give an opportunity of hearing in this respect to the assessee; and 4) He has to make or cause to make such enquiry as he deems necessary; 5) He may pass such order thereon as the circumstances of the case justify including, (i) An order enhancing or, (ii) Modifying the assessment or (iii) Cancelling the assessment and directing a fresh assessment. 6.2 Now in the light of above words, we have to examine as to whether the order of the ld. CIT is a valid order in the light of the above stated points/ provisions of section 263 of the Act. In the case in hand, we find from the submissions of the assessee that sufficient enquiries have been made by AO at the time of assessment u/s 143(3) of the Act. Therefore to hold the order of Ld. CIT is erroneous and prejudicial to the interest of revenue on the ground that the AO failed to make necessary enquiry at the time of assessment stage does not hold any merit. We find that when necessary enquiries have been made by AO at the time of assessment then it is inappropriate to hold the order erroneous and prejudicial to the interest to revenue. We also find that the Hon'ble courts have quashed the proceedings u/s/. 263 of the Act wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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