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TMI Blog2019 (6) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company is in the form of reimbursement and not the payment to the outside party in excess of 20000. From the records it can be seen that no single expenditure incurred by Mr. P. Bala Krishnan is in excess of 20000/-. All these facts were taken into consideration by the CIT(A) and has rightly given the findings by deleting the disallowance. Addition of legal and professional charges for compliance - ignoring the fact that separate auditing fees has been paid - HELD THAT:- The assessee had duly furnished supporting evidences in the form of ledger, confirmation from other part, etc. Payments were made vide banking channel. TDS was duly deducted on the said payments. The said receipts were made part of its income by the other company. All these facts and evidences were not controverted by the Assessing Officer in the remand report. The assessee also clarified before the Revenue that the services received from such party were not on account of auditing but on account of monthly accounting services and Annual Compliance Services to take care of statutory functions as mentioned in the order of the CIT(A). Thus, there is no need to interfere with the findings of the CIT(A). Addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of ₹ 11,03,000/- made on account of legal and professional charges ignoring the fact that separate auditing fees has been paid by the assessee company. 4. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs.l6,00,000/- made on account of legal and professional charges ignoring the fact that there is no written agreement with the sister concern from whom the company takes services. 5. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of ₹ 13,41,982/- made on account of office expenses ignoring the fact that the same are not used wholly and exclusively for the purpose of the company. 6. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of ₹ 38,91,474/- made on account of travelling and conveyance expenses ignoring the fact that the same is used by the director for his personal purposes. 7. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 13,41,982/- made on account of office expenses, the Ld. DR submitted that the same are not used wholly and exclusively for the purpose of business of the company. As regards to Ground No. 6 relating to addition of ₹ 38,91,474/- made on account of travelling and conveyance expenses, the Ld. DR submitted that the CIT(A) ignored the fact that the same is used by the director for his personal purposes. As regards to Ground No. 7 relating to addition of ₹ 3,07,102/- made on account of repair and maintenance expenses, the Ld. DR submitted that the CIT(A) ignored the fact that the same were not used by the assessee company for its business activity. 6. The Ld. AR submitted that all these additions were made by the Assessing Officer on ad-hoc basis and CIT(A) has rightly deleted these additions. 7. We have heard both the parties and perused all the relevant material available on record. As regards to Ground No. 1, the CIT(A) held as under: "13.3 I have gone through the assessment order, written submissions, paper book and remand report of the AO. The appellant has claimed expenditure of ₹ 26,40,292/- under the head business promotion in support of which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition made on estimate and hypothetical grounds without any concrete material or evidence cannot be sustained. Thus, the CIT(A) has rightly deleted this addition with the proper findings. There is no need to interfere with the same. Ground No. 1 of the Revenue's appeal is dismissed. 8. As regards to Ground No. 2, the CIT(A) held as under: "14.3 I have gone through the assessment order, written submissions, paper book and remand report of the AO. The AO held that the appellant had incurred the expenditure of ₹ 5,75,916/- in contravention of provisions of Section 40(3) of the Act and the same was disallowed accordingly. In this regard, contention of the appellant is that the amount reflected in the assessment order is the amount of expenditure against which various cash payments have been made and no single payment made is exceeding ₹ 20000/-. Further the payments made to Shri P Balakrishnan were on account of reimbursements made b to various employees of the company and no single payment exceeds ₹ 20,000/-. The submission of the appellant on this issue was also forwarded to the AO. The remand report of the AO is silent on this issue and submission made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the relevant financial year by M/s AARMP & Co. and payment for the same has been received through banking channel only. It has been noted that the tax at source has been deducted @10% under section 194J on account of professional services. The submission of the appellant on this issue was also forwarded to the AO. The remand report of the AO is silent on this issue and submission made by the appellant in this regard. He has not controverted above facts. Since, these expenses have been incurred wholly of the purpose of the company, the same is an allowable expenditure under section 37(1) of act. The AO is directed to delete the disallowance of ₹ 11,03,000/-." The assessee had duly furnished supporting evidences in the form of ledger, confirmation from other part, etc. Payments were made vide banking channel. TDS was duly deducted on the said payments. The said receipts were made part of its income by the other company. All these facts and evidences were not controverted by the Assessing Officer in the remand report. The assessee also clarified before the Revenue that the services received from such party were not on account of auditing but on account of monthly accounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 16,00,000/-." At the time of assessment proceedings, the assessee filed detailed reply wherein detailed description of services performed by the said parties has been provided by the assessee. From the records it can be seen that M/s Grintex Research Advanced Technologies Pvt. Ltd. has provided services to the company for identifying foreign universities and Research institutions with whom the company could potentially collaborate with regards to Research and Development for projects related to user applications development in the domain of defence, homeland security, aviation and space and augment its technology expertise to meet customer needs indigenously through local manufacturing. M/s ND Satcom Grintex Communication Ltd. has provided services to the company related to proposals which include satellite communication component for the projects the company proposes to take up with the Indian Navy, Air Force, Army DSA, ISRO and with system integrators such as BEL, ECIL, Tata, HCL, L&T etc. The parties have confirmed that the services were rendered and responded to notice u/s 131 of the Act. Therefore, the CIT(A) has rightly deleted this addition. There is no need to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. It has been contended by the appellant that the expenses has been incurred on the travel of the employees of the company only for the purpose of its business. The payments made by Mr. Hari Hharan Gautam are not personal in nature. The same were on behalf of the company as he is the signing authority of the company. The appellant has submitted copy of bills and vouchers maintained in respect of said expenses under Rule 46A as additional evidences. The same were admitted and sent to the AO for his verification and report. In the remand report the AO stated to have verified these documentary evidences. He has stated that the claim of the appellant seems to be genuine. Since, these expenses have been incurred wholly of the purposes of the company; the same is an allowable expenditure under section 37(1) of act. The AO is directed to delete the disallowance of ₹ 38,91,474/-." In the remand report itself, the Assessing Officer remarked that "I have examined the bills and vouchers of the assessee company which seems to be genuine. …." Thus, the Assessing Officer has not disputed the genuineness of the evidences produced before the CIT(A). Therefore, after going throu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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