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TMI Blog2019 (1) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. On the contrary, except for mere suspicion allegation, nothing was brought on record by Ld. AO to counter the assessee s claim. It is beyond doubt that the assessee was acting as co-lead manager in the aforesaid issues but the allegations of Ld.AO that the fee was received in that capacity through MLINT is without any corroborative evidences. Therefore, the conclusion of Ld. CIT(A) could not be faulted with and hence concurring with the same, we dismiss the appeal filed by the revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... would be as given in succeeding paragraphs. 4.1 Facts on record would reveal that the assessee being resident corporate assessee stated to be engaged in providing financial consultancy and allied services was subjected to reassessment proceedings for year under consideration u/s 143(3) r.w.s.147 of the Act, on 28/03/2003 wherein the eligible amount u/s 80-O was reduced to ₹ 375.65 Lacs as against ₹ 772.51 Lacs stated to be determined in an assessment framed u/s 143(3) on 30/03/1998. 4.2 The assessee had claimed deduction u/s 80-O for ₹ 382.57 Lacs, being 50% of fees received from 5 entities. The manner as well as computation of deduction claimed has already been extracted in para-2 of the reassessment order under consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee acted as co-lead manager and received fees from MLINT: - No. Name Amount (Rs.) 1. East India Hotels 104.38 Lacs 2. JCT Ltd 115.93 Lacs 3. Raymond Woolen Mills 176.55 Lacs Total 396.86 Lacs The assessee defended the claim by relying upon agreement dated 23/03/1993 between the assessee and MLINT. It was submitted that as per the terms of the agreement, the fees were received for services rendered and not towards underwriting commission as alleged. It was also submitted that in terms of FERA Regulations, the assessee could not have purchased any shares without the prior approval of Reserve Bank of India (RBI) which was evidenced by RBI approval letter dated 02/11/1994 which specifically provided that there would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agreement dated 27/03/1995 entered into by Merrill Lynch Group entities, the assessee could provide as well as avail services in respect of new issue transactions and derivative instrument transactions. 4.6 In the above background, it was noted that the assessee could not lead any evidences of rendering of services. No correspondences could be filed by the assessee. Therefore, the fact that the transactions were between persons who were closely linked with each other and the option clause was a colorable device. The agreement dated 23/03/1993 (wrongly referred to as dated 31/03/1993 in the reassessment order) was merely a letter written by MLINT to assessee which mentioned rendering of general services rather than specific services. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase the shares in his capacity as lead manager. Further this fact was also confirmed by Merrill Lynch that amounts which have been paid to the assessee are in consideration of the services rendered by the assessee to Merrill Lynch in terms of agreement dated 23.3.1993. Further there is no evidence on record to show that the amounts have been received by assessee in his capacity as co-lead manager. The working filed by the assessee show that assessee has been in receipt of fee in terms of agreement with Merrill Lynch as per agreement dated 23.3.1993. From the evidence furnished by assessee, it is clear that assessee has not received any amount from Merrill Lynch in his capacity as co-lead manager but only in consideration of the services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the considered opinion that no addition would be sustainable in law merely on the basis of suspicion, conjectures or surmises. The assessee had placed on record sufficient documentary evidences to substantiate its claim u/s 80-O with respect to services rendered to MLINT. The claim was duly supported by the confirmatory letter of MLINT as well as RBI approval letter which specifically prohibited devolvement of foreign exchange to the assessee. On the contrary, except for mere suspicion & allegation, nothing was brought on record by Ld. AO to counter the assessee's claim. It is beyond doubt that the assessee was acting as co-lead manager in the aforesaid issues but the allegations of Ld.AO that the fee was received in that capacity throu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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