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TMI Blog2021 (7) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the assessee has paid the said amount to the lessor pursuant to the terms of agreement after due compliances and claimed the deduction of the same during the year. The lessor is unrelated party to the assessee. The agreements between the two parties have not been held to be non-genuine and it is also not the case that the expenditure was not incurred wholly and exclusively for the purpose of assessee's business. This being so, in our considered opinion, it is not open for revenue authority to sit on the armchair of a businessman so as to ascertain the quantum of deduction allowable to the assessee, Another pertinent fact is that while framing assessment for AY 2013-14 (which is the first year of payment of rent), the lease rent p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide another opportunity to the assessee to substantiate its claim before lower authorities. Therefore, the matter of this disallowance stand remitted back to the file of Ld. AO for fresh adjudication. - I.T.A. No. 7940/Mum/2019 - - - Dated:- 28-6-2021 - Mahavir Singh , Vice President And Manoj Kumar Aggarwal , Member ( A ) For the Appellant : Gaurav Bansal , LD. AR For the Respondents : Bharat Andhale , Ld. Sr. DR ORDER Manoj Kumar Aggarwal , Member ( A ) Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of the order of learned Commissioner of Income-Tax (Appeals)-48, Mumbai [CIT(A)], dated 31/10/2019 in the matter of assessment framed by Ld. Assessing Officer (AO) u/s. 143(3) on 22/12/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were provided. As evident, the assessee is aggrieved by confirmation of disallowance of rental expenses and disallowance of professional fees. 2. Having heard rival submissions and after going through material on record, our adjudication to the appeal would be as under. 3. The assessee being resident corporate assessee stated to be engaged in manufacturing activities was assessed for the year under consideration in scrutiny assessment u/s. 143(3) on 22/12/2017. 4. Disallowance of Rent 4.1. It transpired that the assessee paid rent of ₹ 120.19 Lacs to an entity namely M/s. OPC Asset Solutions Private Limited. The payment was in the nature of lease rent for office furniture etc. Upon perusal of relevant agreements, Ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. 4.3. Upon careful consideration of material fact, we find that the assessee has taken on lease office equipment, furniture fixtures for a period of 5 years pursuant to certain agreements between the assessee and M/s. OPC Asset Solutions Private Ltd. As per the terms of agreements, the assessee is required to pay yearly lease rent of ₹ 120.19 Lacs for a period of first three years. Thereafter, it is required to pay yearly lease rent of ₹ 16/- for the remaining two years. Undisputedly, the assessee has paid the said amount to the lessor pursuant to the terms of agreement after due compliances and claimed the deduction of the same during the year. The lessor is unrelated party to the assessee. The agreements between the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sory and to assist the assessee to maintain and develop corporate relations with existing and potential clients. Smt. Namrata Goel was stated to be Masters in Management Studies whereas Mrs. Nidhi Goel was stated to be Bachelor in Mass Media. However, Ld. AO opined that the assessee did not furnish any evidence showing the nature of services rendered by each of them which has resulted into an increase in business of assessee. Both these employees were wives of the directors of Assessee Company and the transactions were nothing but accommodation entries for claiming expenses. Moreover similar disallowance was confirmed by Ld. DRP in AY 2013-14. Finally, the aggregate payment of ₹ 11.88 Lacs was disallowed and added to the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the employees was purely a commercial decision keeping in mind the benefit of the business as a whole as it would be very important that the family persons should be employed in the own family business to control the management, operations, staff etc. so that there should not be any difficulty in running the business. The lower authorities, without questioning the appointment letter of both the persons, questioned the genuineness of the transaction. 5.4. After due consideration of submissions made before us and keeping in mind the principle of natural justice, the bench deem it fit to provide another opportunity to the assessee to substantiate its claim before lower authorities. Therefore, the matter of this disallowance stand remitted b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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