9911796707
TMI Blog2022 (9) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... . The facts in brief are the assessee company is engaged in the business of sale, distribution and trading of various telecommunication products including mobile handsets, data cards and Sjmart phones on a whole-sale cash and carry basis to various distributors throughout India and also providing investment consultancy services to group companies holding of investment in Group of Companies for retaining a controlling stake on them. 2.1 The appellant company has filed its revised return of income on 27.02.2017 declaring an income of Rs. 1,83,34,700/- vide acknowledgement no. 636785111270217 for the Assessment Year 2015-16. The case was selected for "Limited Scrutiny under CASS" as per Notice dated 06th April 2016 on the basis of following reasons : -High ratio of refund to TDS -Substantial increase in share capital in a year - Large international transactions The assessment under section 143(3) of the Act was concluded by the Ld. Assessing officer, Circle-12(2), new Delhi on 22.12.2018 at total income of Rs. 4,01,51,080. Aggrieved against the aforesaid order of the learned Assessing Officer, the assessee preferred appeal. An addition of Rs. 2,18,16,379/- was made on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove that the expenses claimed were pertaining to relevant A.Y. 2015-16 and wholly and exclusively for the purpose of business carried out by the assessee. (2) Whether the CIT(A) has erred in deleting the addition of Rs. 1,42,90,200/- which was made by the AO by disallowing Business Promotion expenses without recognizing that the assessee has nto filed any supporting evidence to prove that the expenses claimed were pertaining to relevant A.Y. 2015-16 and wholly and exclusively for the purpose of business carried out by the assessee. (3) The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of hearing." 4. Heard and perused the record. The Assessee's appeal is taken up first for discussion. On behalf of the assessee in regard to it's appeal it was submitted that the assessee's case was selected for limited scrutiny under 'CASS' and without mandatory approval for expanding the scope converted the case to complete scrutiny. It was submitted that there was no ground of scrutiny to examine the professional expenses but Ld. AO travelled beyond the scope of limited scrutiny and tried to cover it under the head "High ratio of refund to T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded under the head of "High ratio of refund" to TDS. However, no reason was cited as to how the TDS credit shown in the return has impact on the expenditure and would affect the refund of assessee. Thus, the Bench is of considered opinion that, the very exercise of jurisdiction to examine the disputed expenses under limited scrutiny on ground of 'High ratio of refund to TDS', was vitiated and that made all the additions illegal. Ground deserves to be allowed. In regard to ground no. 2 and 3 in assessee's appeal : 6. It can be observed that the ld. CIT(A) has sustained the addition by observing that the relevant documents in the form of invoices were not presented during the assessment proceedings. The Bench is of considered opinion that if that was so then the Ld. CIT(A) had wide powers u/s 250(4) of the Act to call for comments of the AO or make an enquiry himself, as assessee was pressing that it had filed all the document/evidences during assessment. In fact, the assessment order shows that Ld. AO had taken note of the fact that the payment was being made as a fee for assistance in connection with seeking clarification from RBI on applicability of CIC Guidelines and applicabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no revenue was recognized. In regard to addition of Rs. 57,19,037/- which was made by the AO by disallowing Legal & Professional expenses the assessee has placed on record in the form of copies of invoices at page no. 34-34A of paper book, copy of engagement agreement at page no. 46- 56 in regard to professional services choosing Ernst & Young LLP similarly with regard to advisory services from M/s. J. Sagar Associates invoices at page no. 35-36 and 37 of the paper book have been placed on record. In regard to services M/s. KPMG India Pvt. Ltd. invoice at page no. 38 -39 of paper book have been placed on record. 10. Ld. CIT(A), however, has considered them. These invoices are not doubted in terms of expenditure, the reason for disallowance was that Ld.AO found the same not expended wholly and exclusively for the purpose of business carried out by the assessee. It appears that foundation to this observation was that he found that expenses were debited for project which were not earning revenue. This fact was, however, controverted by the assessee as assessee claims to have engaged in online gaming activities and at page no. 44-45 the copies of invoices have been placed on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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