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TMI Blog2020 (11) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... n best practices and the importance of collaboration and trade cooperation, especially during these times of economic recession. The assessee is working closely with the Indian Government to represent the true potential of Indian IT Industry for increasing the Indian market share in Information and Communication Technology (ICT) and helping to ensure that the Governments of other nations do not create impediments to free trade or barrier-free business exchanges. GTD expenditure incurred for the above purpose primarily consisted of Consulting fees paid to various international firms in respect of their strategic and tactical planning for positioning IT industry of India vis-a-vis the foreign country s economic outlook, Expenditure on global ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ['CIT(A)'] erred on facts and in law not deleting the disallowance of Global Trade Development expenses (GTD expenses), to the extent of Rs.2,08,08,291/- made in the assessment order on the ground that the said expenses were not incurred in accordance with the aims and objectives of the appellant society, failing to appreciate the contemporaneous evidences filed on record substantiating the business nexus of said expenditure." 3. The assessee is a society registered under the Societies Registration Act, 1860, a not for profit organization, engaged in activities that are aimed at advancement, promotion of the information technology and software industry. The assessee is registered under section 12A of the Income-tax Act, 1961 as a charit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses were necessitated for pursuing its aims and objects. In view of this expenses of Rs.4,13,45,917/- incurred on account of GTD activities (inclusive of grant of Rs.2,05,37,626/- received from Ministry of Communication & Information Technology) are disallowed for the reason not being incurred for the purposes objects of the assessee." 5. The ld. CIT(A) upheld the partial disallowance reducing the disallowance from Rs.4,13,45,917/- to Rs.2,08,08,291/- on the grounds that the donations given by the Government of India for GTD expenses ought not be disallowed. The relevant part of the order of the ld. CIT (A) is as under: "4.4.3. The appellant had submitted that the GTD expenses of similar nature has been consistently incurred by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given any reason for the reduction of the partial expenses nor for sustaining the remaining amount. 8. On the other hand, the ld. DR argued that the principles of res judicata are not applicable to the Income Tax proceedings and every assessment has to be examined independently. She argued that the expenses are not for the purpose of business. 9. Heard the arguments of both the parties and perused the material available on record. 10. We have gone through the objectives of the assessee company with regard to GTD expenses. Global Trade Development Activity is an ongoing program primarily for strengthening the "India" brand, to put and maintain the status of the India IT-BPO industry on the map of the world, by strengthening its credential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture in public relations/ public awareness and (iv) Travelling expenses. 12. Further, we also find that the similar expenses has been allowed by the Co-ordinate Bench of ITAT for the assessment year 2010-11 in ITA No. 3187/Del/2015, order dated 17.05.2019 wherein it was held that the disallowance of GTD expenses are not sustainable on the grounds that the purpose of such expenditure and the benefits derivable there from is aimed at benefitting L.C.T & Business Process Management (BPM) industry as a whole, which not denotes the member fraternity of the assessee, but also the industry at large in India. The monetary and in principal support to GTD activity by Government of India clearly establish the utility of such expenses for the India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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