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TMI Blog2024 (5) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of payment of professional fees for the business and nature of professional services rendered by the said person. Accordingly, this issue is remanded back to the ld. AO. Disallowance u/s. 40(a)(ia) - Payment of subscription fee - Non-deduction of TDS - HELD THAT:- Disallowance as concerned, from the perusal of the invoice, it is seen that the same is for the purpose of renewal of some annual subscription. Since this document was not before the AO and CIT (A), accordingly, this issue is also restored back to the file of the AO and if it is in the nature of subscription fee, then no TDS is required to be deducted. Appeal of the assessee is allowed for statistical purposes. - Shri Amit Shukla, Judicial Member And Smt Renu Jauhri, Accountant Member For the Assessee : Shri Govind Javeri For the Revenue : Shri H.M. Bhatt ORDER PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 30/11/2023, passed by NFAC, Delhi for the quantum of assessment passed u/s. 143(3) for the A.Y. 2021-22. 2. Before us following effective grounds have been raised:- 1. The learned CIT (A) has erred in law and on facts in upholding the disallowance of Rs. 45, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance made by the AO is unlawful and unwarranted. The appellant attempted to file the details called for on IT portal but it was unable to upload the same. Hence the CA vide its email dated 22.12.2022 at 6:43 pm had filed PAN Card copy, Ledger account, Bank statement highlighting payment of Dr Abhishek Shukla and covering letter through email addressed to [email protected] and to JAO at [email protected]. Copy of the same as proof is enclosed herewith. On perusal of the covering letter, it can be seen that copy of ITR was requested to Dr. Abhishek Shukla but it was not received. Hence, request was made to the A.O. to exercise the powers vested in him and procure such personal details. On perusal of the details submitted, it can be seen that the Appellant has deducted tax at source in respect of fees paid to Dr. Abhishek Shukla and the payment is made through regular banking channel. Therefore, no disallowance can be made in the hands of the Appellant by invoking provisions of section 40 of the Act. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx It is further submitted that while sending e-mail, inadvertently the bills for amounts paid to D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply sent by the appellant through email on 22.12.2022 has been perused and considered carefully. A perusal of copy of account in the name of Dr. Abhishek Shukla shows that the appellant has made him monthly payment of Rs. 4,00,000/-, under the head consultancy fees and Rs. 40,000/- under the head reimbursement of house rent paid by him. Regular monthly payment of fix amount indicates that the payment made to Dr. Abhishek Shukla is salary in nature, not consultancy fee as claimed by the appellant company. But the appellant has shown the same under the head professional fee and made lessor TDS u/s 194J 8.5. The appellant has itself mentioned that it forgot to furnish copy of bills pertaining to the payment of professional fee to Dr Abhishek Shukla while it was sending reply through email. During the appellate proceedings, the appellant furnished copy of the bills but a perusal of point no. 12 of Farm 35 shows that the appellant has claimed that it has not furnished any additional evidence during the appellate proceedings. In its written submission too, the appellant has not requested to accept additional evidence under rule 46A. Therefore, these bills are not taken into account for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified and deserves to be upheld. Accordingly, ground no. 1 of the appeal is dismissed and not allowed. 7. Before us assessee had filed certain additional evidences like Consultancy Agreement dated 01/08/2019 between Dr. Abhishek Shukla and the assessee, copy of ledger account of legal and professional fees paid to the said person and invoice copy of Accord Fintech P Ltd., dated 26/06/2020 stating that same was for renewal of subscription for which no TDS was required to be deducted. The petition for admission of additional evidences reads as under:- 2. Before the CIT(A), the appellant had requested to grant opportunity to provide the details required while disposing the appeal. However, without granting any opportunity, the CIT(A) confirmed the disallowance made by the A.O. in respect of Legal Professional Fees paid on the ground that the appellant had not furnished copy of contract for consultancy services rendered by Dr. Abhishek Shukla. 3. Since the appellant was not granted an opportunity to adduce required evidences, the appellant could not produce the same before lower authorities. Similarly, The Appellant also humbly submits that it had not received proper guidance whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- to one Dr. Abhishek Shukla which has been stated to be professional fee for business consultation . Though before the ld. AO assessee has sent certain replies through e-mail enclosing copy of PAN Card, ledger account and bank statements highlighting the payment given to Dr. Abhishek Shukla, but this was not acknowledged by the ld. AO. Before the ld. CIT (A), assessee too filed certain details and explanations however, same has been disallowed holding that the payment is not for the business purpose. 12. If the payment has been made during the course of the business even if the business did not result into revenue in that year, then also it is allowable, but onus is heavily upon the assessee to substantiate that the payment was for the purpose of business, and what was the scope of work and activity carried out by the professional. Since most of the documents were not before the ld. AO and ld. CIT (A) therefore, in the interest of justice, this issue is restored back to the file of the ld. AO to examine this issue afresh after considering the documents. The onus will be on the assessee to substantiate the purpose of payment of professional fees for the business and nature of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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