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TMI Blog2025 (2) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... expended wholly and exclusively for the purposes of business
Credit for TDS - HELD THAT:- Assessee submitted that the Assessing Officer be directed to give credit for TDS in accordance with law. D.R. for Revenue expressed no objection to this. Accordingly, we direct the AO to give credit to the assessee for tax deducted at source in accordance with law. X X X X Extracts X X X X X X X X Extracts X X X X ..... nion of India (1981)-1SCC 644 at page 709 para 94, placed at page 260 of the paper book. In both these cases, it has been held that violation of principal of natural justice cannot be cured by the appellate authority. (v) In the present case, specific ground was taken before the Ld. CIT(A) regarding the applicability of section 14A of the Act but the Ld. CIT(A) did not appreciate the facts and the merit of the case and he confirmed the addition. All the supporting documents were also furnished. Regarding the observations made by the Ld. A.O, our brief submissions are as under- (A) Regarding applicability of section 14A of the Act: As the appellant has not claimed any income as exempt against the expenses debited to the profit & loss Account, there is no scope of any disallowance u/s 14A of the Act and on this ground also addition of Rs. 64,88,451/- deserves to be deleted. No applicability of Section 14A when no income is claimed as exempt as held in M/s Redington (I) Ltd. in 392 ITR 633) Copy of Balance Sheet and Profit & Loss Account for the F.Y. 2007-2008 is placed at pages 1 to 23 of the Paper Book. (Relevant page 6) Copy of acknowledgement of return and comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tware against expenditure of Rs. 64,88,451/-. Details of revenue and expenditure for three years are placed at page119 of the paper book. (D) Regarding violation of principal of natural justice: The Ld. CIT(A) in his appellate order has quoted a number of case authorities. But in all these case authorities, queries were raised by the Assessing Authority and assessee failed to make compliance. In the present case, no sort of query was raised. So none of the case authorities quoted by the Ld. CIT(A) is applicable in the present case. Assessment order is liable to be quashed on the ground of violation of natural justice also. (vi) Reliance is placed on the following case authorities: 1. On Genuineness of expenses : (a) Eastern Investments Ltd Vs. CIT 1951-(020)-ITR 0001-SC (Page 261-267 of the paper book) (b) CIT Vs. Delhi Safe deposits Co. Ltd of the paper book) 1982- 133-ITR 756-SC (Page 268 to 273 (c) DCIT Vs. Vodafone Mobile Services Ltd 2016-(130)-DTR-195 (ITAT Delhi) (pages) (d) Additional CIT Vs. Rajasthan Spinning and weaving Mills Limited (2005)-274-ITR - (Pages 135 to 144 of the paper book.) (e) CIT Vs. Modern Insulators Ltd. [2014-110 DTR 297 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Copy of assessee's letter dated 27.07.2013 VERIFICATION SL. NO. PARTICULARS 1 Copy of Balance Sheet and Profit & Loss Account for the F.Y. 2008-09 and 2009-2010 19 Copy of Assessment order dated 31.01.2013 passed u/s 143(3) in assessee's own case in A.Y. 2010-2011 20 A chart showing details of revenue earned on export software for three years 21 Copy of CA Certificate regarding remittance of payment to ASP Service net LLC. 22 Copy of Hon'ble Supreme Court order (SLP NO. 22889/2008) 23 Copy of case authority Aditya Birla Finance Vs. ACIT [2015-(ID2)-GHJX-521-TBOM] 24 Copy of Case Authority cit Vs. M/s Lakhani Marketing [2014-(226)-Taxman 0045-P & H] 25 Case Authority Additional CIT Vs. Rajasthan Spinning and Weaving Mills Limited [2005-(274)-ITR-465 (Raj) 26 Copy of queries letter dated 10.08.2010 calling for details of expenses above Rs.50,000/- 27 Copy of Assessee's reply dated 02.09.2010 28 Copy of Assessee's reply dated 16.09.2010 29 Copy of Order Sheet entry dated 17.09.2010 asking the assessee to produce books of accounts. Books of accounts were produced on 08.12.2010 30 Copy of Order Sheet entries of the hearings conducted bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee contended that the aforesaid addition of Rs. 64,88,451/- should be deleted. (B.1) Learned D.R. for Revenue opposed this contention of the learned A.R. for the assessee. He highlighted the fact that the business secured by the assessee in USA during the year under consideration was not commensurate with the payment made to the aforesaid two entities by way of retainership. Therefore, he submitted that the payment made to the aforesaid two entities do not deserve to be deleted. (B.2) In his rejoinder, the learned A.R. for the assessee conceded that the business secured during the year in USA, as a result of aforesaid retainership, was not satisfactory. Therefore, he submitted, the retainerships were terminated within a few months because the assessee was not satisfied with the services of the aforesaid entities, namely ASP and TEK. However, he once again highlighted that the efforts made by the aforesaid entities resulted in good business in subsequent years. He further contended that the mere fact that the payments made did not result in expected benefits, cannot lead to the conclusion that the payment made was not for the purpose of business. (C) We have heard both the si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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