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2015 (10) TMI 301 - ITAT DELHIDisallowance of expenses as not being for the purpose of the business of the appellant - as per revenue assessee has not filed any documentary evidence to substantiate its claim before the AO - Held that:- The correctness in the contention of the assessee that despite the fact that C-1 India incurred losses in the relevant previous year, the company had active business and the website of C-1 India also indicates the extensive business activities undertaken by them. We find that the company products and solutions in the Procurement space cover FRQ and Tender Management, vendor management, contract management, auction (reverse and forward), emarket place, sourcing services, consulting and supplier analytics etc. and the offer tailor made products and services based on the best practices specific to industry domain and the few screenshots from the company’s website showing the products and services offered, awards and achievements. We observe the correctness in the contention of the assessee’s counsel that these details are very much available on the internet which can be accessed by anybody. In view of the above, we find that assessee’s counsel has rightly submitted that facts indicate the extent of business activities of C-1 India which is beyond doubt. Decision of the AO as well Ld. CIT(A) is not correct in disallowing the payment of ₹ 21,00,000/- by holding that the expenditure made by the assessee was not for the business purpose. We also observe that Revenue Authorities have wrongly held that there were inconsistency in the stand of the assessee for the nature of payment to C-1 India Pvt. Ltd. as well as that assessee company is controlled by Sh. Suresh Nanda for the purpose of payment and the payment appeared to have been made of set off the losses in the public company. We find that expenditure incurred by the assessee qualify as deduction u/s. 37(1) of the I.T. Act and the assessee fully established that the expenditure in dispute has been made wholly and exclusively for the purpose of business. IN view of the above, we find that there is a force in the arguments advanced by the Ld. Counsel of the assessee, hence, we delete the disallowance of ₹ 21,00,000/-. - Decided in favour of assessee.
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