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2017 (2) TMI 406 - AT - Income TaxRevision u/s 263 - addition of performance bonus of the earlier years - Held that:- we find that it was only by the end of July, 2010 the assessee company could quantify the performance bonus, and could pay it only alongwith the salary for the Month of August, 2010 payable in the month of September, as such by no stretch of imagination could we say that the assessee could have crystallized the liability during the FY 2009-10 itself or before the due date of filing of return. Addition of advertisement expenses Held that:- AR submission that arm's length price has to be considered, and the Ld. Pr. CIT compared the figures of 2010-11 with the figures of 2007-08 which does not reflect the correct state of affairs is very much acceptable. Further, Ld. AR invited our attention to pages 151 and 153 of the paper book wherein the assessee clearly submitted his contentions in respect of advertisement and selling expenses. Having considered the same, the AO took a probable view that such expenses are allowable as deductions. When we considered this fact in the light of the contemporaneous advertisement charges incurred by several players in the market or by the assessee in successive years, we find that the AO's allowing the same as deduction was not without enquiry or consideration of such facts, as such, the substitution of the opinion of the Ld. Pr. CIT is not justified for revision of the same u/s. 263 of the Act. Addition of service tax - Held that:- Merely because the practical wisdom dawned over the head of the assessee or his Ld. AR at a later point of time, the same cannot become unworthy of consideration or should be looked with suspicion. Ld. Pr. CIT is under a statutory obligation to verify the liability of service tax components in the hands of the assessee and in the hands of the landlord and since the landlord is under a statutory obligation to remit it to the government, section 43B of the Act is applicable only in respect of landlord. Ld. Pr. CIT should have taken the view that in the hands of the assessee such a liability assumes the character of contractual liability as such, sec. 43B of the Act has no application. Thus we are convinced that such a course taken by the Ld. Pr. CIT is beyond the scope of section 263 of the Act and it is for the Ld. Pr. CIT to pursue his basis to initiate proceedings vide show cause notice dated 17.02.2016 to their logical conclusion. His observation that there was no proper or adequate enquiry by the AO on these aspects is a clear shift of stand which is not permissible under law. - Decided in favour of assessee
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