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2020 (12) TMI 120 - AT - Income TaxDisallowance u/s 40(a)(i) - amount was erroneously shown under “miscellaneous income” - assessee has reversed a sum during the current year itself - HELD THAT:- Details of miscellaneous income that a sum of ₹ 32,93,513/- has been shown as reversal of the amount payable to M/s Gartner. If the said reversal was made out of the expenditure of ₹ 68,05,703/- originally booked by the assessee during the year under consideration, then there is merit in the claim of the assessee, i.e., what is payable to M/s Gartner for the year under consideration would be the net amount - as submitted by Ld D.R, it is not clear as to whether the above said reversal was related to the expenditure originally booked or it related to any other liability. Accordingly, we are of the view the above said claim of assessee requires examination with reference to the books of accounts and profit & loss account of the assessee. If the reversal pertains an expenditure booked/included - the disallowance requires to be restricted to the net amount of expenditure claimed by the assessee. Accordingly, we restore this claim of the assessee to the file of AO for examining it properly. Payment made towards subscription charges in respect of business carried on by the assessee in USA - as submitted that the above said payment is not liable for deduction of tax at source in view of section 9(1)(vi)(b) - HELD THAT:- We notice that the exception provided under sec.9(1)(vi)(b) would apply only if the royalty is paid by a resident assessee for the purposes of business or profession carried on by such person outside India. We notice that the assessee has, for the first time, made the claim before Ld CIT(A) that its USA branch is carrying on business separately and subscription services are exclusively used by it. As noticed earlier that the Ld CIT(A) has rejected the said claim for the reason that the assessee has failed to substantiate its claim; that the assessee has failed to show that the impugned services were used by its foreign branch only and that certain bills have been found at the Indian address of the assessee. A.R prayed that the assessee may be provided with one more opportunity to prove all its claims. Hence, in the interest of natural justice, we are of the view that the assessee may be provided with an opportunity to substantiate its claim. We have noticed that the Ld CIT(A) has raised very valid points on the claim of the assessee, which is also required to be addressed by the assessee - Accordingly, we restore this issue also to the file of the AO for examining it afresh .
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