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2014 (2) TMI 1112 - AT - Income TaxInflated expenditure – Held that:- The AO and CIT(A) erred in resorting to mathematical jugglery so as to deny the expenditure claimed by the assessee - There is no basis for AO disallowance of the so called inflated expenditure and CIT(A) also did not apply his mind in restricting the amount on an adhoc basis to Rs.1 crore and Rs.1.10 crores without any basis – Relying upon CIT vs. Dalmia Cement (Bharat) Ltd. [2001 (9) TMI 48 - DELHI High Court ] - Without doing anything on record, this sort of disallowance of expenditure claimed by the assessee cannot be accepted or justified - thus, the disallowance of expenditure resorted by the Assessing Officer is cancelled - AO is directed to allow expenditure as claimed – Decided in favour of Assessee. Disallowance u/s 40(a)(ia) of the Act - Non genuine expenditure – Held that:- The payments made to M/s. Apollo Consulting Services Corporation USA does not come within the purview of provisions of section 195 – payments made to M/s. Apollo Consulting Services Corporation USA cannot be treated as fees for included services within the meaning of Article 12(4)(b) of DTAA and provisions of section 90(2) are applicable even if the payments constitute fees for technical services under section 9(1)(vii) - Since they are not chargeable under the IT Act, provisions of section 195 are not attracted and assessee has no liability to deduct tax at source - the CIT(A) did not consider fit enough to consider the issue of genuineness of the expenditure, when there are already findings on the issue which was examined in detail by the CIT(A) in another proceeding – thus, it cannot be held that the expenditure is not genuine – there is no merit in the appeal of the revenue – Decided in favour of assessee.
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