TMI Blog2014 (4) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... any for the year under consideration is at Rs. 84,09,900 - The returned income of the assessee is at Rs. 11,99,832 - Both the assessee and its holding company come within the same tax brackets - there is no benefit to the assessee by inflating its expenditure and diverting it towards its holding company as both parties are subject to same rate of tax and both parties are showing positive income - The entire exercise is tax neutral – thus, there is no reason to interfere with the findings of the CIT(A) – Decided against Revenue. - I.T.A. No.3505/Mum/2010 - - - Dated:- 28-2-2014 - Shri D. Manmohan, VP And Shri N. K. Billaiya, AM,JJ. For the Appellant : Shri R. K. Sahu For the Respondent : Shri K. Gopal Shri Jitendra Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from bills, Icd and HR business for the year 1.4.2005 to 31.3.2006. and in respect of the payment of compensation charges, the assessee filed Memorandum of understanding with its holding company which reads as under: Both the parties above hereinafter called M/s. Pinnacle Finance Vidya Vikas respectively expressed the need to record the understanding between them. Pinnacle permits to Vidya Vikas for use of infrastructure and office during the period 1.4.05 to 31.3.06. In consideration Vidya Vikas agrees to pay compensation to Pinnacle Finance for various offices as under: Mumbai @ Rs. 31250 per month Chennai @ Rs. 10000 per month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges were paid. The AO was of the firm belief that the assessee has not produced any documentary or supporting evidence to buttress its claim as to the actual facilities used and disallowed the compensation charges so paid. 6. The assessee carried the matter before the Ld. CIT(A). Before the Ld. CIT(A), the assessee reiterated what has been submitted before the AO. After considering the facts and the submissions, the Ld. CIT(A) was of the opinion that though the AO did not accept the list of the clients provided by the holding company but at the same time did not verify anything from those clients whether they were actually introduced to the assessee by its holding company. The Ld. CIT(A) further observed that the AO was not having an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 7,95,000/-. 8. Aggrieved by this, the Revenue is before us. The Ld. Departmental Representative strongly supporting the findings of the AO relied upon certain judicial decisions. It is the say of the Ld. DR that by incurring such expenditure the sole purpose of the assessee was to evade tax by inflating its expenditure. For this, the Ld. DR drew support from the decision of the Hon ble High Court of Gauhati in the case of Assam Pesticides Agro Chemicals Vs CIT 227 ITR 846. 9. We have considered the rival submissions and carefully perused the orders of the lower authorities. We also have the benefit of the computation of total income of the holding company M/s. Pinnacle Financial Consultancy Investment Services Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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