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TMI Blog2018 (7) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that it would be justifiable to set aside this issue to Ld. AO. Assessee is directed to furnish all receipts in respect of which it was alleged that these are reimbursement. AO is directed to verify the details filed by assessee and to allow assessee’s claim as per law. Set aside this issue to Ld. AO. Assessee is directed to file reconciliation of income vis-a-vis the TDS claimed. Ld. AO shall verify the relevant details filed by assessee and allow the claim as per law. Addition on account of property tax - AO made addition in the hands of assessee, as assessee was not the owner of property for which the taxes were paid - Held that:- It is an admitted position that assessee incurred these expenses towards the property taken on lease as per the agreement entered into by assessee and lessor. In our considered opinion, payment of local taxes was agreed by assessee as per agreement and therefore was binding. Thus, it was an expenditure incurred by assessee to discharge an obligation under the agreement for purposes of business, which is an allowable expenditure. Addition being 50% claimed towards guesthouse expenses - Held that:- Admittedly Assessing Officer estimated di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50% of the ₹ 15,97,553/- claimed towards guest house expenses as the assessee failed to produce complete bills and vouchers and use of personal nature by directors could not be ruled out. 7. The appellant craves leave to add, to alter,or amend any grounds of the appeal raised above at the time of the hearing. 2 . Brief facts of the case are as under: Assessee filed its return of income on 21/12/07 declaring total income of ₹ 29,17,08,576/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (the Act) and statutory notices under section 143(2) of the Act along with questionnaire was issued. In response to the notices Representatives of assessee appeared before Ld. Assessing Officer (A.O. ). 2.1. Ld. AO observed that assessee is engaged in the business of Chemical Engineering and plant construction. During the year it was observed that assessee has declared gross turnover of ₹ 105.14 crores as against previous year turnover of ₹ 25.92 crores which includes domestic sales and services, export income, contract revenue and other income. 2.2. Ld. AO observed that assessee made certain payments to its holding company M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed before us. 8. In our opinion assessee incurred license expenses towards WAN and local hardware, annual fee which has been treated by Assessing Officer to be capital expenditure. It is observed that assessee has to incur these expenses annually on which tax has been deducted. Assessee claimed license expenses of ₹ 49,62,461/-in Profit and Loss account for the year under consideration out of total invoice amount of ₹ 83,51,907/-. We agree with the observation of Ld. CIT (A) that the license expenses incurred by assessee do not create any asset but only provides means for running the business with a view to earn profits. Hon ble Supreme Court in the case of Alembic Chemicals Works Co. Ltd vs. CIT reported in (1989) 177 ITR 377 has observed that; The ideas of once for all payment and enduring benefits are not to be treated as something akin to statutory conditions; nor are the notions of capital or revenue a judicial fetish. 9. Under such circumstances we do not find any infirmity in the addition being deleted as assessee has capitalised the value of the structures on which depreciation has been allowed. 9.1 . Accordingly we dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at assessee received advance from its customers amounting to ₹ 20,95,97,726/-, which were not offered to taxation, whereas assessee claimed credit of TDS on these advances during the year under consideration. The Ld. AO very categorically observed in assessment order that assessee failed to file confirmation of the concerned parties in support of the claim and that certain advances received have not been reflected in income for current year on which TDS has been claimed. 17.2. Ld. CIT DR submitted that Ld.CIT(A) without verifying details allowed claim of assessee without reconciliation being made. He submitted that no proper verification has been carried out before allowing TDS claim. He submitted that this issue also may be set-aside to Ld. AO for due verification. 17.3. Ld.AR could not controvert the fact that TDS has been claimed on certain advances which did not form part of total income. He did not object for the issue being set aside to Ld. AO. 18 . We have perused the submissions advanced by both the sides in the light of the records placed before us. 19. Considering the totality of facts as well as contradiction in nature of payment, we are of consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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