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2015 (10) TMI 2555 - AT - Income TaxDisallowance u/s 40A(2)(b) in respect of professional fees - payment to a partnership firm whose partners are having substantial interest in the business of the assessee company - Held that:- As decided in assessee's own case in AY 2007-08 the onus u/s 40(A)(2) being directly on the Revenue, we find that the same has not been discharged by it in any manner. For, a satisfaction of the ingredients of the section would require an analysis of the services provided, and (further) categorizing them into various components, as (say): retainership, foreign exchange matters, appearance fee, etc. It is only such a comprehensive analysis, the details of the expenditure being available from the relevant bills raised, so that the details of the charges raised qua various services performed or charged for is available, that would yield the basis for a decision with regard to the reasonability thereof, including with reference to the legitimate needs of the assessee’s business, could if at all be taken; in the clear absence of which, the Revenue’s case is no more than an allegation or a surmise. The assessee has rightly relied on the decision in the case of Upper India Publishing House (P.) Ltd. v. CIT, (1978 (12) TMI 2 - SUPREME Court ). We, accordingly, find little merit in the Revenue’s case, and direct the deletion of the impugned disallowance. - Decided in favour of assessee Disallowance u/s 115JB - unascertained liability - As per ld. AR, it is an ascertained liability as it represents actual payment of management fees to RIICO in order to arrive at the settlement of secured loan as per scheme of BIFR - Held that:- The contention of ld. AR has neither been controverted by the lower authorities nor by ld. DR. It is thus clearly a case of actual payment of management fees and the same cannot be held to be a provision towards an unascertained liability u/s 115JB(2) (c ) of the Act. As regards the other observation of the AO that the said amount has been shown below the line, in our view, whether the amount is shown above the line or below the line, so long as the amount is charged to profit and loss account and profit and loss account has been prepared in accordance with Companies Act, the same should be allowable in computing the book profits subject to specific adjustments as specified in Section 115JB. In this regard, in response to the specific query from the Bench, it was informed by ld. AR that the amount has been actually charged to the profit and loss account for the year under consideration. Hence, the contention of the AO does not have a legal basis and hence does not find favour with us. Accordingly, we are of the considered view that ld. CIT(A) is not justified in confirming the addition - Decided in favour of assessee
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