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2018 (1) TMI 1489 - ITAT DELHIAllowable business expenses u/s 37 - wholly and exclusively for the purpose of business - amount paid to ‘Lok Foundation’, an entity registered in Mauritius - agreement with Lok Foundation to help them identify certain investors and influence them to participate in Lok II - assessee provided services to the two overseas funds Lok I and Lok II and received advisory fees Held that:- It is because the services provided by Lok Foundation that the increase in committed funds took place which consequently increased the assessee’s advisory fees from ₹ 4.7 crore in the preceding year to ₹ 9.21 crore in the current year, which is roughly 93%. As against this, the assessee paid only a sum of ₹ 2.88 crore to the Lok Foundation. When the assessee received a composite amount of advisory fee which covered not only the services rendered by it alone, but also by Lok Foundation, by no standard, the payment made for securing services of Lok Foundation can be considered as not incidental to business. But for such services, the assessee would not have earned the revenue of this magnitude. Since such payment is incidental to carrying on of business. We are satisfied that the ld. CIT(A) rightly appreciated the facts in deleting the addition. - Decided against revenue
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