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2016 (6) TMI 1402 - AT - Income TaxExpenditure of foreign travel to subsidiary companies - HELD THAT:- We are not convinced with the indirect beneficiary contribution by the subsidiary company in the progress of the assessee company on global business activities - expenditure of foreign travel to subsidiary companies shall be separately allocated to cost of project of subsidiary company and holding company and upheld the order of the CIT (A) on this ground as the CIT (Appeals) discussed the issue and gave finding on subsidiary company and restricted the disallowance. As the balance amount was not adjudicated, we remit the issue to the file of Assessing Officer to verify the genuineness of transaction and allow the claim. The ground of the assessee is partly allowed. Addition paid by the assessee to Bombay Stock Exchange in connection to the amalgamation of business - HELD THAT:- The assessee company incurred this expenditure to merge M/s. Elgi Industrial Products Ltd for the smooth conduct of business and prime face this fees is paid once in life time for amalgamation of the company with enduring benefits we are of the opinion the expenditure has to be apportioned and transferred to profit and loss account as per the provisions of Sec. 35DD and we direct the ld. AO to allow apportioned claim in the previous year being the first year and this ground of the assessee is partly allowed. Disallowance of expenditure as legal and professional charges paid to overseas parties - HELD THAT:- The expenditure is in the nature of legal and professional fee paid for services of translation, documentation, corporate matters and associated filing and such expenditure is wholly and exclusively for the business purpose and expenditure is genuine and relied on the decision of Apex Court. Assessee company acquired of Shares of M/s. Belair SA at Paris is for conducting business in Europe region and activity does relate to investment for enduring value and the expenses on acquisition of shares of foreign company directly or indirectly takes the character of capital in nature and shall be part of Business acquisition. Therefore, considering the apparent facts, necessity of expenditure and overseas payment, we are of the opinion that the professional charges paid to M/s. Stehlin & Associates, Paris in connection with acquisition is capital expenditure and we upheld the order of CIT() on this ground and the ground of the assessee is dismissed. Remand report as laid out under Rule 46A of Income Tax Rules, 1962 while adjudicating the issue of foreign travel expenses - HELD THAT:- CIT (Appeals) has elaborately discussed on breakup of expenditure and business activities and granted partial relief. Assessee has submitted information before CIT (Appeals) which the ld. AO could not verify and ld. CIT (Appeals) has not called for comments or remand report and not complied the provisions of Rule 46A. We therefore, set aside the disputed issue to the file of the ld. Assessing Officer for limited purpose to verify the genuineness of statements filed in the appellate proceedings and the ld. Assessing Officer shall provide adequate opportunity of being heard to the assessee before passing the orders and the ground of the Revenue is allowed for statistical purpose. Holyroyd Machinery replaced comes under ''Repairs and Maintenance'' - allowable expenditure u/s.37 - whether it is clearly a new machinery installed? - HELD THAT:- As explained that the replacement of parts play a important role in machinery and can work independently and shall provide perpetual enduring benefit and increase the life of existing machine. AR substantiated his arguments with evidence of photographs of units and also upgrade proposal of the company and relied on judicial decision of Apex Court. Apparent facts, functional test, submissions and judicial decisions set aside the order of CIT (Appeals) and remit the entire disputed issue to the file of AO as the assessee has submitted photographs and material before us and which need to be examined with technical report and pass the order on merits after providing adequate opportunity of being heard to the assessee and the ground of the Revenue is partly allowed for statistical purpose. Allowance of carry forward depreciation loss - Whether CIT (Appeals) erred in not deciding the issue and remitting it back to the ld. Assessing Officer in violation of the provisions of Sec. 251(1)(a)? - HELD THAT:- We considered the findings of the ld.CIT(A) on the judicial decisions of Hon'ble High Court and Supreme Court and ld. CIT (Appeals) has only directed the ld. AO to examine the claim and allow as per law. CIT (Appeals) has only directed the ld. AO with a condition to verify and the power of Commissioner of Income Tax (Appeals) are co-terminus with AO and we considering the facts are of the opinion that the action of Commissioner of Income Tax (Appeals) is justified and we dismiss the ground of the Revenue.
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