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2016 (6) TMI 495 - AT - Income TaxDisallowance of professional and consultancy fees paid to PWC towards “equity expansion” - Held that:- The nature of service rendered by M/s. PWC to the assessee company such as preparation of information memorandum, identification of potential investors, assistance in value analysis, assistance in structuring the consideration and the transaction, assistance in negotiations and coordinating the completion of the transaction would eventually be attributable for capital expansion and the assessee has incurred the expenses towards the same. It does not matter whether the expenditure incurred has resulted in the expansion of capital. What matters is the nature of expenditure incurred and not the benefit that is derived out of the expenditure. Considering the nature of expenses, it is apparent that the expenditure is incurred for the purpose of expansion of capital and therefore cannot be treated as revenue expenditure. Hence, we do not find it necessary to interfere with the orders of the Revenue. Consequently, this issue is decided against the assessee. Disallowance U/s.14A r.w.r 8D - Held that:- Assessing Officer had invoked the provisions of section14A r.w.r 8D because the assessee had invested in shares, the dividend income of which, is exempt from tax and thereby computed the disallowance by adopting 0.5% of the average of the opening and closing balance of investment in the relevant assessment year which works out to ₹ 29,189/-. Since the disallowance made by the learned Assessing Officer is in accordance with the provisions of the Act, we do not find it necessary to interfere with the orders of the Revenue - Decided against the assessee.
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