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2021 (12) TMI 445 - AT - Income TaxPayment to related person u/s 40A - Addition on account of payment made by the assessee to quantum asset management company by way of research fee - HELD THAT:- Issue decided in favour of assessee as relying on own case [2016 (10) TMI 1 - ITAT MUMBAI] as held assessee has brought on record the facts that the subsidiary company QAMC generated an aggregate income by way of research fees during the previous year, which includes the fees paid by the assessee. QAMC has offered the entire amount of research fees, to tax and paid the same rate of tax as was applicable to the assessee. On the other hand, the revenue has failed to point out as to how the assessee evaded payment of tax by making unreasonable payment to its subsidiary for research services - A subsidiary company of the assessee is not a related person within the meaning of section 40A (2), the provisions of section 40A(2) do not attract in the present case - Decided in favour of assessee. Addition of marketing and distribution fees paid to QIEF Management LLC - HELD THAT:- As decided in own case [2016 (10) TMI 1 - ITAT MUMBAI] invoking of section 40A(2)(b) of the Act to disallow a portion of the expenditure is an altogether different dimension than invoking section 37(1) of the Act to say that the expenditure is not laid out wholly and exclusively for the purposes of business. In fact, under such a situation, it was all the more onerous on the part of the CIT(A) to demonstrate as to why the entire expenditure was disallowable under section 37(1) of the Act, having regard to the stand of the Assessing Officer in the remand report as well as in the assessment for assessment year 2012-13. The said burden, in our view, has not been discharged by the CIT(A) in the present case and, therefore, we are unable to acquiesce to the same. As a consequence, we hereby set-aside the order of the CIT(A) on this aspect and direct the Assessing Officer to delete the addition representing payment made to QIEF for marketing support services. Thus, on this aspect assessee succeeds. Additional claim of expenditure on account of education cess payable on the income tax which was not claimed in the return of income and was being claimed for the 1st time before the Tribunal by way of this additional ground of appeal - HELD THAT:- Undisputedly the issue of claim of education cess was claimed for the first time before us. The issue being purely legal and also covered by the jurisdictional high court in favour of the assesse. In our opinion all the facts qua this issue are available on records and no new facts or independent verification of facts are required. Moreover the assessee can raise the legal issue at any appellate stage even if not raised before the authorities below. Besides the issue is squarely covered by the decisions of the Apex Court as well as Jurisdictional High Courts relied by the Ld. A.R. as stated above. Therefore we are inclined to admit the same for adjudication. The issue raised in the additional ground is squarely covered by the recent order in the case of Sesa Goa Limited [2020 (3) TMI 347 - BOMBAY HIGH COURT] - as the aforementioned claim had been raised by the assessee for the very first time before us, we, therefore, in all fairness restore the matter to the file of the A.O for considering the said claim of the assessee in the backdrop of our observations recorded hereinabove, though, subject to verification of the factual position as had been claimed by the assessee before us. The additional Ground is allowed for statistical purposes in terms of our observations recorded hereinabove.
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