Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 587 - AT - Income TaxDisallowing being commission paid treating the same as pre-project expenditure - HELD THAT:- As the agreement dated 25.03.2002 with the said service provider M/s. Ultro Technologies (India) Pvt. Ltd. has not been filed with the paper book while agreement dated 01.01.2002 with GAIL Ltd. has been placed on record . However, the same has no reference of any intermediary or agency being involved in grant of the work order. Therefore, the agreement dated 25.03.2002 was relevant piece of evidence to understand what was the nature of services and for which period of those services the commission was paid to M/s. Ultro Technologies (India) Pvt. Ltd.. During hearing the Bench has sought the agreement however, the Ld. Counsel for the assessee stated at Bar that as the agreement pertains to such of far of period of 2002, the same is not available and cannot be produced before the Bench. That being so the findings of Ld. AO or Ld. First Appellate Authority that the expenses were pre project expenditure cannot be interfered. Assessee has claimed that the it engaged M/s. Ultro Technologies India Private Limited to help it in procuring and executing the order but it is strange that the agreement with GAIL Ltd. was executed on 01.01.2002 while the debit note for commission has been raised by Ultro Technologies (India) Pvt. Ltd, in terms of agreement dated 25.03.2002. So, the onus was on the assessee to establish what were the agreed terms and conditions or services which were provided by the agent during the term of execution of the project but the same is not established. Thus, the law relied is distinguishable on matter on record and there is no substance in the ground 1 to differ with the findings of Ld. Tax Authorities below. The same is determined against the appellant. Disallowance to the extent of 20% of the expenditure relating it to period prior to the setting of PO in India - addition of Tour, Travelling and Conveyance expenses on ad-hoc basis and treating the same as pre-project expenditure - HELD THAT:- This addition of travel and conveyance expenses there appears to be no justification to estimate 20% of the expenses being related to pre-operative period. FAA has observed that assessee has not given any substantive evidence to refute or reject the estimation made by the Ld. AO while confirming the disallowance. While the ld. AO observed in his assessment order that the complete details of Tour, Travelling & Conveyance expenses are not available. Therefore, when it is not possible to verify if the expenditure were incurred after the establishment of project office or before the establishment of project office, then there is no justification to proportionately appropriate 20% of the expenditure to prior period expenditure. The same being merely whimsical and sustaining it the Ld. FAA has also erred therefore in regard to these grounds the order of ld. Tax Authorities below cannot be sustained and the grounds are allowed. Not treating the training fee as under the definition of technical service fee as taxable under sub-clause (B] of clause (b] of Section 115A(1] of the Act and taxing the same as business receipts of the appellant - HELD THAT:- As assessee claims this ground was raised before the Ld. AO who failed to determine while passing the assessment order and Ld. First Appellate Authority has invoked the provisions of Section 44 DA of the Act which had come into effect prospectively from 21.03.2003 only therefore, for the relevant assessment year 2003-04 the same was not applicable. Consequently this ground deserves to be allowed for statistical purposes only with the direction to the Ld. AO to consider the claim of assessee with regard to exemption of training fee income and to that extent the ground is allowed and issue is restored to the file of the Ld. AO. Appeal of assessee is partly allowed.
|