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2022 (6) TMI 524 - AT - Income TaxTDS u/s 194J - non deduction of tds on expenditure claimed for arbitration work u/s. 40(a)(ia) - HELD THAT:- Sums were paid to arbitrator as fee and clerical expenses and no reasonable explanation was given as to why TDS was not deducted thereupon - The assessee's plea that provisions of section 194J are not attracted has rightly been rejected by the Revenue authorities. Moreover, as noted by the Revenue authorities, the assessee itself in its ledger entry has mentioned that the payment is net of TDS to the arbitrator. Hence, assessee is aware that TDS was to be deducted failure to do so would certainly result in disallowance. Hence, we do not find any infirmity in the addition. Payment of Sum paid as professional fee to Pramodh Engineers - AO Rejected expenditure was that not justified u/s. 37(1) and the assessee has not conducted any business and no vouchers bills in this regard was produced - HELD THAT:- As the assessee was pursuing before the Arbitral Tribunal and in fact on 04.07.2013, a further award in favour of the assessee of Rs. 15.84 Crores was awarded. It is another matter that the assessee has not taken any cognizance of the same in the accounts and no adverse inference by the authorities below is also there. Hence, the plea of professional charges paid Pramodh Engineers for pursuing and following of proceedings at Arbitral Tribunal, without any justification is not at all justified. Hence the reasoning of Revenue Authorities that the same is not for the purpose of business is liable to be rejected. CIT(A) has sustained the addition is absence of documentary evidence - We note that the Ld. CIT(A) examined the bills of professional charges to Pramodh Engineers. There is no dispute that the TDS on the same has been deducted. As held by us above, the same is for the purpose of business wherein the said firm was pursuing arbitration proceedings which as mentioned in the note of account has resulted in Rs. 15.84 crores being awarded in favour of assessee. The narration of the professional fee bill by the payee is not at all material in rejecting the professional fee bill. A professional fee bill is based upon understanding between the assessee and professional service provider. It is assessee who is to be satisfied by the professional services and not the Assessing Officer. It is not the case that the Assessing Officer is sitting into the computation of income of Pramodh Engineers. How Pramodh Engineers narrates and adjusts as professional fee receipt against what expenses is the look out of the Assessing Officer of Pramodh Engineers. The Assessing Officer in the present case or the Ld. CIT(A) for that matter cannot ask the assessee for further evidence of the professional fee bill raised. In this view of the matter, in our considered opinion, the rejection of the three bills of M/s. Pramodh Engineers is not at all justified. Hence, we delete the same as the expenditure is for business purpose; no case is made out for lack of deduction of TDS or the expenditure being bogus. The rest disallowance is to be upheld because no bills of Pramodh Engineers have been submitted. We do not find any infirmity in this regard as the assessee cannot claim any expenditure without furnishing the necessary bills. Accordingly, we partly uphold the order of the ld. CIT(A) as above. Appeal of the assessee is partly allowed.
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