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2023 (4) TMI 1050 - AT - Income TaxDisallowance of payment made towards drawing and designing charges outside India - matching concept of account - DR submitted that the drawing and designing expenses claimed by the assessee was part of the contract agreement and therefore separate claim of the same which is in contradiction to the terms and conditions of the contract agreement, cannot be accepted - HELD THAT:- Whether the drawing and designing services for which the payments are made are related to the agreement with the Mckeown or not, cannot be verified. AR was unable to substantiate this aspect during the hearing before us. We, therefore, are of the view that this issue needs to be restored back to the file of AO to examine the additional evidence produced before us and also to examine the nexus of payments for drawing and designing charges to the foreign entities that the same was made in terms of agreement with Mckeown for the successful performance of the terms of agreement, AO is directed to examine and verify the information and evidences and after satisfaction that the payment of drawing and design charges were paid in terms of agreement with McKeown international Inc, USA dated 01.02.2012 for sell / purchase of coal charging car under the obligations cast upon the assessee, the same shall be allowed in the year of completion of project under matching concept of accounting. Our view on matching concept of account has support of the view taken in the case of CIT Vs Taparia Tools Ltd [2003 (1) TMI 83 - BOMBAY HIGH COURT] - We are persuaded to restore this matter back to the file of AO for readjudication - Ground allowed for statistical purposes. Disallowance u/s.14A - Suo moto addition made by assessee rejected - HELD THAT:- Admittedly, in the present case there were certain expenditure incurred by the assessee to earn the exempted income which have suo moto disallowed by the assess, A.O. has rejected the contentions and explanations of the assessee without assigning any specific reasons for his dissatisfaction regarding rejecting the suo moto disallowance by the assessee and the disallowance was made by applying rule 8D. We hold that the disallowance made u/s 14A read with rule 8D of the income tax act is uncalled-for and is liable to be deleted - Decided in favour of assessee.
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