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2022 (6) TMI 1455 - AT - Income TaxDisallowance u/s 37(1) - expenditure on account of group management fee paid to associate enterprises - no evidences regarding actual occurrence of the management service fees for which the foreign parent company has charged - HELD THAT:- What can be concluded is that assessee has failed to produce any cogent evidence before the Ld. AO or Ld. First Appellate Authority to indicate that the expenditure incurred was for the purposes of the business. Assessee company is a advertising agency in Gurgaon and engaged in providing advertising communication and marketing solutions to its clients both domestic and international. The company is closely held company with 99.76% of the shares being held by the Holding Company . Thus, certainly the assessee must be in possession of quite relevant commercial and accounting documents which may indicate that there was valid expenditure on as many as ten heads, which were claimed to be the areas of expert services. However, no evidence to that effect was led. AO has rightly relied the judgment of Cushman and Wakefield Indian (P.) Ltd. [2014 (5) TMI 897 - DELHI HIGH COURT] to hold that in spite of the case of assessee being covered by transfer pricing provision that does not restrict or in any way by pass the functions of the TPO when AO goes for determining u/s 37(1) of the Act, that whether the business expenditure claimed is expended wholly and exclusively for the purposes of business or not. Decided against assessee.
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