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2019 (3) TMI 629 - ITAT DELHIReopening of assessment - buying agency commission received by the assessee - HELD THAT:- As decided in assessee own case [2013 (1) TMI 106 - ITAT DELHI] the services rendered by the assessee in this case were purely in the nature of procurement services and cannot be characterized as ‘managerial’ ‘technical’ or ‘consultancy’ services. Accordingly, the consideration received by the assessee was appropriately classified as ‘commission’ as against ‘fees for technical. - Decided against revenue Addition on account of difference of cost allocation - HELD THAT:- The matter is of factual verification only. The assessee in the return of income filed has offered marketing expenses reimbursement of ₹ 8,17,970/-and taxes borne by AIMPL amounting to ₹ 2,06,976/-and grossed up the amount to ₹ 10,24,946/-. Whereas the Assessing Officer considered the figure of ₹ 9,93,395/- reported as marketing expenses reimbursement in form No. 3 CEB and made addition for the difference amount (9,93,395 – 8,17,970) = ₹ 1,75,425/-. The assessee explained the amount of marketing expenses reimbursement and tax component borne by the Indian entity and offered both the amount for tax. In view of the above factual finding, which has not been controverted by the DR, we do not find any error in the order of the CIT(A) on the issue in dispute, accordingly, we uphold the same and dismiss the ground No. 2 of the appeal of the Revenue. Form of appeal and memorandum of cross-objections to Appellate Tribunal - authorised signatory of the company - HELD THAT:- Company being non-resident entity, the cross objection might have been verified by person holding a valid power of attorney from such company and said power of attorney was required to be attached with the said cross objection. But on the perusal of the cross objection, it is found that it has been filed by authorised signatory without enclosing a valid power of attorney, and thus the cross objection is not maintainable, accordingly, it is dismissed in limine. Penalty u/s 271(1)(c) - CIT(A) has deleted the penalty mainly on the ground that all information in relation to reimbursement of costs incurred on behalf of the Indian entity ‘AIMPL’ was duly disclosed in the notes to computation annexed along with the original return of income and in the revised return of income, the assessee already offered the said reimbursement to tax - On the issue of marketing support service fee, also the Ld. CIT(A) observed that same was offered in the revised return of income, before an enquiry/discussion by the AO on that issue - HELD THAT:- CIT(A) followed the decision of the Hon’ble Supreme Court in the case of Reliance Petro Product Limited [2010 (3) TMI 80 - SUPREME COURT] wherein it is held that if a claim made by the appellant is not found sustainable by the Assessing Officer during assessment proceeding, it does not automatically lead to concealment of income. We are also of the opinion that the Explanation by the assessee in respect of the additions made are bonafide and thus no penalty invoking Explanation -1 to section 271(1)(c) of the Act could have been levied in the case of the assessee. In view of the aforesaid discussion, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The grounds of the appeal of the Revenue are dismissed.
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