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2020 (12) TMI 974 - AT - Income TaxDisallowance of expenditure on account of professional charges and security services - no business during the year - As per AO assessee does not have any income during the year and consequently no premises were available with the assessee - HELD THAT:- With respect to security services it was stated that the assessee has not paid any rent but has moved into basement of Thapar House being the premise of its group company. The assessee carried out its work from that premises and therefore, security personal continued to be deployed. For the above proposition the assessee has only produced the copies of the bills and ledger account of the expenditure. With respect to the legal expenditure as not known that what for the above legal expenditure were paid by the assessee. The narration of the bills speaks that it is professional fees for providing legal opinion and drafting of various legal documents for the clients of the assessee ₹ 10 lakhs are charged. With respect to ₹ 20,000/- the same were paid for the certification related to the companies law filing with MCA. Therefore out of professional fees ₹ 1020,000/- disallowance of ₹ 20,000/- requires to be deleted. But for the legal fees/professional charges, assessee needs to show that whether these expenditure are wholly and exclusively incurred for the purposes of business. Assessee also needs to elaborate the facts about the fact business of the assessee has not ceased to exist. Further, with respect to the security charges a sum of ₹ 60450/- per month were paid to one agency for providing security charges, but assessee needs to establish that those premises are used for the purposes of the business of the assessee. Assessee must show that it operates from that premises and why it bears whole of the security charges. In view of this, we set aside issue back to the file of the ld AO with respect to legal fees of ₹ 10 Lakhs and Security charges with direction to the assessee to prove that same - Decided partly in favour of assessee.
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