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TMI Blog2010 (12) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs.12,49,05,360/-. The Ld. CIT-9, Mumbai initiated the proceedings u/s.263 of the Act for revising the order passed u/s.143(3) by the A.O. The Ld. CIT set aside the assessment order by holding that the assessment order passed by the A.O. is prima facie erroneous in so far as it is pre-judicial to the interest of the revenue. The main objections of the Ld. CIT are as under:- (i) the office and administration expenses includes the expenditure of Rs.1,21,179/- which in respect of professional services in connection with the issue of shares rendered by the following parties:- a) Gopi Pvt Ltd. b) Epitome Communiqué Pvt Ltd. Rs.72,149/- c) The Epitome Rs.15,000/- d) Sunil Maheshwari Rs.15,000/- e) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rs.1,00,000/- Total Rs.9,60,000/- The Ld. CIT has held that the said expenditure cannot be allowed as it has incurred for infraction of law. (vi) As per Tax Audit report, the A.O. has allowed the prior period expenditure of Rs.48,000 (net) which pertained to the previous year. The Ld. CIT had noted that the A.O. should have obtained the prior period expenses (gross) and disallowed the same accordingly. The assessee filed the reply which has been dealt with by the Ld. CIT in the order from Para 3.1 to 3.6. 4. Now, the assessee has challenged the order u/s. 263 of the I.T. Act before us. 5. In respect of the first issue regarding the legal and professional charges of Rs.1,21,179/-. The Ld. Counsel submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued that so far as the expenses under the "register and share transfer charges" of Rs.3,26,791/- are concerned, the same is in respect of the performing various services as under:- i) For acting share transfer agent; ii) custom duty fees; iii) data processing charges; iv) dividend processing; v) consistency in distribution of annual reports to the shareholders vi) Compiling on the annual periodical of SEBI and Stock exchanges. 8. It is therefore pleaded that this is not the one time expenditure but is recurring in nature and paid from year to year. So far as the listing of fees of Rs.65,000/- is concerned, it is argued that the said amount is paid to Bombay stock Exchange (BSE) which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... newspaper for the issue of the warrant marketing and public relations expenditure, expenditure on the feasibility study for expansion and diversification etc cannot be treated as expenditure having any nexus with the issue of share capital cannot be disallowed. Hence, we modify the order of the Ld. CIT to the extent of Rs.70,000/- which has a direct expenditure related to the issue of the preference share. 12. So far as the legal and professional charges are concerned, as per the details filed by the assessee before the Ld. CIT, the said charges paid in respect of the professional fees paid to Chartered Accountants for attending the different income-tax matters and also in respect of remuneration for statutory and tax audit. In our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication, more particularly, in the proceedings u/s.263 to direct the A.O. to verify and then to allow. So far as the issue of the custom redemption find and custom penalty is concerned, the Ld. CIT has referred to the order of the Customs Excise and Service-tax Appellate Tribunal (West Zone) (CESAT) Mumbai. The Ld. CIT has made the detailed discussion on this issue. It appears that the redemption fine and penalty has been confirmed by the CESAT. In our opinion, the CIT is rightly considering the said expenditure for exercising the jurisdiction u/s.263. 13. The next issue remains regarding the claim of Rs.48,000/-, which pertains to earlier year. The Ld. CIT noted that the sum of Rs.39,079/- has been debited on account of difference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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