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TMI Blog2013 (12) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 46,11,658/- made by Assessing Officer on account of professional and consultancy fee. 2) The Ld. Commissioner of Income Tax (A) erred in law and facts of the case in deleting the addition of Rs. 2013366/- made by the Assessing Officer on account of advertisement and sales promotion. 3) The appellant craves leave to amend, modify, alter or forego any ground of appeal at any time before or during the hearing of this appeal. Apropos ground no. (1) 3. During the assessment proceedings assessee was asked to submit the details of legal and professional fee paid and TDS deducted thereon. The details filed by the assessee contained following expenses claimed as revenue expenses. i) Payment to Control Risk Group Rs. 48,87,931/- ii) Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer ignores the nature of business of the assessee. He observed that assessee was undertaking this exercise as part of its service agreement with its parent company. Secondly, every due diligence undertaken in respect of potential target hotels may not result in actual business. Thus, Ld. Commissioner of Income Tax (A) held that the conclusion drawn by the Assessing Officer to hold that this expenditure as capital in nature cannot be sustained. However, Ld. Commissioner of Income Tax (A) held that assessee has failed to deduct the TDS in respect of amount of Rs. 17,18,069/- paid to M/s Control Risk Group and the same was liable to be disallowed. 4.1 As regards consultancy fee for office space. Ld. Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Group, Singapore would create reliable data base for use in future, thereby providing enduring benefit to the assessee is not sustainable. Assessee has undertaken all these activities as part of its services agreement with its parent company. Thus, we agree with the Ld. Commissioner of Income Tax (A) that the conclusion drawn by the Assessing Officer that these expenses are capital in nature cannot be sustained. 7. As regards the issue of treatment of brokerage paid for obtaining office space and treatment of the same as 80% being capital expenditure, we find that Assessing Officer's case has no cogency. The brokerage has been paid for arranging the office space. It is not the case that the premises is purchased during the year. It was onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd beyond the year under consideration. He found that there is no element of brand building or acquisition of a brand by incurring such expense. He further observed that Assessing Officer's other allegation is that the brand name "Inter-continental" and "Crown Plaza" are owned by the assessee and therefore, by incurring expenditure on advertisement, the brand value is being enhanced. Ld. Commissioner of Income Tax (A) observed that this not true because the brands are in fact owned by the overseas group entity, which separately claims royalty for grant of such licence of brands at different managed hotels. Moreover, he observed that even this expenditure of advertisement and sales promotions has been reimbursed by the overseas group entity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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