9911796707
TMI Blog2014 (6) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax (Appeals) - 21 [hereinafter referred to as 'CIT(A)'] erred in confirming the disallowance amounting to Rs.210,000 under section 14A of the Income-tax Act, 1961 ('the Act') on the grounds that the amount of disallowance is attributable to administrative and managerial expenses towards investment activity for earning exempt income. Ground No.2 : Market Support Services - Rs. 41,58,078 On the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the disallowance of Market Support Services amounting to Rs.41,58,078 under section 40(a)(ia) of the Act. Further, the learned CIT(A) has also erred in upholding the said disallowance on the ground that the Appellant has failed to explain that the said payment was made wholly and exclusively for the purpose of business. 2.1 Ground NO.1 relates to disallowance under section 14A r.w.r. 8D of the Income Tax Act,1961 (the Act). It is an undisputed fact that dividend income of Rs.15,76,758/- is includable exempt income in the income of the assessee. During the assessment proceedings the AO invoked provisions of the rule 8D of the I T Rules, 1962 and accordingly, AO made disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose names appear on the tax invoices and the nature of services rendered by them to the so called company. The AO shall grant reasonable opportunity of being heard to the assessee as per principles of natural justice. The AO shall also admit evidences if any in support of the submissions to be made by assessee during the proceedings. Accordingly, this ground is allowed for statistical purposes. In the result, appeal of the assessee is partly allowed for statistical purpose. II. ITA No.2843/Mu,/2011, A.Y 2006-07: Revenue's Appeal: 4. Grounds raised by the Revenue in this appeal read as under: 1(i). On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the mutual fund scheme expenses of Rs.2,20,17,000/- was an allowable business expenditure in the hands of the assessee company. 1 (ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the expenses of Rs.2,20,17,000/- was incurred on behalf of ING Mutual Fund and could not be treated as the expenses of the assessee company. 1 (iii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be booked to the accounts of the assessee. As per the assessee's counsel, this issue should be allowed in favour of the assessee considering provisions of subsection (5) of section 52 of the Act and other decisions in force. 4.2 Before us Ld. CIT-DR draw our attention to certain erroneous assumption of the Ld. CIT(A) that requires rectification. On perusal of the said provision of sub-section (5) of section 52 of the SEBI Regulations we find that the same reads as under: "(5) Any expense other than those specified in sub-regulations (2) and (4) shall be borne by the asset management company (or trustee or sponsors)" Like the one above, there are other residual provisions in the said section 52 of the said Act that provides and enables the AMC like the present assessee to bear the expenditure in excess of the said 6% limitation. Considering the above enabling provision for debiting the expenses above 6% limitation provided under SEBI Rules, we are of the opinion that the relief granted by Ld. CIT(A) does not call for any interference. In addition and in substance, the decisions which were cited by Ld. Counsel, helps the assessee. In view of the above, Ground No.1 raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue for fresh decision in the light of the order in the case of Amway India Enterprise, 111 ITD 112 (Del)(SB). To the extent such expenditure is claimed in this year also, accordingly, the same are set aside with identical directions. a. Referring to the contents of para 6.3 of the impugned order the Ld. Counsel mentioned that there are other expenditure such as IT infrastructure support expenses and the same needs to be allowed in favour of the assessee considering the decision of the AO in the assessment year 2008-09 in assessee's own case. He mentioned that , despite the similarity of the expenditure, the AO did not make any disallowance on this account and filed a copy of the order of the AO dated 30/11/2010. In our opinion the addition on this account deserves deletion of such expenses in this year also considering the homology of the facts. b. Regarding other expenses appearing in the table at para 6.3, both the parties agreed that these expenses have to be examined by the AO and after examining the nature of the expenses and the business connectivity. On perusal of the orders we find that there is no specific discussion appearing in the orders of the lower authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 14A of the Act on the grounds that the amount of disallowance is attributable to administrative and managerial expenses towards investment activity for earning exempt income. The Appellant prays that the learned CIT(A) be directed to delete the said disallowance. Ground No.5 : Allocated Regional Overheads - Rs.19,04,521 On the facts and circumstances of the case and in law, the learned CIT(A) erred in disallowing the Allocated Regional overhead expenses amounting to Rs. 19,04,521 on the grounds that there is no discussion of the same being disallowed in the assessment order for AY 2006-07. The Appellant prays that the learned CIT(A) be directed to delete the said disallowance." 7.1 Ground No.1 relates to the disallowance on "Market Support Services" under section 40(a)(ia) of the Act. On facts this ground is similar to the one adjudicated by us vide Ground No.2 of assessee's Appeal in ITA No.2854/Mum/2011 for A.Y 2006-07. Detailed discussion is provided in the paragraphs above. Accordingly, this ground of the assessee is allowed for statistical purposes. 8. Ground No.2 relates to disallowance of "Office Licence Fee" under section 40(a)(ia) of the Act. In this regard, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Mutual Fund Scheme expenses holding that the expenditure claimed by the assessee was allowable as business expenditure. 3.(i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of foreign travel expenses of Rs.25,02,944/- on the ground that the expenses were incurred for meetings held outside India by the assessee company for promoting its business. (ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that in the course of the assessment proceedings, the assessee was not able to prove the commercial expediency of the foreign travel expenses and the Assessing Officer should have been allowed an opportunity to examine the contention of the assessee that the details of the foreign travel expenses including the names of persons who traveled, place of travel and purpose of travel was given in the course of the assessment proceedings and the expenditure was incurred for promoting the business of the assessee. 4. On the facts and in the circumstances of the case and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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