TMI Blog2015 (10) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... e deduction of tax in respect of very same expenditure. However, it appears that the AO has not examined this aspect of deduction of tax at source by holding company in respect of expenditure which requires deduction of tax at source under the provisions of Chapter XVII. In the interest of justice and fair-play, we restore the appeal back to the file of the AO with a direction to verify the deduction of tax at source in terms of provisions of Chapter XVII, Part B and if the AO found that taxes have already been deducted at source in respect of expenditure which requires deduction of tax at source by the holding company while making payment, no disallowance can be made with reference to such expenditure in the hands of the assessee while rei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P L account on account of Shared Services cost under the head Operating and Administrative Expenses . The AO observed that there is a service agreement between assessee ASK Wealth Advisors Pvt. Ltd. and its associate company. The assessee had shared service cost towards administrative, financial and infrastructure support and management for sharing of cost incurred thereon. The AO further observed that assessee company has already been expending a huge amount of expenditure under different heads, then for what again they are paying for shared service charges. As per the AO since the offices of both the companies are at different floor, the feasibility of sharing of any resources become not only inconvenient but also impractical at every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee liable once more for deduction of tax at source will amount to double deduction of tax in respect of same payment. 4. On the other hand, the contention of the learned DR was that against turnover of ₹ 1.90 crores, the assessee has already debited similar expenditure of ₹ 14.27 crores on advertisement and business promotion, recruitment charges, salaries, bonus and rent for the local premises paid to another group company namely ASK Investment and Finance Consultants Ltd., therefore, the additional share of expenditure in the form of reimbursement of ₹ 1.34 crores was unreasonable and unjustified. Furthermore, as per Ld. DR, since assessee has not deducted tax at source, the lower authorities were justified in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that claimed by the assessee but not verifiable from the facts on record. So far as reasonableness of expenditure incurred by the assessee is concerned, we found that the AO has not considered the fact that assessee was incorporated and started its operation only in the A.Y.2007-08 and, therefore, during the year under consideration, the Revenue was not very large, whereas it has to incur large cost to establish itself in the market. The assessee has incurred expenditure so that people can know it in the market and its services and get business which could earn its revenue. The holding company has rendered services to the assessee company for which it has incurred expenditure and the assessee has reimbursed the expenditure on actual basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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