TMI Blog2016 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... 971 (8) TMI 10 - SUPREME Court ), we are of the considered view that the assessee has received the Bills during the relevant assessment year and making the payment subsequently - Decided in favour of Assessee. Addition being legal and professional charges - Held that:- CIT(A) has rightly held that the commission paid could not be treated as capital expenditure, hence, we do not find any infirmity in the well reasoned order passed by the Ld. CIT(A) on this issue - Decided against revenue. Addition by treating the expenditure as capital expenditure - advertisement and promotion expenses - Held that:- The assessee was the original holder of publishing rights of the blender magazine. As per the JV agreement with Dennis Publishing, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that these bills were raised in F.Y. 2009-10 but the services were actually provided in the F.Y. 2008-09 and thus the liability was incurred in A.Y. 2009-1O? 2. Whether on the facts and circumstances of the case in law, the Ld. CIT(A) erred in deleting the addition of ₹ 1,10,300/-, made by the A.O. by treating the Legal and Professional Charges paid to M/s Consort Capital Pvt. Ltd. as Capital Expenditure, without appreciating the fact that the above expenditure was incurred in relation to the raising of private equity and thus was evidently a capital expenditure and claim of the assessee that it was a commission payment will not change the nature of payment? 3. Whether on the facts and circumstances of the case in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year under consideration and added back to the total income of the assessee company. 2.1 Secondly, an expenditure of ₹ 1,10,300/- has also been disallowed being capital in nature and added back to the income of the assessee. The Assessee has incurred these expenses on account legal and professional charges paid to M/s Consort Capital Pvt. Ltd. as upfront fees in raising funds through private equity. The AO treated these expenses as capital expenditure and added to the income of the assessee. 2.2 Thirdly the issue in dispute in the present appeal is regarding the disallowance of ₹ 2,16,78,914/- which the assessee has incurred on account of advt. and publicity expenses during the year under consideration which include &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to the assessee for 20.6.2016 and in response to the same, neither the assessee nor its Authorized Representative/Counsel appeared and nor filed any application for adjournment. Keeping in view of the facts and circumstances of the present case, we are of the view that no useful purpose would be served. Therefore, in the interest of justice, we are deciding the issue in dispute exparte assessee, after hearing the Ld. DR and perusing the records. 6. We have heard the Ld. DR and perused and considered the relevant records available with us especially the orders passed by the revenue authorities, we are of the considered view that the Ld. First Appellate Authority has deleted the addition of ₹ 17,66,407/- made by the AO on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal and professional charges to M/s Consort Capital Private Ltd. The assessee company had consulted M/s Consort Capital Private Limited for raising Private Equity from outsources or sale of shares. The AO had treated the payment of Legal and Professional Charges of ₹ 1,10,300/- to M/s Consort Capital as Expenditure of Capital nature. However, Ld. CIT(A) has held that since the expenditure is in nature of commission paid and cannot be treated as capital expenditure at par with the expenditure incurred during initial capital raised. In the background of the aforesaid discussions, we are of the view that the Ld. CIT(A) has rightly held that the commission paid could not be treated as capital expenditure, hence, we do not find any infirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Media Transasia Publishing Pvt. Ltd. for a sale consideration of ₹ 2.30 crore. We further find cogency in the observations of the Ld. CIT(A) that in the P L account for the relevant financial year, the amount of ₹ 2,30,21,,523/- was shown below the line which is taken as the profit on sale of fixed asset in the computation of income. Similarly, gain on sale of rights amounting to ₹ 2,24,23,100/- was offered in the computation income as short term capital gain. In view of the above, it was rightly held by the Ld. CIT(A) that disallowance of expenditure ignoring the income from selling of publishing right is not justifiable and addition was rightly deleted, which does not need any interference on our part, hence, we uphold t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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