9911796707
TMI Blog2016 (7) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act could be made in the facts and circumstances of the case. 3. The brief facts of this issue is that the assesseee is engaged in the business of management consultancy, trading and investment activities. During the previous year 2009-10 relevant to the assessment year under appeal, it derived income from management consultancy services to the tune of Rs. 2,40,00,000/- and debited various expenses incurred for the purpose of such business. The Learned AO from the profit and loss account and balance sheet of the assessee and the income computation observed that out of the total assets of the assessee, it has substantial amount of investment in shares from which it had earned considerable dividend income and accordingly sought to invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid services in order to derive its management consultancy income of Rs. 2,40,00,000/-, whereas the Learned CITA erroneously applied the same in the reverse direction by holding that the aforesaid services were provided to the assessee company for its investment decisions and accordingly held that the consultancy charges debited in its profit and loss account to the tune of Rs. 1,96,48,885/- is meant only for investment activities of the assessee. Accordingly, the Learned CITA differed from the view taken by his predecessor on this issue in Asst Year 2009-10 in favour of the assessee wherein consultancy charges paid were meant only for consultancy business of the assessee and not for investment decision with corresponding impact on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd or grounds at or before the time of hearing." 5. The Learned AR filed the details of head wise income and related expenses incurred for earning such income in a tabular form in the paper book. He filed the details of direct expenses incurred for earning management consultancy income(taxable income) and common expenses incurred for both taxable and nontaxable income. He argued that at the most only the common expenses could be apportioned between taxable and non taxable income for making disallowance u/s 14A of the Act. In response to this, the Learned DR argued that the disallowance made by the assessee in the return is not in accordance with the statute and is only on an adhoc basis and accordingly prayed for non-interference in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely preceding asst year 2009-10, the Learned CITA had given a direction to the Learned AO to recalculate the disallowance of expenses made u/s 14A after reducing the direct expenditure of consultancy fees from the total expenses claimed by the assessee in the profit and loss account and thereafter restrict the disallowance of expenses maximum to the extentof balance expenses claim in the profit and loss account by the assessee. On further appeal by the revenue before this tribunal , the tribunal in ITA No. 635/Kol/2013 dated 29.10.2015 had dismissed the same and upheld the findings of the Learned CITA. 6.1. We find that the total expenses debited to profit and loss account is Rs. 2,28,25,154/- and out of this, direct expenses of consultanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
