TMI Blog2011 (12) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... n such a case the explanation to section 37a would not apply. Accordingly, when the payment made on violation of bye-laws cannot said to be payment of any infraction of law and cannot be disallowed. - ITA No. 6391/Mum/2009 - - - Dated:- 30-12-2011 - SHRI T R SOOD , AM AND SHRI VIJAY PAL RAO, JM Assessee by Sh Ajay R Singh Revenue by Sh V V Shastri ORDER: This appeal by the revenue is directed against the order dated 16.9.2009 of the CIT(A) for the AY 2006-07. 2 The revenue has raised the following effective grounds in its appeal: 1. On the facts and circumstances of the case and in law, the Ld.CIT (A) has erred in deleting the addition of ` 69,45,623 made u/s. 40(a)(ia) holding that as per the CBDT s Circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng provisions of sec. 40(a)(ia) of the I T Act. The assessee contended before the Assessing Officer that this amount is only reimbursement of the actual expenditure to ISE, which is the holding company of the assessee and when this is reimbursement of the actual expenditure incurred by the holding company, then no tax is required to be deducted u/s 194C/194J of the Act. The Assessing Officer did not accept the contention of the assessee and disallowed the amount. 3.2 On appeal, the CIT(A) noticed that the assessee has produced the evidences to show that separate monthly bills are raised with respect to various expense that are shared between the assessee and its holding company ISE. He has referred the CBDT circular no.715 of 8.8.1995 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as aforesaid, the party of the Second Pert shall pay and reimburse to the party of the First Part, the actual expenses borne/incurred by the party of the First Part for the same. In the case of any fixed asset belonging to the party of the First Part and used by the party of the Second Part under this Agreement, the reimbursement shall be the actual depreciation charged in the books of the party of the First Part. 5 The party of the First Part shall intimate the party of Second Part in writing the details of the actual costs/charges and the party of the Second Part shall pay reimburse the same to the party of the First Part on a monthly basis or in such manner as may be mutually decided from time to time and within such time as may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance Energy Ltd. and not a pure reimbursement of expenses. Respectfully following the decision of the Hon ble jurisdictional High Court (supra), we decide this issue in favour of the assessee and against the revenue. 5.3 When there is a decision of the jurisdictional High Court, which has been followed by the coordinate bench of the Tribunal; therefore, to maintain the rule of consistency, we decide this issue in favour of the assessee and against the revenue. Accordingly, the order of the CIT(A) is upheld on this issue. 6 Ground no.2 is regarding disallowance of penalty of ` 6,12,511/- for violation of bye laws of Stock Exchange. 7 We have considered the rival contention and considered the relevant material on record. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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