TMI Blog2011 (11) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... or not the Commissioner (Appeals) was justified in deleting the addition of ₹ 7,35,73,500 in respect of one time sign off bonus amount reimbursed to the assessee from its associated enterprises in London, namely Man Financial. Learned representatives fairly agree with this proposition. However, we deem it appropriate to place on record rather elaborate arguments, as raised by the Assessing Officer in the memorandum of appeal, as follows: 1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in accepting the additional evidence in the form of communication between the assessee company and Man Financial (UK) vide letters dated 21.02.2006, 24.02.2006 and 27.02.2006, without affording an opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n during the relevant year. 6. On the facts and in the circumstances of the case and in law, the learned CIT(A) also failed to appreciate that timing of payments does not reflect normal practice since payments were made to employees much after the receipt of amount. 3. Briefly stated, the relevant material facts, as culled out from material before us, are as follows. The assessee is engaged in the business of risk management and advisory services and is a part of world-wide operations of Man Financial Group. When the income tax return filed by the assessee was taken up for scrutiny assessment proceedings, it was apparently noticed that the assessee has received an amount of ₹ 7,37,73,500 from one of its associated enterprises bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer further noted that while the said amount was received by the assessee company on 31st March 2006, the related payments were made in April 2006 and May 2006. He also observed that the assessee has failed to furnish the details of the persons who were paid the sign off bonus, (whether they) were its employees and what was their qualification and whether their terms of payments warranted such huge sign off payments . The Assessing Office further highlighted that the one time sign off payment was not justified and observed that the assessee company had already employed these persons since inception of the company and hence they would have drawn up employment contract with the person whom they classify as key personnel and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that the determination of arm s length price is not applicable since no service has been rendered in the above transaction . The assessee did not, therefore, receive the money as of income nature. The amount was received with an obligation to pay over the same to specified persons, and there is no dispute that the assessee appropriated any part of these receipts as its own income. The amounts were paid over, on behalf of the associated enterprise, and no part of the amount was retained by the assessee. The routing of this money through the assessee was a matter of convenience, and the money was not received by the assessee, in its own right or for its unfettered use. Under these circumstances, as the learned CIT(A) rightly concluded, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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