TMI Blog2018 (4) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... existence, and nothing else which is required u/s 68 of the Act - remit this issue also to the file of the AO with a direction to reconsider the issue in the light of the evidence filed by the assessee in support of the investment made by the four companies in the assessee’s company. - ITA No.1690/Hyd/2016 And ITA No.150/Hyd/2017 - - - Dated:- 11-4-2018 - Smt. P. Madhavi Devi, Judicial Member And Shri B. Ramakotaiah, Accountant Member For The Assessee : Shri Laxmi Nivas Sharma For The Revenue : Smt. N. Swapna, DR ORDER Per Smt. P. Madhavi Devi, J.M. Both are cross appeals by the assessee as well as the Revenue against the order of the CIT (A)-4, Hyderabad, dated 1.11.2016. 2. Brief facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofessional Consultancy fee the assessee has debited an amount of ₹ 13,78,234 and from the details furnished by the assessee, the AO observed that the assessee has paid a sum of ₹ 6.00 lakhs to Smt. Madhuri S. Pitti towards business administration consultancy fee for the year from which TDS of ₹ 60,000 was also made. Observing that she is a family member of the promoter, he invoked provisions of section 40A(2)(b) and observing that the assessee could not substantiate the necessity of such charges and the nature of the services rendered by Ms. Pitti, he disallowed the said sum and brought it to tax. 4. Further, the AO also observed from the annexure to the 3CED report, that there was an increase in the paid up share cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal charges paid to Smt. Madhuri S. Pitti, a specified person u/s 40A(2)(b) of the I.T. Act, 1961 without considering the legitimate need of business and service to the company and her experience . 5. The learned Counsel for the assessee, submitted that Smt. Madhuri S. Pitti was a person with wide business experience and has rendered services to the assessee which have been detailed in her business profile submitted before the CIT (A). He therefore, justified making payment of ₹ 6.00 lakhs to her and prayed for deletion of this addition. 6. The learned DR however, submitted that these details were not furnished before the AO or before the CIT (A). 7. Having gone through the submissions of both the parties, we find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Coordinate Bench in the case of Pratista Industries Ltd vs. DCIT in ITA No.1302/Hyd/2015 dated 29.4.2015 to delete the disallowance on this ground. The Hon'ble Delhi High Court in the case of Cheminvest Ltd reported in (2015) 378 ITR 33 (Del.) and the Hon'ble Madras High Court in the case of Redington (India) Ltd vs. Add. CIT in T.C.A.No.520 of 2016, dated 26th June, 2015 have held that the disallowance 14A cannot be made where there is no exempt income during the relevant A.Y. Therefore, we see no reason to interfere with the order of the CIT (A) on this issue. 10. As regards the deletion of the addition of ₹ 1,85,00,000 u/s 68 of the Act, we find that the CIT (A) has deleted the same by accepting the contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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