TMI Blog2018 (11) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid for support services and infrastructure charges. Thus, the major expenses relate to these ‘support services charges’ from where assessee was running its office. If the service has been rendered as per the ‘work order’ and assessee has incurred the expenditure in the course of its business, then such an expenditure cannot be disallowed simply on the ground that payment has been made to a sister concern or there was no necessity for incurring such expenditure or it does not have much infrastructure in the form of fixed assets. Once it has been brought on record that M/s. GRPL has taken a lease on rent and also maintaining the office, who in turn is providing such office space and other infrastructure facilities to the assessee, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted that under fixed assets schedule , M/s. GRPL has assets only for sum of ₹ 6,86,953/- out of which the value of car alone was ₹ 4,45,000/- and balance for furniture, computer and equipment. Thus, the said company was not maintaining sufficient infrastructure to provide support services to the assessee company. He has also noted down the following facts before disallowing the said expenditure claimed:- i. On perusal of balance sheet of M/s Geowork Realty Pvt. Ltd (GRPL), it is seen that under fixed asset schedule, company is having assets for ₹ 6,86,953/- and out of these value of car is ₹ 4,45,102/-, furniture for ₹ 13,500/-, computer for ₹ 1,32,1601-, office equipment for ₹ 95,6911-.There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has disallowed the entire claim of the assessee. 3. Before the Ld. CIT (A) the assessee placed the entire material and facts on record and pointed out that M/s. GRPL has taken premises on lease from another company, M/s. NCPL Developers Pvt. Ltd. to whom M/s. GRPL is paying rent and there is a separate agreement for maintenance with other company, M/s. Matrix Infosot Pvt. Ltd. the GRPL has raised invoices and assessee is utilizing various services as incorporated in the assessment order and TDS has also been deducted on such payment. Therefore, it cannot be held that expenditure is not genuine. 4. Ld. CIT (A) held that M/s. GRPL is a group concern and looking to the infrastructure it was not in a position to provide services to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 It is also includes day to day tea, snacks and other. misc. expenses borne by GRPL 8. Fee:Rs: 60,000/- + Service Tax as applicable. 9 Confidentiality: Both the parties are agreed that they will not disclose any of the terms .and condition of this work order to the other party or its representatives or affiliates without the written consent of M/s HPL Infrastructure Pvt. Ltd 10 Resolution of Disputes: In case of any conflict, terms conditions of work under the jurisdiction wilol be held in Delhi office and decision of Authorized Signatory will be binding. 5.1 In purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was running its office. If the service has been rendered as per the work order and assessee has incurred the expenditure in the course of its business, then such an expenditure cannot be disallowed simply on the ground that payment has been made to a sister concern or there was no necessity for incurring such expenditure or it does not have much infrastructure in the form of fixed assets. Once it has been brought on record that M/s. GRPL has taken a lease on rent and also maintaining the office, who in turn is providing such office space and other infrastructure facilities to the assessee, then it cannot be held that it is a make believe arrangement, unless any contrary material is brought on record or any inquiry has been done from M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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