TMI Blog2021 (12) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... permanent basis to them - HELD THAT:- Assessee had always pleaded that these technicians had possessed requisite skill sets and the assessee had been using their services on hire basis as and when there is a requirement instead of providing employment on a permanent basis to them. AO identified eight parties to be produced before him in the remand proceedings and they were all produced by the assessee along with their affidavits before the ld. AO. These parties are listed in page 3 of the ld. CIT(A) s order. Apart from this, the assessee also furnished the chart showing the details of sales / service charges received, consultancy charges claimed, consultancy charges allowed and consultancy charges disallowed by the ld. AO from A.Yrs. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Revenue by: Shri Mehul Jain ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.187/Mum/2020 for A.Y.2006-07 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-21, Mumbai in appeal No.CIT(A)-21/ITO-12(3)(3)/IT-703/2015-16 dated 20/03/2015 (ld. CIT(A) in short) against the order of assessment passed u/s.254 r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 20/03/2015 by the ld. Income Tax Officer, 12(3)(3), Mumbai (hereinafter referred to as ld. AO). 2. The only effective issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in sustaining the disallowance of ₹ 44,77,661/- on account of consultation fees on an adhoc basis in the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o these consultants were duly made through regular banking channels only. The assessee furnished the month wise details of total consultancy charges paid together with the complete list of consultants, their addresses, the period for which such consultancy services were rendered by them, the details of the customer location where the concerned consultants had rendered their services, the gross amount of consultancy charges, TDS component thereon, net amounts paid together with the details of bank accounts of the concerned consultants before the lower authorities. The assessee also parallelly gave the month wise details of receipts of sales maintenance / support services pursuant to rendering of services by the consultants hired by it. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not traceable, the circumstantial evidence, phenomenal increase in turnover and profit before tax of the assessee, evidence of services rendered, payments made through regular banking channels etc., outweigh the conclusions drawn from the traceability of parties for some reason or other and cannot be rejected outrightly. Having stated so, the ld. CIT(A) strangely restricted the disallowance to 50% of the total consultancy charges as against 80% made by the ld. AO. Aggrieved by this, the assessee is in appeal before us. 3.1. We find from the undisputed facts stated by the assessee before the lower authorities that assessee is a small scale company dealing in computer software and allied services for information technology. To withstand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nally gave a remand report dated 27/09/2019 reiterating the earlier submissions. In the said remand report, the ld. AO also admitted that the affidavits have been received from certain consultants. The assessee duly filed rejoinder to the said remand report of the ld. AO before the ld. CIT(A). The assessee also pointed out that the ld. AO identified eight parties to be produced before him in the remand proceedings and they were all produced by the assessee along with their affidavits before the ld. AO. These parties are listed in page 3 of the ld. CIT(A) s order. Apart from this, the assessee also furnished the chart showing the details of sales / service charges received, consultancy charges claimed, consultancy charges allowed and consult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 09 40,75,58,064 80,63,139 80,63,139 NIL 3.3. From the aforesaid chart, it could be seen that the ld. AO had sought to disallow the consultancy charges on an estimated basis only during the year under consideration and no disallowance was made either in earlier years or in subsequent years. Hence, even going by the rule of consistency as upheld by the Hon ble Supreme Court in the case of Radhasaomi Satsang reported in 193 ITR 321, when there is no change in the facts and circumstances of the case, the Revenue is not bound to take a divergent stand during a particular year alone. Admittedly, the modus operandi practiced by the assessee had not changed in hiring of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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