TMI Blog2018 (9) TMI 2088X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition in the past, it is not open for the Revenue to take a entirely contrary or different stand in a later year on the same issue, involving identical facts unless and until a cogent case is made out by the Assessing Officer on the basis of change in facts Payment of indemnity insurance expense - Proof of allowable business expenditure - HELD THAT:- As decided in own case [ 2018 (7) TMI 2052 - ITAT KOLKATA] the expenditure on professional indemnity insurance has been incurred wholly and exclusively for the purpose of business and is an admissible deduction. That being so, we decline to interfere with the order of Id. C.I T.(A) deleting the aforesaid addition. Revenue appeal dismissed. - ITA No. 651/Kol/2017 - - - Dated:- 28-9-2018 - SHRI S. S. GODARA, JM AND DR. A.L. SAINI, AM For the Appellant : Shri A. Bhattacharjee, Addl. CIT For the Respondent : Ms. Pooja Jain, Ld. AR ORDER Per Dr. A. L. Saini: The captioned appeal filed by the Revenue, pertaining to Assessment Year 2012-13, is directed against an order passed by the Ld. Commissioner of Income Tax (Appeals)-6, Kolkata, in Appeal No.59/CIT(A)-6/Kol/15-16 dated 10.01.2017, which in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material available on record, we note that, so far as the case before us is concerned, the assessee paid an amount of Rs. 48,95,212/- to DHS, Mumbai. It is the claim of the assessee that payment was its share of subscription allocated to various Indian entities of a common global network on the basis of the revenue by DHS, Mumbai, of which the assessee is a member. The total subscription is paid by DHS, Mumbai after deduction of tax at source (TDS) to DTT towards utilization of common knowledge systems, common information technology systems and better access for clients of uniform and high quality services by the Indian members of the network. The assessee s contribution/share of Rs.48,95,212/- comprised it share of Rs.31,86,534/- for the relevant previous year and differential share of Rs.17,08,679/- paid for the earlier years being the difference between the contribution payable on the basis of the revenue and contribution already paid earlier for those years and was claimed in line with the cash system of accounting followed by the assessee. The assessee produced debit notes issued by DHS, Mumbai as supporting evidence. The assessee has to pay subscription fees through Delloite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Coordinate Bench of ITAT Kolkata in the case of DCIT vs. Ernst Young (P.) Ltd. [2014] 49 taxmann.com 386 (Kolkata Trib.) upheld the same principle on the identical issue under consideration, wherein it was held as follows: The two concerns, namely, EYGS LLP and Ernst and Young U.K. LLP, were set up by member firms of Ernst and Young for providing resources to obtain best methodologies at a lower cost which in the present days of globalization is imperative for any professional firm. Development of such methods by any one concern would have been cost prohibitive apart from lacking uniformity and mutual compatibility. Accordingly, arrangement was arrived at for such services to be developed in a pool by the said two concerns to which the member firms would have access to it and reimbursing their respective shares of cost incurred therefor. Such reimbursement was agreed on the basis of respective turnover of the member firms. These facts are not denied by the revenue and these are reimbursement of expenses. Once these are reimbursement of expenses, the assessee is not liable to deduct TDS u/s 195. Accordingly, the order of the Commissioner (Appeals) is to be confirmed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the network in India and the rent was paid by DTTIPL to Rent Works India (P) Ltd. after deduction of tax at source at the applicable rate. The AO has held that tax was deductible at source presuming that the assessee had obtained the laptops on rent from DTTIPL which is not correct and cannot be inferred on the basis of the facts on record. Therefore, the assessee had reimbursed its share of the rent for the laptops to DTTIPL. In view of the legal position governing such reimbursement of expenses discussed in connection with reimbursement of subscription fees in para 11 of this order, no tax is deductible at source on such payments. Moreover, we note that that a similar deduction on account of rent of Rs. 16,89,928/- reimbursed to DTTIPL was claimed and allowed by the AO in scrutiny assessment for the A.Y.2008-09. We note that it is a well settled legal position, as discussed by ld CIT(A) also that factual matters which permeate through more than one assessment year, if the Revenue has accepted a particular view or proposition in the past, it is not open for the Revenue to take a entirely contrary or different stand in a later year on the same issue, involving identical facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the outset itself, it was pointed out that the said issue is covered by the judgment of the Coordinate Bench in assessee s own case in ITA No.587 588/Kol/2016 Assessment Years 2010-11 2011-12 whereby the Tribunal has deleted the addition made by the Assessing Officer on identical issues. The relevant para of the order of the Tribunal is given below: 20. We have given a careful consideration to the rival submissions and perused the materials available on record, we note that like any other insurance premium, the assessee has paid it to cover itself against loss arising out of damages etc. claimed from it in consequence of wrongful act in connection with professional business. Therefore, the assessee is not insured for unlawful acts or acts opposed to public policy or law. The fact that the policy has to be renewed every year by paying renewal premium precludes any enduring benefits resulting from the policy and the payment of the premium is clearly to cover losses to the business. Thus, the expenditure on professional indemnity insurance has been incurred wholly and exclusively for the purpose of business and is an admissible deduction. For that we also rely on the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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