TMI Blog2022 (10) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred the expenses for testing of the product. Therefore, the observation of Commissioner (Appeals) that the expenditure incurred is not wholly and exclusively for the purpose of business appears to be without verification of facts on record. In any case of the matter, it has been brought to our notice by the learned representative of the assessee, which has not been controverted by learned Departmental Representative, in the preceding assessment years, the revenue has never doubted the nature and character of the expenditure to be for the purpose of business. Accordingly, we delete the disallowance. Disallowance of management fee - Disallowance under dispute was made on the basis that assessee had not deducted tax at source. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to press ground nos. 4 and 6. 4. In view of the aforesaid, ground nos. 4 and 6 are dismissed as not pressed. 5. In ground no.5, assessee has challenged disallowance of testing and coordination expenses amounting to Rs.90,77,936. 6. Briefly, the facts are, assessee is a resident corporate entity and is a subsidiary of Intertake Holding UK. As stated by the assessing officer, assessee is engaged in the business of rendering testing and inspection services to its Indian and overseas clients. 7. In course of assessment proceedings, the assessing officer, while verifying the financial status of the assessee, noticed that assessee had debited an amount of Rs.1,79,00,563 to the profit and loss account under the head testing and coord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in various places, however, it doesn t have all the facilities to test a particular product. In such cases, assessee outsources those tests to its overseas group entities. He submitted, the overseas entities carry out the work on behalf of assessee and forward their reports. He submitted, for the job performed by the overseas entities, assessee makes the payment. Thus, he submitted, testing charges are wholly and exclusively in connection with assessee s business. He submitted, the coordination charges, are also wholly and exclusively in connection with the business activities of the assessee. He submitted, learned Commissioner (Appeals) has made the disallowance under Section 37(1) of the Act under a misconception that similar disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by the learned representative of the assessee, which has not been controverted by learned Departmental Representative, in the preceding assessment years, the revenue has never doubted the nature and character of the expenditure to be for the purpose of business. 14. In view of the aforesaid, we hold that the disallowance sustained by learned Commissioner (Appeals) is unjustified. Accordingly, we delete the disallowance of Rs.90,39,900. 15. In ground no.7, assessee has challenged disallowance of management fee. Briefly, the facts are, in course of assessment proceedings, the assessing officer noticing that the assessee had not deducted tax at source on payment of management fee, disallowed it under Section 40(a)(i) of the Act. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation on goodwill. 21. Before us, it is a common point between the parties that the issue has been decided in favour of the assessee in its own case in assessment year 2007-08. 22. Having considered the submissions of the parties, we find, identical issue arising in assessee s own case, in assessment year 2007-08 came up for consideration before the Tribunal in ITA No.5740/Del/2011. While, deciding the issue in order dated 26.07.2017, the coordinate Bench following the ratio laid down by the Hon'ble Supreme Court in case of CIT vs. Smifs Securities Ltd. allowed assessee s claim of depreciation on goodwill. 23. Considering the fact that this is a recurring issue which has been decided in favour of the assessee in earlier as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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