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TMI Blog2023 (9) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the business of contracting for integrated intelligent building automation management systems and providing integrated facilities management, real estate management, engineering services and trading in air conditioning equipment and chillers. Assessee is a wholly owned subsidiary of M/s. Johnson Controls INC., US. 3. Business of assessee was divided into two segments, i.e., Centre of Excellence in Engineering segment and the Project and Services segment. 4. For the AY 2008-09 assessee had shown income of Rs. 73,79,40,723/- from Global Works Space Solutions (GWSS). Against this income assessee claimed an expenditure of Rs. 62,84,30,804/- being purchase of materials at Rs. 4,26,62,644/- and Labour and Sub-contractor's expenses at Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the ITAT this appeal is preferred by the Revenue and the following three questions of law are proposed: "6.1 "Whether on the facts and circumstances of the case and. Law, the Hon'ble Tribunal is justified in deleting the addition in respect of disallowance of expenditure of Rs. 6,28,43,080/- being 10% of expenses in relation to facilities management, when the Hon'ble ITAT ignored the fact that the Assessing Officer had examined the issue minutely by issues of notices u/s. 133(6) of the Income Tax Act, 1961 whereby only few replies were received and the onus of proving genuineness and veracity of the transactions lies upon the assessee, which it failed to do so?" 6.2 "Whether on the facts and circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the course of DRP proceedings. In the background of these facts, the ITAT took a considered view that when assessee has, in compliance with the directions of the AO, placed on record substantial material that is complete party-wise details of purchases and labour expenses exceeding Rs. 10 Lakhs amounting to a total of Rs. 55 Crores approximately, which worked out to about 89% of the total expenses and also furnished copies of invoices of Rs. 82,22,049/- for verification on sample basis, the AO was not correct in disallowing an ad hoc 10% of the expenses. The ITAT held that the assessee having substantiated almost 89% of the expenses claimed, in view of the large transactions involved, the AO was not justified in making a disallowance. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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