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TMI Blog2009 (10) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... license fee in respect of premises at 42, Vasant Lok, Vasant Vihar, New Delhi taken on license. In addition to the license fee paid in respect of the aforesaid premises, the appellant had also claimed business expenses paid @ Rs. 1,41,000/- per month to M/s Raas Consultants & Company for purported consultancy services in connection of running of aforesaid music shop. M/s Raas Consultants & Company is the sole proprietorship concern of Mrs. Hina Jetha. She is the wife of Mr. Vimal Jetha who is the landlord/owner of premises no. 42, Vasant Lok, Vasant Vihar, New Delhi. 2. The Assessing Officer, in order to ascertain as to whether any consultancy service was provided by Mrs. Hina Jetha, sent notice to her. However, she did not respond and di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has, however, reversed the aforesaid decision of the CIT(Appeal) and restored the orders of the Assessing Officer. The ITAT had observed that in the license agreement dated 2nd July, 2001 there is no stipulation that the said agreement will be subject to entering into an agreement with Mrs. Hina Jetha for consultancy services. Since, it is a fact that Mrs. Hina Jetha had not rendered any service to the Assessee, the expenditure incurred cannot be allowed as business expenditure. The following observations of the Tribunal in this respect are worth a note: "Accordingly, in our considered view, the ld. CIT(Appeals) has wrongly concluded that the consultancy charges were in the nature of rent and the assessee was forced to enter into second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the real nature of the consultancy agreement entered into between the Assessee and M/s Raas Consultancy Services. He reiterated the submission made by the Assessee before the Tribunal as well as CIT (Appeal). Learned counsel further submits that CIT (Appeal) had rightly concluded that in reality it was an agreement for payment of rent which was clear from the terms of the agreement, inasmuch as this agreement was co-terminus with the license agreement and the Assessee was forced to enter into such an agreement with the purported consultants, at the instance of the licensor of the premises namely Mr. Vimal Jetha. He also relies upon the judgment of the Supreme Court in the case of Sassoon J. David and Co. P. Ltd. vs. Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- (Rupees One lac forty one thousand only) for each month, during the subsistence of the Agreement. The said consideration shall be paid to M/s Raas Consultants & Co. on or before the 7th day of each English calendar month. 3.2 All fees payable under this Agreement shall be made net of applicable withholding tax (s) and made at the times specified in this Agreement." 7. On going through the agreement, it is clear that the consultants had agreed to provide consultancy services in connection with the administration and management of the showroom. The appointment was in connection with the running of the music shop on the terms and conditions as set out in the said agreement. Thus, the Assessee was required to make the payment for the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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