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TMI Blog2024 (5) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... er that 'payment made to Dr. Abhishek Shukla is salary in nature, not consultancy fee as claimed by the appellant company', the CIT(A) ought have allowed the same as 'business expenditure'." 3. The brief facts are that Assessee Company is engaged in the business of real estate development and construction services. The assessee has filed return of income u/s. 139(1) on 11/03/2022 declaring loss of Rs. (-)1,51,77,595/-. The case was selected for scrutiny through CASS under e-assessment Scheme 2019 for the reason "Large payments made under section 194J to persons who have not filed return of income in comparison to total payments on TAN corresponding to PAN in Form 26Q for section code 194J." On perusal of the details, the ld. AO noted that assessee has made payment of Rs. 40,11,200/- as 'professional fees' to Dr. Abhishek Shukla for business consultation. As per AO, in response to the notice, assessee did not submit any reply or furnidhed any acknowledgment of return of income, copy of ledger account and copy of bank statement in the case of Dr. Abhishek Shukla. Even the notice u/s. 133(6) dated 23/11/2022 and 07/12/2022 issued to Dr. Abhishek Shukla and served upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est the fairness and propriety of income assessed by the Assessing Officer. In this respect, the appellant relies on the following decisions:- xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx It is submitted that the Appellant had sent email to the A.O. as well as JAO on 22.12.2022 itself but the assessment order has been passed on 23.12.2022 without taking into account the details filed by the Appellant that were made available on record. It is needs to be noted that the A.O. had uploaded the notice dated 16.12.2022 directly on the portal without sending intimation to the Appellant via SMS or email. However, when the CA voluntarily checked the portal, he took cognizance of the notice uploaded on the portal and immediately on intimation thereof, the Appellant managed to send details via e-mail. However, the assessment order has been passed on 23.12.2022 without considering the details filed. As such the order passed by the A.O. is in violation of principles of natural justice and unlawful. It is apparent from the assessment order that the case of the Appellant is selected for scrutiny under CASS for the reason that large payments made w/s. 194J to persons who have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was incurring huge loss. The appellant has not furnished a copy of contract for consultancy services with Dr. Abhishek Shukla. Thus, the business exigency for such huge payment is not proved. Moreover, if the consultancy services was being taken for upcoming real estate projects, the payment should have been shown as a part of work in progress keeping in view the fact that no business was carried out by the appellant company during the year under reference. Keeping in view the facts and circumstances of the case, I am of considered opinion that the payment made to Dr. Abhishek Shukla was not for the purpose of business. The appellant has failed to prove the business exigency of this expenditure. It is therefore held that the addition made by Id. AO on account of the payment made to Dr. Abhishek Shukla is justified and deserves to be sustained and upheld. Accordingly, the ground no. 2 of the appeal is dismissed and not allowed. 6. He also confirmed the disallowance of Rs. 45,000/- made u/s. 40(a)(ia) after observing and holding as under:- "7.1 I have carefully considered the written submission of the appellant on the issue under reference. It is a fact that the appellant has ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voice. which show that these transactions basically were entered into regular course of business and the disallowance thereof in the hands of the Appellant is unjustified / unwarranted. 5. Therefore, the Appellant humbly prays Your Honours to kindly admit the additional evidences filed and dispose the appeal judiciously as per law. 6. The Appellant submits that if the prayer of the Appellant is granted by Your Honours it will advance justice to the Appellant and no prejudice will be caused to the Revenue as the matter will be decided on merit as per the law. 8. It was further submitted that assessee for starting its business had engaged Dr. Abhishek Shukla for carrying out various consultancy for development of new projects, strategic planning, market analysis etc, therefore, such a payment was towards the business purpose. 9. On the other hand, ld. DR submitted that there has been no business carried out by the assessee and no justification has been given for the purpose of making such a huge consultancy payment to Dr. Abhishek Shukla nor there is any documentary evidences for rendering of any services and therefore, the order of ld. CIT (A) should be confirmed. 10. Regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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