Assessee has paid service charges of Rs 3 lakhs per month to company SRSR for providing advisory services in assessee’s business area, accounting services, collection of interest and dividend, taxation, ROC related matters and maintenance of its land, properties, etc . Assessing officer estimated at Rs 25000 per month . On appeal the Tribunal held that , there being no dispute that services was rendered to assessee, Assessing Officer cannot step into shoes of assessee to-re fix amount that should have been paid . S. 37(1) does not have any restriction to amount paid so long expenditure is incurred for business. ( referred ,CIT v. Bharat Carbon & Ribbon Mfg. Co. (P.) Ltd. [1999]239 ITR 505 (SC) ,Sasson J. David & Co. (P.) Ltd. v. CIT [1979] 118 ITR 261 (SC)). Birla Cotton Spinning & Weaving Mills Ltd. v. CIT [1967] 64 ITR 568 (Cal.) (HC ). CIT v. Dhanrajgiri Raja Narasingiri [1973] 91 ITR 544 (SC) Jamshedpur Motor Accessories Stores v. CIT [1974] 95 ITR 664 (Pat.) (HC) J.K. Woollen Mfgr. v. CIT [1969] 72 ITR 612 (SC). I CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601 (SC), ( AY.2005 -06)
Elem Investments (P.) Ltd. v. ACIT (2018) 172 ITD 58 (Hyd) (Trib.)
S.37(1): Business expenditure – Commercial expediency -Business man’s point of view – Service charges were paid to company SRSR for providing advisory services in assessee’s business area, accounting services, collection of interest and dividend, taxation, ROC related matters and maintenance of its land, properties, etc -There being no dispute that services was rendered to assessee, Assessing Officer cannot step into shoes of assessee to-re fix amount that should have been paid . S. 37(1) does not have any restriction to amount paid so long expenditure is incurred for business.