DCIT, CIRCLE -22, KOLKATA, KOLKATA vs. M/S. DELOITTE HASKINS & SELLS, KOLKATA

This Revenue’s appeal for assessment year 2013-14 arises against the Commissioner of Income Tax (Appeals)-6, Kolkata’s order dated 12.09.2017 passed in case No.CIT(A), Kolkata-6/10066/2016-17 involving proceedings u/s 143(3) of the I.T. Act, 1961, ‘in short the Act’.

It emerges from the case file that the Revenue has raised 3 substantive grounds seeking to revive the Assessing Officer’s action invoking section 40(a)(ia) disallowance of Rs. 62,88,782/- qua rent paid on hire of computers and Rs. 67,71,416/- in the nature of subscription and technology fees; both M/s. Deloitte Haskin & Sells Page 2 without deducting TDS thereby holding the same to be in the nature of rent and fees for technical services u/s 194I and 194J as well as disallowing / adding indemnity insurance expenses of Rs. 13,45,821/- u/s 37(1) of the Act; respectively. The CIT(A) has all these three disallowances / additions in the course of lower appellate proceedings.

We notice at the outset that the Revenue had raised the very substantive grounds in its appeals & 588/K/2016 for assessment years 2010-1 & 2011-12, respectively. The said co-ordinate bench’s order dated 11.07.2018 held that rent paid on hiring computers in issue is in the nature of mere reimbursement not attracting any TDS deduction. Learned co- ordinate bench thereafter concluded qua the second issue of subscription and technology fees that the same could not have been treated as fee for technical services since there was no profit element embedded therein. Coming to the 3rd issue of indemnity insurance expenses, it held this expenditure had to be wholly and exclusively incurred for the purpose of assessee’s business u/s 37 of the Act. Both the learned representatives are ad-idem during the course of hearing that the CIT(A) has followed his earlier findings in the impugned assessment year mutatis mutandis while deleting all these three disallowances / additions in question. We therefore adopt judicial consistency qua all these three issues to decline Revenue’s corresponding substantive grounds.

This Revenue’s appeal is dismissed. Order pronounced in the open court 12/10/2018