Case Law Details
Lloyd’s Register Quality Assurance Ltd. Vs DCIT (ITAT Mumbai)
Undisputed facts are, the Assessing Officer by treating the management charges as Head Office expenses has restricted the claim of the assessee to 5% of the total adjusted income in terms of section 44C of the Act. Whereas, learned Commissioner (Appeals) relying upon the order passed by him for assessment year 2008–09 and 2010–11, has restricted the disallowance under section 44C of the Act to 50% of the amount paid by the assessee. However, as could be seen from the facts on record, while deciding identical issue in case of assessee’s Group Company M/s. Lloyd’s Register Asia (India Branch Office), supra, in assessment year 2005–06, the Tribunal has held that management charges paid to the Head Office do not come within the purview of section 44C of the Act. Following the aforesaid decision, the Tribunal in assessee’s own case for assessment year 2008–09 and 2009–10, in ITA no.389–390/Mum./2013, dated 7thJune 2017, r/w M.A. no.749–750/Mum./2017, dated 6th April 2018, has deleted the disallowance made under section 44C of the Act. Respectfully following the aforesaid decision of the Co–ordinate Bench, we delete the 50% disallowance made out of management charges under section 44C of the Act.
FULL TEXT OF THE ITAT JUDGMENT
Appeal by the assessee for the assessment year 2007–08 and cross appeals for assessment year 2010–11, are against two separate orders, both dated 26th February 2015, passed by the learned Commissioner (Appeals)–55, Mumbai.
2. Since these appeals relates to the same assessee and involve common issues, as a matter of convenience, these appeals were heard together and are being disposed–off by way of this consolidated order.
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