Devika Buildestate Pvt. Ltd Vs ITO (ITAT Jaipur)
ITAT Jaipur held that disallowance of professional fees merely for the reason that notice under section 133(6) of the Income Tax Act remained unserved is not justifiable since assessee has placed various evidences on record. Accordingly, appeal is allowed.
Facts- The assessee company is engaged in the business of Real Estate such as purchase, sell consolidation of land and related activities. The Company had entered into Principal Agreement with M/s. Rajasthan Land Holdings Ltd. (RLHL) on 19th September, 2008, whereby it has been engaged as land consolidator for acquisition and transfer of land situated in specified areas. Since incorporation the company has purchased land on behalf of RLHL and for which amount has been received from RLHL as per the terms of the agreement. On perusal of the books of accounts, ld. AO noticed that the assessee had debited expense in P&L A/C on account of Professional Fees paid. The expense under the head seems unrealistic and excessive on the grounds that a company having total sales of Rs. 1,41,00,000/- pays professional fees to the various agencies to the tune of Rs.27,00,000/-. Thereafter, AO based on that fact and placing reliance on certain decision made the disallowance of the amount of Rs. 27,00,000/- paid by the assessee.
