Case Law Details
ACIT Vs Tata Autocomp GY Batteries Pvt. Ltd (ITAT Pune)
Introduction: The appeal by the Revenue, arising from the CIT(A)-5 Pune’s order, focuses on the deletion of an addition related to Administrative Service charges paid by the assessee to Tata Autocomp Systems Ltd. (TACO). This article delves into the background, assessment, and the subsequent decisions leading to the resolution of the disputed deduction.
Detailed Analysis: The Assessing Officer (AO) initially denied the deduction, emphasizing the lack of evidence for the receipt of services. However, the Tribunal received three paper books outlining the services received from TACO. The provided details, including emails exchanged, covered areas such as Human Resource and Development, Legal and taxation advisory services, Vendor management services, Internal audit, IT support services, and Monitoring of operations. The Tribunal’s test-check revealed the emails pertained to the assessee’s business, establishing the receipt of services.
In assessing the deductibility of the Administrative Service charges, the AO argued that the services were general and did not require technical or professional knowledge. Nevertheless, the Tribunal referred to previous cases, including one involving the assessee for A.Y. 2009-10, where a similar disallowance was made but later upheld by the Tribunal. The Tribunal’s decision affirmed the deductibility of these expenses, aligning with the AO’s stance for A.Ys. 2010-11 to 2015-16 and precedent cases involving other group companies.
Conclusion: The Tribunal dismissed the appeal, supporting the CIT(A)’s decision to delete the addition of Rs.2,64,61,769/- for Administrative Service charges. The order highlights the established receipt of services through detailed documentation and the consistent legal basis for the deductibility of such expenses, as supported by previous rulings and decisions.
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