ITAT disallows Fees paid towards Investment Advisory Services as Assessee only furnished Debit Note, no other Documentary Evidences [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has disallowed fees paid towards Investment Advisory Services as assessee only furnished  debit note, and no other documentary evidence.

During the course of assessment the A.O noticed that assessee, Finquest Financial Solutions Pvt. Ltd. has claimed an amount under the head administrative and selling expenses on account of loan syndication fees. On query, the assessee explained that an amount was paid to M/s Dev D. Developers P. Ltd, and Deepak Vora for arranging loan and balance amount each was paid to M/s Moncon Exports Pvt. Ltd, and M/s Niyoshi Trading and Investment P. ltd. for Investment Advisory Services. On the basis of supporting detail and evidences filed the assessing officer has allowed the claim of 11 lac amount paid to M/s Dev D. Developer Pvt. Ltd, and Deepak Vora for arranging of loan. 

However, the remaining amount of Rs.7,50,000/- each to Moncon Exports Pvt. Ltd, and M/s Niyoshi Trading and Investment P. ltd was disallowed on the reason that both these companies have provided only investment advisory services to the assessee and not the services related to loan syndication as claimed by the assessee.

The coram of Judicial Member Amarjit Singh and  Accountant Member Amarjit Singh has held that assessee has filed only the debit note pertaining to /s Moncon Exports Pvt. Ltd & M/s Niyoshi Trading and Investment P. ltd, showing this amount pertained to Investment Advisory Services. The assessee has not filed any other documentary evidence to substantiate that this amount of Rs.15,00,000/- was pertained to loan syndication fees. The assessee has also not filed any specific detail of the loan arranged by these two parties. Further, on the similar issue and identical facts, the coordinate bench of the ITAT in the case of the assessee itself for assessment year 2012-13 has sustained the disallowance of Rs.15,00,000/- shown as Investment Advisory Services to the same parties. During the year under consideration also the assessee could not substantiate with relevant evidences that these expenses were related to loan syndication fees and the same was claimed as Investment Advisory Services without any break up of the detail of loan advances arranged by these two parties.

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