Assessee IDC Centre for Consultancy and Research Private Limited, Bangalore Deputy Commissioner Of Income Tax, Circle- 3(1)(1), Bangalore

IN THE INCOME TAX APPELLATE TRIBUNAL
“B’’ BENCH: BANGALORE
BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER
AND
SHRI B.R. BASKARAN, ACCOUNTANT MEMBER
ITA No.104/Bang/2020
Assessment Year: 2015-16

M/s. IDC Centre for Consultancy
and Research Private Ltd.
No.23 & 24 Ground Floor
AMR Tech Park
2-B, Hongasandra
Hosur Main Road
Bangalore
PAN NO : BLRCO5726A
APPELLANT 

Vs.

Deputy Commissioner of
Income-tax
Circle-3(1)(1)
Bangalore
RESPONDENT

Appellant by : Shri M.P. Lohia, A.R.
Respondent by : Sri Priyadarshi Mishra, D.R.
Date of Hearing : 02.11.2020
Date of Pronouncement : 01.12.2020

O R D E R

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

The assessee has filed this appeal challenging the order dated 22-11-2019 passed by Ld CIT(A)-3, Bengaluru and it relates to theassessment year 2015-16. The assessee is aggrieved by the decision of Ld CIT(A) in not admitting additional evidences and in confirming the disallowance of management fees of Rs.5,05,83,087/- paid by the assessee to its group concerns.

2. We heard the parties and perused the record. The assessee is engaged in the business of providing market intelligence & advisory services to information technology, telecommunication industries and consumer technology markets. During the year under consideration, the assessee had paid management fees to two itsgroup concerns, viz., M/s IDC Research Inc., USA and M/s IDCAsia/Pacific Pte Ltd aggregating to Rs.5,05,83,087/-. The AO askedthe assessee to furnish details of expenses and also copies ofagreements, invoices and details of work done/services rendered bythe above said two companies. From the details furnished by the assessee, the AO noticed following deficiencies:-

• The agreements do not provide the basis of charging the fees for rendering services or the manner in which cost is to be allocated.

• The appellant has failed to provide the specific details of work done or services rendered by the related concerns from abroad.

• The agreements or invoices do not throw any light on the details of actual services provided by these companies or the basis on which payment had been made. The nature of services indicated in the invoices was very generic iz `International Allocation Charge Back-Rs. 57,00,547/-', 'Group Management Fee-Rs. 7,20,426/- etc.

• Invoice from 1DC Inc reveals that management fee wascharged for one year of which only six months related to the year under consideration. Common invoice for period 01.10.2013 to 31.03.2014 and for period 01.04.2014 to 20.09.2014 was also raised on 27.06.2014. Thus the amount related to FY 201314 did not pertain to the year under consideration. The invoice for the current year for period up to 20.09.2014 was raised in advance on 27.06.2014 i.e. even before the period for which the services to be rendered was over. This indicated that there was no basis for raising such invoices and the same were being raised as only a device to shift profit from India.

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