INCOME TAX ACT, 1961

Deduction under section 80HHE - Computation -Follow of judgment order

Assessee, a chartered accountant firm, had claimed deduction on account of reimbursement of expenses under member-firm inter-firm agreement with Arthur Anderson Switzerland. AO observed that payment was represented reimbursement of establishment costs, royalty for use of name and access to knowledge and database and fees for technical services. AO held that expenditure was incurred wholly and exclusively for profession of assessee, however, he disallowed an expenditure of 20 per cent. CIT (A) deleted said disallowance as well as Tribunal confirmed the same. Held: As CIT (A) as well as Tribunal had set aside the 20 per cent disallowance in respect of same assessee; the department was bound to follow the judgment. As it had neither challenged order nor any valid cause had been shown for reconsideration.

Income-tax Act, 1961, Section 80HHE

A.Y. : 1998-99
Decision: In favour of assessee.

CIT v. Arthur Andersen & Co.