a)The Assessing Officer disallowed consultancy charges paid by assessee by treating them as bogus expenditure.
b)He made the disallowance on ground that consultancy was not provided by parties, as no reply was received from them in respect of letters issued to them.
c)On Appeal, the CIT (A) deleted such additions. Further, the Tribunal held in favour of assessee. The Aggrieved-revenue filed the instant appeal.
The High Court held in favour of assessee as under:
1)The Tribunal, after taking into account substantiating material produced before it, rightly concluded that it was difficult to believe that any assessee would claim such bogus expenditure, when it was eligible for 100% deduction under section 80IA;
2)In addition, even otherwise, the services rendered by Consultants were not found to be doubtful. The doubt was only with regard to the quantum of services rendered by them;
3)However, when payment was made to unrelated parties through the baking channel after deduction of tax, the appellate authorities had rightly addressed the instant issue;
4)Thus, the sums paid to unrelated parties could not be treated as bogus if it they were paid through banking channel after deducted of tax thereon. – CIT V. MUNDRA PORT AND SEZ LTD  45 taxmann.com 361 (Gujarat)