$ * IN HIGH COURT OF DELHI AT NEW DELHI 2. + ITA 709/2015 PR. COMMISSIONER OFINCOME TAX-9 ..... Appellant Through: Mr Dileep Shivpuri and Mr Sanjay Kumar, Advocates. versus XL INDIA BUSINESS SERVICES PVT. LTD. ..... Respondent Through: Mr Deepak Chopra and Mr Harpreet Singh Ajmani, Advocates. CORAM: DR. JUSTICE S. MURALIDHAR MR. JUSTICE VIBHU BAKHRU ORDER % 07.10.2015 1. This appeal by Revenue is directed against order dated 18th February, 2015 passed by Income Tax Appellate Tribunal ( ITAT ) in ITA No.6448/Del/2012 for Assessment Year ( AY ) 2008-09. 2. Assessee is engaged in business of providing IT enabled services to its group companies. During course of assessment proceedings, Assessing Officer (AO) disallowed sum of Rs.4,86,31,223/- debited to profit and loss account of Assessee under head Personnel Cost and ITA 709/2015 Page 1 of 3 claimed as expenses by them, on ground that it related to prior period. Before AO, Assessee claimed that during period from April 2005 to March 2007, it had utilised expertise of certain staff of XL Services Switzerland AG ( XL Swiss ) for assistance in its business operations. However, no payment had been made by Assessee for these services as two companies were engaged in negotiations over amount payable by Assessee as reimbursement for salaries and other costs paid by XL Swiss to their employees assigned to assist Assessee. It was only in financial year 2007-08 that agreement in relation to same was entered into by two companies and therefore expenses were only claimed in AY 2008-09. 3. In impugned order, ITAT noted that there was no dispute that consideration was payable by Assessee to XL Swiss in respect of employment of four of its personnel. No doubt they were assigned to Assessee during earlier year, but amount payable to them was subject matter of negotiation between said company and Assessee. ITAT noted that related agreement for payment of consideration for services of employment of XL Services Switzerland and AG could only be finalized during relevant previous year itself. liability to ITA 709/2015 Page 2 of 3 pay consideration, therefore, crystallized during relevant previous year. 4. Although learned counsel for Revenue sought to urge that expression was accounted for earlier in relation to liability in impugned order of ITAT should be construed as payment having been made in earlier previous year, it has been clarified by learned counsel for Assessee that no payment as such could be booked in earlier previous year since matter of payment of consideration was still being negotiated between parties. actual payment took place only in previous year relevant to AY in question. That being factual position, no substantial question of law arises from order of ITAT. 5. appeal is dismissed. S. MURALIDHAR, J VIBHU BAKHRU, J OCTOBER 7, 2015 MK ITA 709/2015 Page 3 of 3 PR. COMMISSIONER OFINCOME TAX-9 v. XL INDIA BUSINESS SERVICES PVT. LTD