J.Sudhakar Reddy, Accountant Member - All these appeals are filed by the sseessee and pertain to Assessment Years 2005-06, 2006-07, 2007-08 and 2008-09. ITA 3342/Del/2010, 3343/Del/2010 and 3400/Del/2010 are directed against a common order passed by Ld. CIT(A)-XXIX New Delhi dated 23.03.2010 for the Assessment Years 2005-06, 2006-07 and 2007-08. ITA 5188/D/2011 is filed against the order passed by the AO u/s. 144C r.w.s. 143(3) pursuant to and in compliance of the directions issued by the DRP - II, New Delhi vide order dated 02.09.2011 u/s. 144C(5) of the Act. As the issues arising in all these appeals are common, for the sake of convenience, they are heard together and disposed off by way of this common order.

2. Facts in brief: - The assessee is a tax resident of Thailand. It is engaged in the execution of DKOL damn hydroelectric power project of NTPC as a sub-contractor of Italian Thailand development company ltd, Thailand(hereinafter referred to as ITDL). It has filed its returns of income regularly.

3. The first issues that arise for our considerations for the AY 2005-06 is allowability of expenses incurred by the HO, which is located in Thailand, for the Indian project. The AO disallowed the amount on the ground that they are initial startup expenses and hence are in the capital field. The Ld. CIT(A) confirmed the disallowance, by observing that the AO has recorded that no supporting documents were submitted and that the assessee has not filed any details before him. Aggrieved the assessee is in appeal before us.

4. The Ld. Counsel for the assessee Mr. Subodh Gupta filed a paper book consisting of 144 pages and drew the attention of the bench to pages 25 and 26 and also to the written submissions made before the Ld. CIT(A), which is at pages 1 to 9 of the paper book and argued that vide letter dated 10.12.2007, complete name-wise and month-wise list of salary of expatriate staff was furnished. He disputed the recording made by the AO as well as the Ld. CIT(A) that the details were not furnished. In its paper book the assessee enclosed copies of vouchers, ledger account, etc… to demonstrate his claim that details were available and that they have been furnished to the AO. He further drew the attention of the bench to the nature of the expenses incurred and pointed out that they were revenue in character. He further submitted that the expenditure in question was debited to the respective heads of account and thus they were duly accounted for.

5. The Ld. DR submitted that the assessee has not furnished the required information. He referred to the T.P. Report in Form 3 CEB and argued that the expenses were incurred in Thailand and the nexus with the Indian Project is not proved.

6. After hearing rival contentions and perusing the papers on record, we find that the assessee has furnished a detailed reply to the AO as regards the expenses in question. A perusal of the nature of expenditure clearly demonstrates these are in the revenue field. The AO has disallowed the expenses in question by observing as under:—

"4. Head office expenses of Rs.13,74,033/-:- These expenses are shown in Form no.3CEB. And the assessee has claimed that the expenses of Rs.13,74,033/- were incurred by the HO of the assessee in Thailand in relation to the operations in India on account of salaries, welfare expenses and on travelling etc. These expenses are mainly initial project start up expenses for mobilizing of man power etc. These expenses have been claimed as expenses in the profit and loss account for the year as these are incurred directly in relation to project execution in India. If these were the start up expenses, these should have been capitalized in other wise also, supporting documents are not submitted, therefore disallowed and added to the income of the assessee."

6.1 The arguments of the Ld. DR that the assessee has not proved nexus of the expenditure in question to the project in India, is not the ground on which the Assessing Officer m