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36. We have carefully considered the rival contention and also perused the evidence produced before the. At page number 245 of the paper book the assessee has produced investment, shareholders agreement between WDC ventures Ltd and vatika Ltd and several projects private limited dated 31/10/2007. The WDC venture limited is a company based in Mauritius which is engaged in the business of making Page | 33 investment in various forms in real estate projects. As the assessee company is engaged in the business of development of realistic projects the Mauritius company agreed to subscribe to the compulsory clear convertible debentures and equity shares in the assessee company. The debentures as stated in clause number 1.1.48 and are defined as INR 1000 per convertible debentures payable towards the issue and allotment of each Wachovia CCD aggregating to INR 2000 million only. The assessee is subscribed and paid-up capital as on that date was only INR 107,300,000. The relevant clause for payment of the upfront fees is mentioned at clause number 5 (t) which provides that the payment of upfront participating fee by the existing shareholders to Wachovia of 1% (net of all applicable taxes) of Wachovia‟s commitments being a total amount of INR 20,000,000 (INR 20,000,000 only). Therefore naturally the liability for payment of the existing shareholders to Wachovia rest on the existing shareholders. Now on reading of the agreement it is necessary to find out who those existing shareholders were and how they are defined in the agreement. On reading of the preamble of the agreement which is executed between WDC ventures Ltd and vatika Ltd, everlasting projects private limited, Mr. Anil Bhalla,, Gaurav Bhalla, Gautam Bhalla and Kanchan Bhalla. Further after mention of the parties it is recorded that Mr. Anil Bhala, Gautam Bhalla,Gaurav Bhalla , Kanchan Bhalla and Everlast Projects are the existing shareholders. Therefore the party number 3 - 7 of the agreement are specifically defined as existing shareholders. The assessee is defined as company. The liability of the payment of upfront fee did not devolve on the assessee company but on the existing shareholders. In fact it is an agreement between these parties which specifically provides that the liability for payment of upfront fees rest on the existing shareholders. Therefore it is for them only to understand and give the reasons that why it has been agreed so that the upfront fee payment is the liability of the existing shareholders and not the company. Further in the whole of the written submission as extracted above made by assessee, there is no Page | 34 answer that for what reasons the liability agreed by the parties was on the existing shareholders but has been debited in the books of the assessee company. As it is an agreement by the investor, the appellant investee company and the existing shareholder of the appellant company by which all of them have agreed that upfront fee payment is required to be paid by the existing shareholders and not by the assessee company, we do not find any infirmity in the order of the learned CIT - A in holding that that the assessee has not incurred any expenditure as there is no liability devolve in on the appellant and hence same is not deductible in the hands of the assessee.

37. In view of this all the grounds of the appeal which are devolving around the disallowance of Rs. for 9439031/- of the about to expenditure of the consultation placement fees paid as well as of the upfront fee are dismissed.

38. Accordingly ITA number 6476/del/2013 filed by the assessee for assessment year 2008 - 09 is dismissed.

39. ITA number 1512/del/2014 for assessment year 2008 - 09 is filed by the assessee against the order of the learned CIT (Appeals) - XXXI , New Delhi dated 31/12/2013 wherein the penalty of INR 9 507003/- levied by the learned deputy Commissioner of income tax, central circle - 20, New Delhi for her order dated 28/03/2013 u/s 271 (1) © The of the income tax act 1961 was confirmed. The assessee has raised the following grounds of appeal in ITA No. 1512/Del/2014:-