CEVA LOGISTICS INDIA PRIVATE LIMITED (SUCCESSOR TO CMA CGM LOGISTICS (INDIA) PRIVATE LIMITED),MUMBAI V. INCOME TAX OFFICER - 6(2)(1), MUMBAI

ITA 281/MUM/2024

AI Insights

M/s. Ceva Logistics India Pvt. Ltd. appealed against the order of the National Faceless Appeal Center/Commissioner of Income Tax (Appeals), which affirmed the additions made by the Assessing Officer for the Assessment Year 2015-16. The additions included Rs.1,18,300 as capital expenditure for company formation and Rs.34,55,041 for unsubstantiated transit expenses. The Tribunal noted the lack of documentary evidence and proper hearing in the lower proceedings, leading to the decision to remand the case for a fresh assessment with an opportunity for the assessee to be heard.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33833 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINIVAS P.; LD.
• Assessee Lawyers: BHAVESH MEHTA; LD
• Keywords: Set aside; Opportunity of being heard; Revenue expenditure; Capital expenditure
• Section: 250

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER ITA No.281/M/2024 Assessment Year: 2015-16 M/s. Ceva Logistics India Pvt. Ltd., [Successor to CMA CGM Logistics (India) Private Limited], The Qube, A-902/903, 9th Floor, M.V. Road, Marol, Andheri (East), Mumbai, Maharashtra – 400 059 PAN: AAFCC4670G Vs. Income Tax Officer- 6(2)(1), Room no.510, Aaykar Bhavan, M.K. Marg, Mumbai Maharashtra – 400 020 (Appellant) (Respondent) Present for: Assessee by : Shri Bhavesh Mehta, Ld. A.R. Revenue by : Shri Srinivas P., Ld. Sr. D.R. Date of Hearing : 27 . 11 .2024 Date of Pronouncement : 19.02.2025 O R D E R Per : Narender Kumar Choudhry, Judicial Member: This appeal has been preferred by the Assessee against the order dated 22.08.2023, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2015-16. ITA No.281/M/2024 M/s. Ceva Logistics India Pvt. Ltd. 2 2. In this case, the Assessee during the AY under consideration claimed the amount of Rs.1,18,300/- on account of formation expenses as ‘revenue in nature’ and filed the relevant details before the Assessing Officer (AO) who on perusing the same, treated the said amount of Rs.1,18,300/- as ‘capital expenditure’ and added the same in the income of the Assessee by observing and holding as under: “The Assessee is engaged in the business of freight forwarding and logistics business and revenue from operations. Expenditure incurred was for the formation of the company and therefore could not amount to revenue expenditure and would fall under “capital expenditure”. It is an established position of law that any expenditure incurred by any company in connection with formation of the company, is a capital expenditure.” 2.1 Further, the AO also observed that the Assessee during the AY under consideration has also debited an amount of Rs.16,88,39,237/- on account of transit expenses and on being asked the Assessee produced the details of the expenses up to the amount of Rs.16,53,84,196/- but not the amount of Rs.34,55,041/- being difference in the aforesaid figures. And therefore the AO show caused the Assessee by issuing a letter dated 01.09.2017, in response to which the Assessee has not submitted/produced any relevant details i.e. invoices, bills, vouchers, challans etc. and has also not shown any business expediency of the transit expenses by stating that the Assessee is unable to locate the voucher/invoices, bills, challans from the record room. As the Assessee could not produce/furnish any invoices, bills, vouchers and challans in respect of balance amount of Rs.34,55,041/- till passing of the assessment order, therefore the AO added the difference of Rs.34,55,041/- in the total income of the Assessee. 3. The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner, however, in spite of affording three opportunities, except seeking adjournment on one occasion ITA No.281/M/2024 M/s. Ceva Logistics India Pvt. Ltd. 3 eventually made no compliance and therefore the Ld. Commissioner in the constrained circumstances, vide impugned order dated 22.11.2023 affirmed the aforesaid addition by dismissing the appeal of the Assessee. 4. The Assessee, being aggrieved, is in appeal before this Court. The Assessee has raised various legal grounds as well as challenged the addition on merit and controverted the findings of the Ld. Commissioner as well as of the AO. 5. On the contrary, the Ld. D.R. refuted the claim of the Assessee by supporting the orders passed by the authorities below. 6. Heard the parties and perused the material available on record. Admittedly, in the absence of relevant documents/details and explanation, the authorities below have made and affirmed the aforesaid addition and it is a fact that the impugned order is an ex- parte order and not based on any reply and relevant documents and therefore the issues involved in the instant case remained to be adjudicated in its right perspective and proper manner. Therefore, considering the peculiar facts and circumstances in totality and for the just decision of the case and substantial justice, this Court is inclined to set aside the impugned order and remand the instant case to the file of the Ld. Commissioner for decision afresh, suffice to say by affording reasonable opportunity of being heard to the Assessee. Thus, the case is accordingly remanded to the Ld. Commissioner for decision afresh. ITA No.281/M/2024 M/s. Ceva Logistics India Pvt. Ltd. 4 7. In the result, the appeal filed by the Assessee stands allowed for statistical purposes. Order pronounced in the open court on 19.02.2025. Sd/- (NARENDER KUMAR CHOUDHRY) JUDICIAL MEMBER * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai. "