India Public School (P) Limited, Coimbatore V. DCIT, Coimbatore

CO 17/CHNY/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2946 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 24-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 01-03-2017
• Court: TRIBUNAL
• Assessee Lawyers: S MOHAMEED MUSTAFA J
• Keywords: Additional evidence; Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! ' ! # . $ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.3402/MDS./2016 / ASSESSMENT YEAR : 2012-13 & C.O NO.17/MDS./2017 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1, 63-A, RACE COURSE ROAD, COIMBATORE. VS. M/S.INDIAN PUBLIC SCHOOL (P) LTD ., 70, DR.ALAGAPPA CHETTIAR ROAD, TATABAD, COIMBATORE 641.012. [PAN AABCI 6331 A] ( () / APPELLANT) ( *+() /RESPONDENT/ CROSS OBJECTOR) / APPELLANT BY : MR.S.MOHAMEED MUSTAFA, JCIT,DR /RESPONDENT BY : NONE / DATE OF HEARING : 24 - 05 - 2017 / DATE OF PRONOUNCEMENT : 24 - 05 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE AND THE CROSS OBJECTI ONS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COM MISSIONER OF ITA NO3402/MDS./16 :- 2 -: INCOME-TAX (APPEALS)-1, COIMBATORE DATED 31.08.201 6 PERTAINING TO ASSESSMENT YEAR 2012-13. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS FO R OUR ADJUDICATION. 1. THE DECISION OF THE LD.CIT(A) IS NOT SUSTAINABL E IN LAW BECAUSE ADDITIONAL EVIDENCE IN THE FORM OF EXPENSES RELATAB LE TO PROMOTIONAL ACTIVITIES WAS ADMITTED WITHOUT AFFORDI NG AN OPPORTUNITY UNDER RULE 46(3) OF THE I.T.RULES, 1962 TO THE AO FOR APPRECIATING THE SAME. 2. THE LD.CIT(A) FAILED TO APPRECIATE THAT AMOUNT SPENT ON PROMOTIONAL ACTIVITIES WOULD LEAD TO ENHANCING THE IMAGE OF THE SCHOOL THEREBY LEADING TO ENDURING BENEFIT, WHICH I S CAPITAL IN NATURE. 2.1. THE CROSS OBJECTIONS FILED BY THE ASSESSEE I S IN SUPPORT OF THE ORDER OF LD.CIT(A). 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. A LE TTER FOR ADJOURNMENT WAS FILED BY THE ASSESSEE STATING THAT THE SCHOOL WAS CLOSED AND ADMINISTRATIVE STAFF WERE ON LEAVE, SO T HE ASSESSEE COULD NOT FURNISH THE REQUISITE INFORMATION TO LD.A.R. W E FIND THAT THE REASONS EXPLAINED BY THE ASSESSEE FOR ADJOURNMENT C ANNOT BE CONSIDERED AS A BONA FIDE AND IN OUR OPINION, HAVIN G NO REASONABLE ITA NO3402/MDS./16 :- 3 -: CAUSE SHOWN TO ADJOURN THE CASE, THE ADJOURNMENT IS REJECTED. ACCORDINGLY, THE BENCH WAS OF THE VIEW THAT THE APP EAL CAN BE DISPOSED OF WITHOUT THE ASSISTANCE OF THE ASSESSEE AND THEREFORE, THE APPEAL WAS HEARD EX-PARTE QUA THE RESPONDENT-ASSESS EE AND DISPOSED OF BY CONSIDERING THE MATERIALS AVAILABLE ON RECORD AFTER HEARING THE LD.D.R. 4. BEFORE US LD.D.R PLEADED THAT THERE WAS A VIOL ATION OF RULE 46A BY THE LD.CIT(A) AFTER ADMITTING ADDITIONAL EVIDENC ES SUCH AS DETAILS OF AMOUNT SPENT ON PROMOTIONAL ACTIVITIES, IN DIRECTIN G THE AO TO ALLOW THE ASSESSEES CLAIM OF EXPENSES RELATABLE TO PROMO TIONAL ACTIVITIES AS REVENUE EXPENDITURE AND IT ALSO REQUIRES TO BE EST ABLISHED WHETHER THESE EXPENSES RELATED TO PRE-OPERATIVE EXPENSES WI TH ENDURING BENEFIT OR NOT, WHEN THE LD.CIT(A) OUGHT TO HAVE DI RECTED THE AO TO VERIFY THE SAME UNDER RULE 46A OF THE INCOME TAX RU LES. HENCE, LD.D.R PRAYED THAT THIS ISSUE MAY BE REMITTED BACK TO THE FILE OF LD. ASSESSING OFFICER FOR COMMENTING ON FRESH EVIDENCES . 5. AFTER HEARING THE LD.D.R, WE ARE OF THE OPINION THAT THE LD.CIT(A) ADMITTED CERTAIN EVIDENCES IN THE FORM OF EXPENSES RELATING TO THE PROMOTIONAL ACTIVITIES WITHOUT CONFRONTING T HE SAME TO THE AO. WE ACCEDE THE REQUEST OF THE LD.D.R. ACCORDINGLY, T HIS ISSUE IN DISPUTE IS PUT UP TO LD. ASSESSING OFFICER SO AS TO GIVE AN OPPORTUNITY TO THE AO ITA NO3402/MDS./16 :- 4 -: TO COMMENT THE NEW EVIDENCE PRODUCED BY THE ASSESSE E BEFORE THE LD.CIT(A). ACCORDINGLY, THE ENTIRE ISSUE IN DISPUT E IS REMITTED TO THE FILE OF LD.CIT(A) WITH A DIRECTION TO CALL ON A RE MAND REPORT FROM AO BEFORE DECIDING THEREUPON. 6. SINCE THE CROSS OBJECTIONS FILED BY THE ASSESSE E IS IN SUPPORTIVE OF ORDER OF LD.CIT(A), IT DOES NOT REQUIRE ANY ADJU DICATION AS WE HAVE ADJUDICATED THE REVENUES APPEAL ITSELF. CROSS OBJE CTIONS BY ASSESSEE STAND DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTIONS BY T HE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 24 TH OF MAY, 2017. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 24 TH MAY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF