DELOITE CORPORATE FINANCE SERVICES INDIA P.LTD, MUMBAI V. DCIT 6(2)(1), MUMBAI

CO 46/MUM/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3606 (ITAT-MUMBAI)
• Duration Of Justice: 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 22-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR LD
• Section: 143(3)

Judgement Text

ITA NO. 4422/MUM/2016 & CO NO. 46/M/18 DELOITTE CORPORATE FINANCE SERVICES INDIA PVT. LTD. ASSESSMENT YEAR 20 10 - 1 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO. 4422 / MUM/ 201 6 ( / ASSESSMENT YEAR: 20 10 - 1 1 ) DEPUTY COMMISSIONER OF INCOME TAX CIRCLE - 6(2) (1) ROOM NO. 563 , AAYKAR BHAWAN M.K.ROAD MUMBAI - 400 020 / VS. DELOITTE CORPORATE FINANCE SERVICES INDIA PRIVATE LIMITED ES SAR HOUSE, 11 K.K.MARG,MAHALAXMI MUMBAI 400 0 34 ./ ./ PAN/GIR NO. AA CC D - 4805 - B ( / APPELLANT ) : ( / RESPONDENT ) & CO. NO. 46/MUM/2018 (ARISING OUT OF ITA NO. 4422/M/16) ( / ASSESSMENT YEAR: 2010 - 1 1 ) DELOITTE CORPORATE FINANCE SERVICES INDIA PRIVATE LIMITED INDIABULLS FINANCE CENTRE TOWER - 3, 27 TH - 32 ND FLOOR SENAPATI BAPAT MARG ELPHINSTONE ROAD MUMBAI 400 013 / VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE - 6(2)(1) ROOM NO. 563, AAYKAR BHAWAN M.K .ROAD MUMBAI - 400 020 ./ ./ PAN/GIR NO. AACCD - 4805 - B ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : KETAN VED, LD. AR. REVENUE BY : V. VIDHYADHAR , LD. DR / DATE OF HEARING : 1 4 /03/2018 / DATE OF PRONOUNCEMENT : 14 / 0 3/2018 ITA NO. 4422/MUM/2016 & CO NO. 46/M/18 DELOITTE CORPORATE FINANCE SERVICES INDIA PVT. LTD. ASSESSMENT Y EAR 2010 - 11 2 / O R D E R PER BENCH 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 20 10 - 1 1 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME - TAX (APPEALS) - 2 [CIT(A)], MUMBAI APPEAL NO.CIT(A) - 2 /IT - 25 / 201 3 - 14 DATED 14/03 /2016. T HE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. DEPUTY COMMISSIONER OF INCOME TAX - 1 (1) ON 06/03/2013 U/S 143(3) OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS FILED CROSS OBJECTIONS AGAINST THE SAME. THE EFFECTIVE GROUNDS RAISED IN R EVENUES APPEAL READS AS UNDER: - I . O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN OBSERVING THAT THE AO HAS NOT ESTABLISHED THAT THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE WAS WITH AN INTENTION TO DEFER THE TA X LIABILITIES AND THERE IS NO LOSS TO REVENUE AS THE TAX RATE IS THE SAME IN BOTH ASSESSMENT YEARS WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AS SUCH, THE REVENUE HAS TO BE RECOGNIZED AS AND WHEN THE WORK IS FINISHED AS PER THE TERMS OF THE CONTRACT. 2 .1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING R ESIDENT CORPORATE ASSESSEE ENGAGED IN PROVIDI NG CORPORATE FINANCE SERVICES WAS ASSESSED FOR IMPUGNED AY AT LOSS OF RS.10.81 CRORES AFTER CERTAIN ADJUST MENT OF PROFESSIONAL INCOME FOR RS.1.01 CRORES AS AGAINST RETURNED LOSS OF RS. 9.79 CRORES E - FILED BY THE ASSESSEE ON 3 0 / 1 0 /2010 . THE AFORESAID ADJUSTMENT OF PROFESSIONAL INCOME IS THE SOLE SUBJECT MATTER OF THIS APPEAL. 2.2 UPON PERUSAL OF DETAILS FILED B Y THE ASSESSEE DURING ASSESSMENT PROCEEDING S, THE LD. AO OPINED THAT THE PROFESSIONAL FEE S BILLS RAISED BY THE ASSESSEE IN THE MONTH OF APRIL, 2010 AMOUNTING TO RS.1.05 CRORES ITA NO. 4422/MUM/2016 & CO NO. 46/M/18 DELOITTE CORPORATE FINANCE SERVICES INDIA PVT. LTD. ASSESSMENT Y EAR 2010 - 11 3 PERTAINED TO SERVICES RENDERED BY THE ASSESSEE IN FINANCIAL YEAR 2009 - 10 AND THE REFORE, THE SAME WERE REQUIRED TO BE TAXED IN THE IMPUGNED AY ONLY . SINCE THE ASSESSEE HAD ALREADY OFFERED INCOME OF RS.2.06 CRORES PERTAINING TO BILLS RAISED IN APRIL, 2009 IN THE IMPUGNED AY, LD. AO NETTED THE SAME TO RS. 1.01 CRORES AND ENHANCED THE RETU RNED LOSS TO THAT EXTENT. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 14/03/2016 WHERE LD. CIT(A) RELYING ON THE ORDERS FOR AY S 2008 - 09 & 2009 - 10 ALLOWED THE STAND OF THE ASSESSEE. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. AUTHORIZED COUNSEL FOR ASSESSEE [AR], AT THE OUTSET, DREW OUR ATTENTION TO THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2009 - 10 AND SUBMITTED THAT THE ISSUE STOOD COVERED IN ASSESSEES FAVOR BY THE CITED JUDGMENT AND THEREFORE, THE FACTUAL MATRIX BEING THE IDENTICAL, THE SAME SHOULD BE FOLLOWED. THE LD. DR FAIRLY CONCEDED THE SAME. 5. UPON PERUSAL OF ORDER OF THIS TRIBUNAL IN ITA NO. 4135 - 36/MUM/2015 ORDER DATED 15/03/2017 FOR AY 2009 - 10, AS PLA CED ON RECORD, WE FIND THAT THE MATTER HAS BEEN SETTLED IN ASSESSEES FAVOUR BY THE TRIBUNAL BY MAKING FOLLOWING OBSERVATIONS: - 6.1. IT IS NOTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.2,06,73,054/ - REPRESENTING VARIOUS INVOICES RAISED BY THE ASSESS EE ON HIS CLIENTS IN THE MONTH OF APRIL 2009. THESE RECEIPTS WERE ACCOUNTED FOR IN THE RELEVANT PREVIOUS YEARS OF A.Y.2010 - 11, MEANING THEREBY THE INCOME HAS ALREADY ACCOUNTED FOR IN THE SUBSEQUENT ASSESSMENT YEAR. THE CLAIM OF THE ASSESSEE IS THAT THE REV ENUE IS RECOGNIZED ONLY AT A STAGE WHERE THERE IS CERTAINTY OF REALIZATION OF INCOME. IT IS NOTED THAT THERE IS NO UNDUE BENEFIT DERIVED BY THE ASSESSEE IN ACCOUNTING FOR CERTAIN INVOICES IN SUBSEQUENT YEAR. OUR VIEW FINDS SUPPORT FROM THE DECISION FROM HO N'BLE APEX COURT IN CIT VS. EXCEL INDUSTRIES LTD., THE TAX RATE IN BOTH THE YEARS IS SAME, THUS, WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LEARNED CIT(A). ITA NO. 4422/MUM/2016 & CO NO. 46/M/18 DELOITTE CORPORATE FINANCE SERVICES INDIA PVT. LTD. ASSESSMENT Y EAR 2010 - 11 4 FINALLY, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. SINCE THE FACTS ARE IDENTICAL, RESPECTF ULLY FOLLOWING THE SAME, THE APPEAL OF THE REVENUE STANDS DISMISSED. TO MAKE IT MORE CLEAR, THE SAID ADJUSTMENT OF RS.1.01 C RORES MADE BY LD. AO BY ENHANCING THE RETURNED LOSS IS NOT WARRANTED AND THEREFORE, THE TOTAL LOSS OF THE ASSESSEE STANDS DETERMINED AT RS. ( - )9,79,91, 325/ - . 6 . RESULTANTLY, THE RE VENUES APPEAL STANDS DISMISSED WHICH MAKES ASSESSEES CROSS OBJECTIONS INFRUCTUOUS AND HENCE DISMISSED. ORDER PR ONOUNCED IN THE OPEN COURT ON 14 TH MARCH , 2018 . SD/ - SD/ - ( C.N .PRASAD ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 14 . 03.2018 SR.PS: - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI