Appeal Details
Counselvise Citation
[2014] 123 COUNSELVISE.COM (IT) 0050 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 3 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
13-10-2014
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Assessment Year
2009-2010
Appeal Filed On
09-07-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MUKU L KR. SHRAWAT, JUDICIAL MEMBER PAN NO. AACCN0885B ITA NO. 256/IND/2013 A.Y. : 2009-10- ACIT, 2(1), BHOPAL VS. M/S. NSB BPO SOLUTION PRIVATE LIMITED, 97, ZONE II, M.P.NAGAR, BHOPAL (APPELLANT) (RESPONDENT) C.O.NO.67/IND/2013 (ARISING OUT OF ITA NO. 256/IND/2013) A.Y. : 2009-10 M/S. NSB BPO SOLUTION PRIVATE LIMITED, 97, ZONE II, M.P.NAGAR, BHOPAL VS. ACIT, 2(1), BHOPAL ( CROSS OBJECTOR ) (RESPONDENT) DEPARTMENT BY : SHRI R. A. VERMA, SR. DR ASSESSEE BY : SHRI AMIT JAIN, C. A. / // / DATE OF HEARING : 12.09.2014. /DATE OF PRONOUNCEMENT: 13/10/2014 / O R D E R PER P.K.BANSAL, A.M. BOTH APPEAL AS WELL AS CROSS OBJECTION HAS ARISEN O UT OF THE ORDER OF THE CIT(A), BILASPUR DATED 16.01.2013. M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 2 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 2. GROUND NO. 1 IN ASSESSEES APPEAL AS WELL AS GROUND NO.2 IN CROSS OBJECTION RELATE TO THE SAME ISSUE RELATIN G TO THE CLAIM IN RESPECT OF COURIER EXPENSES. 3. THE BRIEF FACTS RELATING TO THE GROUNDS ARE THAT TH E ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN COURIER EXPENSES IN THE IMPUGNED ORDER AT RS. 1,59,53,029/- AS COMPARED TO RS. 4,15,006/- IN THE PRECEDING ASSESSM ENT YEAR AND ALL THESE EXPENDITURE WERE MAINLY SUPPORTED BY SELF-MADE VOUCHERS WERE NOT SPECIFICALLY VERIFIABLE. ALTHOUGH MAJORITY OF THE EXPENSES WERE BELOW RS. 20,000/-, THEREFORE, HE DIS ALLOWED A SUM OF RS. 63,81,212/- AND ADDED THE SAME IN THE IN COME OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE THE LD . CIT(A). BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THE ASSESSEE WAS HAVING MORE THAN 500 SALES POINT AND THE ASSESSEE H AS TO GET DAILY COLLECTION OF THE FORM ON WHICH ON AN AVERAGE , THE ASSESSEE HAS INCURRED RS. 40/- PER DAY PER COURIER FROM ONE POINT AND, THEREFORE, THE EXPENSES WOULD BE RS. 40/- X 25 DA YS X 500 (SALE POINT) X 12 (MONTHS) = RS. 65 LAKHS IN ONE STATE ON LY. THE COMPANY HAS PROVIDED SERVICES THROUGH OUT THE COUNT RY. IT WAS FURTHER STATED THAT SUBMISSIONS WERE MADE BEFORE TH E ASSESSING OFFICER THAT DURING THE IMPUGNED YEAR, THE SALARY H AS GOT DOWN TO M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 3 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 RS. 6,08,66,806/- TO RS. 4,06,76,038/- I.E. BY DECR EASE OF RS. 2,01,90,768/-, AS EARLIER THE ASSESSEE HAS EMPLOYED THE STAFF FOR COLLECTION OF THE INFORMATION AND NOW IN RESPECT OF THE STAFF THE ASSESSEE IS TAKING THE SERVICES OF THE COURIER. ALL THESE FACTS WERE TAKEN BEFORE THE ASSESSING OFFICER, BUT THE ASSESSI NG OFFICER JUST REJECTED THE CLAIM OF THE ASSESSEE AND ALLOWED PART OF THE EXPENDITURE. THE LD. CIT(A) AFTER QUOTING THAT THER E WERE TREMENDOUS INCREASE OF THE EXPENSES AS COMPARED TO THE EARLIER YEARS, REDUCED THE DISALLOWANCE TO 15 % OF THE EXPE NSES I.E. AT RS. 23,92,953/-. EVEN THOUGH THE LD. CIT(A) ACCEPTE D THE NECESSITY OF THE EXPENSES, CHANGE IN THE ACCOUNTING POLICY AND CHANGE IN TERMS AND CONDITIONS OF TELECOM COMPANY, NECESSITY VISIT TO THE DISTRIBUTORS POINT ETC., THE DECREASE IN SALARY EXPENSES FROM THE IMMEDIATE PRECEDING PREVIOUS YEAR . AGAINST THE SUSTENANCE OF THE DISALLOWANCE, THE ASSESSEE HA S COME BEFORE US BY WAY OF CROSS OBJECTION WHY AGAINST THE DELETION OF THE DISALLOWANCE, THE REVENUE HAS COME BY WAY OF GR OUND NO.1 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW AS WELL AS SUBMISSIONS MADE BEFORE US. WE NOT ED THAT IN THIS CASE, EVEN THOUGH THE ASSESSING OFFICER HAS DO UBTED THE M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 4 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 INTEREST OF THE EXPENDITURE BY THE ASSESSEE DUE TO INCREASE IN THE EXPENDITURE AS COMPARED TO THE EARLIER YEARS, BUT H E DID NOT SPECIFICALLY POINT OUT ANY EXPENDITURE, WHICH IS NO N-GENUINE. THE DISALLOWANCE, WE NOTED HAVE SIMPLY BEEN MADE ON EST IMATE BASIS, ALTHOUGH THE ASSESSING OFFICER OBSERVED THAT THE DI SALLOWANCE IS MADE ON ACCOUNT OF NON-VERIFIABLE NATURE OF THE EXP ENSES INCURRED. NO DOUBT, THE ONUS IS ON THE ASSESSEE TO PROVE THAT HE HAS GENUINELY INCURRED THE EXPENSES. IN THIS CASE, THE ASSESSEE HAS DULY SUBMITTED BEFORE THE ASSESSING OFFICER ALL THE RELEVANT VOUCHERS AND THE DETAILS OF THE EXPENSES, BUT THE A SSESSING OFFICER HAS NOT TAKEN OUT ANY SPECIFIC EXPENSE WHIC H IS NOT DULY SUPPORTED WITH THE VOUCHERS. THEREFORE, IN OUR OPIN ION, THE DISALLOWANCE IS MADE MERELY ON AD HOC BASIS. WE FIN D FORCE IN THE SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE TH AT IN THE EARLIER YEARS, THE ASSESSEE HAS EMPLOYED THE EMPLOY EES FOR THIS WORK BUT NOW THE ASSESSEE IS AVAILING OF THE SERVIC ES OF THE COURIER AND DUE TO WHICH THERE IS A REDUCTION IN SA LARY EXPENSES BY RS. 2,01,90,768/-, WHICH IS MUCH MORE THAN THE E XPENDITURE INCURRED BY THE ASSESSEE ON ACCOUNT OF THE COURIER AMOUNTING TO RS. 1,59,53,039/-. THIS FACT HAS NOT BEEN DENIED BY THE LD. SENIOR DR BEFORE US. THE ASSESSING OFFICER, IN OUR OPINION, M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 5 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 CANNOT DECIDE THE QUANTUM OF THE EXPENDITURE, WHICH IS TO BE INCURRED BY THE ASSESSEE. IF BUSINESS EXPEDIENCY DE MANDS THE EXPENDITURE TO BE INCURRED THE EXPENSE HAS TO BE AL LOWED. THE ASSESSING OFFICER CANNOT ENTER INTO THE SOURCE OF T HE ASSESSEE AND DICTATE THE ASSESSEE WHAT EXPENDITURE AND HOW M UCH HAS TO BE INCURRED BY THE ASSESSEE. IT IS NOT THE CASE OF THE APPLICABILITY OF THE PROVISIONS OF SECTION 40A(2). WE, THEREFORE, SET-ASIDE THE ORDER OF THE CIT(A) AND DELETE THE DISALLOWANCE OF RS. 68,81,212/- MADE BY THE ASSESSING OFFICER. THUS, THE APPEAL OF THE REVENUE STANDS DISMISSED, WHILE THE GROUND NO.2 IN THE CROS S OBJECTION OF THE ASSESSEE IS ALLOWED. 5. THE ASSESSEE SINCE DID NOT PRESS GROUND NOS. 3, 4 & 5 IN ITS CROSS OBJECTION, THEREFORE, NOW THERE REMAINS O NLY GROUND NO.1, WHICH SURVIVES FOR OUR ADJUDICATION. THIS GRO UND READS AS UNDER :- THAT THE LD. ASSESSING OFFICER ERRED AND WAS NOT JUSTIFIED IN MAKING THE ADDITION AND THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 8,00,000/- ON ACCOUN T OF UNEXPLAINED UNSECURED LOANS 6. THE FACTS RELATING TO THIS GROUND ARE THAT TH E ASSESSING OFFICER NOTED THAT DURING THE IMPUGNED AS SESSMENT M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 6 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 YEAR, THE ASSESSEE HAS RECEIVED UNSECURED LOAN FROM SHRI RAJEEV NIGAM AMOUNTING TO RS. 8 LAKHS WHILE THERE WERE OPE NING BALANCE OF RS. 4,49,620/- AND THE ASSESSEE HAS REPA ID DURING THE YEAR AT RS. 7,26,620/-. THE ASSESSING OFFICER NOTED FROM THE DETAILS FURNISHED BY THE ASSESSEE THAT SHRI RAJEEV NIGAM DOES NOT HAVE ANY PERMANENT ACCOUNT NUMBER EVEN THE COPY OF THE BANK STATEMENT WAS NO FURNISHED. THEREFORE, HE WAS OF TH E VIEW THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY, CREDITWO RTHINESS OF THE CREDITOR AND ALSO FAILED TO PROVE THE GENUINENESS O F THE TRANSACTION. THEREFORE, HE MADE THE ADDITION U/S 68 OF THE INCOME-TAX ACT, 1961, AS UNEXPLAINED CREDIT. WHEN T HE MATTER WENT BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE AD DITION. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE ASSESSEE HAS SIMPLY FILED AN AFFIDAVIT IN THE FORM OF THE DECLARATION BEFORE THE ASSESSING OF FICER IN WHICH SHRI RAJEEV NIGAM HAS CONFIRMED THAT HE HAS GIVEN A LOAN OF RS. 8 LAKHS DURING THE FINANCIAL YEAR 2008-09 TO THE AS SESSEE. IN THIS AFFIDAVIT, HE HAS FURTHER CONFIRMED THAT THE ENTIRE AMOUNT HAS BEEN RECEIVED BACK DURING THE FINANCIAL YEAR 2009-1 0 AND NOTHING IS DUE FROM THE SAID COMPANY. THE SOURCE OF SUCH M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 7 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 DEPOSIT WAS MENTIONED EARNING FROM AGRICULTURAL OPE RATION. THE ASSESSING OFFICER CALLED FOR SPECIFIC INFORMATION A BOUT THE PERMANENT ACCOUNT NUMBER, CAPITAL ACCOUNT, BANK STA TEMENT AND STATEMENT OF AFFAIRS OF THE SAID CREDITOR, BUT THE ASSESSEE HAS SIMPLY RELIED ON THE AFFIDAVIT. THIS IS A FACT THAT SHRI RAJEEV NIGAM IS NOT AN INCOME TAX ASSESSEE AND HAS NOT BEE N ASSESSED TO INCOME TAX UP TO THE DATE OF THE AFFIDAVIT 23 RD DECEMBER, 2011. EVEN IN THE AFFIDAVIT, NO DETAIL OF THE AGRICULTURA L LAND BEING OWNED BY HIM FROM WHICH HE DERIVED AGRICULTURAL INC OME, IS GIVEN. EVEN THE QUANTUM OF THE AGRICULTURAL INCOME BEING DERIVED BY SHRI RAJEEV NIGAM IS ALSO NOT GIVEN, SO THAT THE CREDITWORTHINESS OF RAJEEV NIGAM COULD HAVE BEEN PR OVED. SECTION 68 OF THE INCOME-TAX ACT, 1961, LAYS DOWN T HE RULE OF LAW WHEREIN SUM IS FOUND CREDITED IN THE BOOKS OF AN AS SESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE O FFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSI NG OFFICER SATISFACTORY, THE SUM SO CREDITED MAY BE DISCHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE IN THE PREVIOUS Y EAR. IT IS NOT DENIED THAT THE SUM OF RS. 8 LAKHS WERE FOUND CREDI TED INTO THE BOOKS OF THE ASSESSEE. THEREFORE, IN OUR OPINION, O NUS IS ON THE M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 8 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AN D GENUINENESS OF THE TRANSACTION. THE LD. AUTHORIZED REPRESENTATI VE BEFORE US EVEN THOUGH RELIED ON THE AFFIDAVIT, COPY OF WHICH IS AVAILABLE ON PAGE 44 OF THE PAPER BOOK, BUT WAS NOT ABLE TO EXPL AIN HOW THE MONEY HAS BEEN ADVANCED BY WAY OF LOAN BY SHRI RAJE EV NIGAM TO THE ASSESSEE WHETHER IT WAS THROUGH CHEQUE OR IN CA SH. EVEN THE COPY OF BANK ACCOUNT WAS ALSO NOT BROUGHT TO OUR KN OWLEDGE. THEREFORE, WE AGREE WITH THE LD. SENIOR DR THAT EXC EPT PROVING THE IDENTITY BY WAY OF AFFIDAVIT, THE AFFIDAVIT DOE S NOT PROVE THE CREDITWORTHINESS OF SHRI RAJEEV NIGAM AND ALSO DOES NOT PROVE THE GENUINENESS OF THE TRANSACTION. THE DECISION OF CIT VS. MALHOTRA BROTHERS, 270 ITR 157 (MP), IS NOT APPLICA BLE AS THE DECISION RELATES TO THE VALIDITY OF THE ORDER PASSE D U/S 263 BY THE COMMISSIONER OF INCOME-TAX. SINCE THE ASSESSEE HAS FAILED TO PROVE ALL THE THREE INGREDIENTS AS SUBMITTED U/S 68 , WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A) SUSTAINI NG THE ADDITION. THUS, GROUND NO.1 TAKEN IN THE CROSS OBJECTION STAN DS DISMISSED. M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 9 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 8. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DIS MISSED WHILE THE CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED. 9. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34(4) BY PUTTING ITS PRONOUNCEMENT ON THE NOTICE BOARD. SD/- SD/- (MUKUL KR. SHRAWAT) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT M EMBER INDORE; DATED : 13/10/2014 CPU*SPS / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' # # ( / CONCERNED CIT 4. # # ( ( ) / THE CIT(A), INDORE 5. +,# &' , # # &' , -.% / DR, ITAT, INDORE 6. ,/0 1 / GUARD FILE. / BY ORDER, -# -# -# -# $2 $2 $2 $2 (ASSTT.REGISTRAR ITAT, INDORE M/S.NSB BPO SOLUTIONS PVT.LTD., BHOPAL 10 I.T.A.NO. 256/IND/2013 A.Y. 2009-10 1. DATE OF DICTATION- 17.09.2014 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .09.2014 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 13.10.2014. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER
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