HOULIHAN LOKEY ADVSIORY (INDIA) PRIVATE LIMITED,MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX - 15(1)(2), MUMBAI

ITA 3767/MUM/2025

AI Insights

The case involves Houlihan Lokey Advisory (India) Private Limited, which appealed against the order of the CIT(A) that upheld the AO's decision disallowing a 'Provision for Expenses' amounting to Rs 14,37,357. The disallowance was based on the grounds that the expenses were not actually incurred during the year and no TDS was deducted on the provision. The CIT(A) dismissed the appeal primarily due to the absence of a response from the assessee to the notice issued during the appellate proceedings. The Tribunal found that the appellate order was passed ex parte without proper compliance and thus set aside the CIT(A)'s order, remanding the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780762 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 28-05-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: HITEN THAKKAR; WAY A
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Principle of natural justice; TDS
• Section: 143(3); 271(1)(c)

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL“E” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.3767/MUM/2025 (A.Y. 2012-13) Houlihan Lokey Advisory (India) Private Limited, 17th Floor, Altimus Dr Gm, Tower, B Wing, Worli, Mumbai– 400018, Maharashtra v/s. बनाम Assistant Commissioner of Income Tax– 15(1)(2), AaykarBhavan, Maharishi Karve Road, Mumbai– 400020, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAECG1826F Appellant/अपीलार्थी .. Respondent/प्रतिवादी Appellant by : Shri Hiten Thakkar, Adv. Respondent by : Shri Hemanshu Joshi (Sr. DR) Date of Hearing 07.08.2025 Date of Pronouncement 07.10.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal arising from the appellate order dated 31.03.2025 is filed by the assessee against the order passed by the Learned Commissioner of Income-tax, Appeal, ADDL/JCIT(A)-1 Bengaluru [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 25.02.2015f or the Assessment Year [A.Y.] 2012-13. Printed from counselvise.com P a g e | 2 ITA No. 3767/Mum/2025 A.Y. 2012-13 Houlihan Lokey Advisory (India) Private Limited 2. The grounds of appeal are as under: 1. The learned CIT(A) has, on the facts and circumstances of the case and in law, erred in upholding the decision of the Assistant Commissioner Of Income-Tax-15(1)(2) (learned AO) in disallowing the “Provision for Expenses” amounting to Rs 14,37,357 in computing the total income/ loss of the Appellant on the basis that the expenditure actually incurred is deductible and given that appellant will have to incur these expenses in future, hence the bills were not raised and TDS also not deducted on the said provision. 2. The learned CIT(A) has, on the facts and circumstances of the case and in law, erred in concluding the CIT(A) proceedings in violation of the principles of natural justice by: 2.1 Not serving the notice on the Appellant on it’s registered email IDs (ie. the proper mode of service of notice as per the provisions of section 282 of the Act read with Rule 127 of the Income-tax Rules, 1961); 2.2 Only placing the above notice on the income-tax web portal, that too after more than a month had passed after passing of the order, and 2.3 Not taking into consideration the additional evidence filed by the Appellant wherein party wise details, Invoices and ledgers of the above Provision of expenses were submitted (additional evidence was filed by the Appellant as the learned AO had also erred in concluding the assessment proceedings without giving the Appellant an opportunity of being heard in respect of the disallowance made) 3. The learned CIT(A)/ learned AO erred in invoking penalty proceedings under section 271(1)(c) of the Act for concealment of particulars of income or furnishing of inaccurate particulars of income for the captioned AY. 3. Brief facts of the case are that in the instant case, the return was filed declaring loss of Rs.62,23,8231-. Subsequently, the case was selected for scrutiny. During the year under consideration, the assessee had shown income from operations at Rs. 2,15,01,720/- and other related income at Rs. 5,25,163/- and the net loss as per the Profit & Loss Account had been computed at Rs. 82,69,798/-. On verification of P&L Account, it was found by AO that the assessee had claimed deduction of Printed from counselvise.com P a g e | 3 ITA No. 3767/Mum/2025 A.Y. 2012-13 Houlihan Lokey Advisory (India) Private Limited Rs. 14,37,357/-, being provision for expenses which was disallowed on the basis that the expenditure actually incurred is deductible and excess provision is not allowable. Therefore, he disallowed the sum and added to the income. 4. Aggrieved by the said order of AO, the assessee filed appeal before the ld.CIT(A) and during appellate proceedings submitted additional evidences under Rule 46A of Income Tax Rules, 1962.As per the ld.CIT(A),a remand report had been obtained from the AO and on the basis of the report , opportunity was given to the assessee by way a notice issued. However, the assessee neither produced any written submission nor responded to the said notice even after affording sufficient time. Therefore, the appeal was decided based on the material available on record.It was concluded that the expenses were in the name of provision. No TDS was also deducted on the said provision. Hence, these expenses were not allowable u/s.40(a)(ia) also. Since, the said expenses were not paid during the year underconsideration and kept as the provision, the same were not allowable. Thus, the addition was upheld and the appeal was dismissed. 5. Before us, the ld.DR relied on the orders of the authorities below while the ld.AR has pleaded that the ld.CIT(A) did not allow Printed from counselvise.com P a g e | 4 ITA No. 3767/Mum/2025 A.Y. 2012-13 Houlihan Lokey Advisory (India) Private Limited adequate opportunity to respond to the notice and went on to dismiss the appeal solely on the basis of the assessment order and remand report. It is also submitted that the assessee was never aware of any remand report claimed to have been forwarded by the ld.CIT(A) for its comments. It is stated that in the interest of justice and fairplay the appellate order may be set aside and the entire issue may be remanded to the AO for de novo assessment. The ld.DR did not object to this proposition. 6. We find that the appellate order has been passed in ex parte manner mainly on account of lack of proper compliance by the assessee during appeal proceedings. Consequently, the issues involved were not adjudicated properly in the absence of any reply from the assessee. 7. In the light of above observations and in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the AO for passing the assessment order de novo after allowing adequate opportunity of hearing to the assessee to canvass its case. The assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the AO. Printed from counselvise.com P a g e | 5 ITA No. 3767/Mum/2025 A.Y. 2012-13 Houlihan Lokey Advisory (India) Private Limited 8. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 07/10/2025. Sd/- Sd/- ANIKESH BANERJEE PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai ददनाुंक /Date 07.10.2025 Lubhna Shaikh / Steno आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अयिकरण/ ITAT, Bench, Mumbai. Printed from counselvise.com "