Reliant Healthcare Consultancy Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 1070/DEL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6737 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 23-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AG AINST DATED
• Keywords: Additional evidence; Non-deduction of tax; TDS
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.1070/DEL/2017 ASSESSMENT YEAR: 2011-12 M/S. RELIANT HEALTHCARE CONSULTANCY PVT. LTD., ESCORTS HEART INSTITUTE & RESEARCH CENTRE, OKHLA ROAD, NEW DELHI VS. DCIT, CIRCLE-15(1), NEW DELHI PAN :AABCF2011Q (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 25/11/2016 BY THE LD. COMMISSIONER OF INCOME-TAX (A PPEALS)-7, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMEN T YEAR 2011-12 RAISING FOLLOWING GROUNDS: 1. THAT THE IMPUGNED ORDER DATED 25.11.2016 PASSED BY THE CIT(A) IS BAD IN LAW AND WRONG ON FACTS. 2.1 THAT CIT(A) ERRED BOTH ON FACTS AND IN LAW IN D ISALLOWING A SUM OF RS.5,76,286/- FOR NON-SUBMISSION OF DOCUMENTS AND N ON-DEDUCTION OF TDS ON REIMBURSEMENTS MADE TO DR. RAJEN GHADIOK AND MS.RACHNA KAMRA ON ACCOUNT OF PETROL, DRIVERS SALA RY AND MOBILE EXPENSES. 2.2 THAT CIT(A) ERRED BOTH ON FACTS AND IN LAW IN D ISALLOWING A SUM OF RS. 11,52,572/- FOR NON-SUBMISSION . OF DOCUMENTS A ND NON- APPELLANT BY SHRI R.M. MEHTA, CA RESPONDENT BY SHRI SURENDER PAL, SR.DR DATE OF HEARING 03.09.2019 DATE OF PRONOUNCEMENT 30.10.2019 2 ITA NO.1070/DEL/2017 DEDUCTION OF TDS ON REIMBURSEMENTS MADE TO FOUR OTH ER EMPLOYEES ON ACCOUNT OF PETROL, DRIVERS SALARY AND MOBILE EX PENSES. 3. THAT CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N DISALLOWING THE AFORESAID AMOUNT WITHOUT CONSIDERING THE FACT THAT NO TDS IS DEDUCTIBLE ON THE AFORESAID REIMBURSEMENTS MADE TO THE EMPLOYEES. 4. THE APPELLANT RESERVES TO ITSELF, THE RIGHT TO A DD, ALTER, AMEND, SUBSTITUTE, WITHDRAW AND/OR ANY GROUND(S) OF APPEAL AT OR BEFORE THE DATE OF HEARING. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE COMPANY WAS ENGAGED IN THE BUSINESS OF PROVIDING CO NSULTANCY IN THE MEDICAL FIELD. THE ASSESSEE FILED RETURN OF INC OME FOR THE YEAR UNDER CONSIDERATION ON 30/09/2011, DECLARING LOSS O F 3,12,06,323/- WHICH WAS FURTHER REVISED ON 06/11/20 12 DUE TO INADVERTENT CLAIM OF EXCESS TDS. THE CASE WAS SELEC TED FOR SCRUTINY AND ASSESSMENT UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) WAS COMPLETED ON 13/ 03/2014 AT ASSESSED LOSS OF 2,24,69,930/- AFTER MAKING ADDITION OF 75,83,824/- AND 11,52,572/-. THE ADDITION OF 75,83,824/-WAS MADE ON ACCOUNT OF EXCESSIVE CLAIM OF THE SALARY IN THE NAME OF DR. RAJEN GHADIOK AND MS. RACHNA KARMA. ADDITION OF 11,52,572/-WAS MADE FOR NON-DEDUCTION OF TAX AT SOU RCE ON THE DIFFERENCE OF AMOUNT IN SALARY DEBITED IN PROFIT AN D LOSS ACCOUNT AND SALARY AMOUNT APPEARING IN FORM NO. 16 IN CASE OF THE FOUR PERSONS. ON FURTHER APPEAL, BEFORE THE LEARNED CIT( A), THE ASSESSEE FILED FORM NO. 16A IN RESPECT OF DR RAJEN GHADIOK AND MS. RACHNA KARMA, AS ADDITIONAL EVIDENCES. THE LD. CIT(A) FOUND THAT IN THE CASE OF DR RAJEN GHADIOK SALARY WAS DEB ITED OFF RS.63,09,463/- IN PROFIT AND LOSS ACCOUNT, BUT GROS S AMOUNT OF SALARY OF 60,21,320/- WAS ONLY APPEARING IN FORM NO.16A. SIMILARLY, IN THE CASE OF MS. RACHNA KAMRA SALARY O F 12,74,361/- WAS DEBITED IN THE PROFIT AND LOSS ACCO UNT, WHEREAS 3 ITA NO.1070/DEL/2017 IN FORM NO. 16A, GROSS SALARY OF 9,86,218/- WAS ONLY SHOWN. THUS, ACCORDING TO THE LD. CIT(A), DIFFERENCE OF 2,88,143/- WAS FOUND IN SALARY CLAIMED IN BOOKS OF ACCOUNT AND SAL ARY SHOWN IN FORM NO. 16A IN CASE OF BOTH THE EMPLOYEES. THE ASS ESSEE EXPLAINED THAT THE AMOUNT OF 2,88,143/- WAS REIMBURSED TO THE EMPLOYEES TOWARDS DRIVER SALARY, PETROL EXPENSES A ND MOBILE EXPENSES, ON WHICH NO TAX WAS DEDUCTIBLE AT SOURCE, AND THEREFORE, SAME DID NOT APPEAR IN FORM NO. 16A ISSU ED TO THE EMPLOYEES. 2.1 THE LD. CIT(A) FOUND THAT AMOUNT OF REIMBURSEMENT OF 2,88,143/- CLAIMED FOR EXPENSES WAS FIXED IN CASE O F ALL EMPLOYEES, DESPITE DIFFERENTIAL PAYMENT UNDER DIFFE RENT HEADS DURING THE YEAR. THE LEARNED CIT(A) FURTHER OBSERVE D THAT ONLY LEDGER ACCOUNTS OF DRIVERS SALARY, PETROL AND MOBIL E REIMBURSEMENT WERE FILED AND NO EVIDENCE BY WAY OF VOUCHERS SUBMITTED BY THE CONCERNED EMPLOYEES, EVIDENCING PA YMENTS TO CLAIM THE ALLEGED REIMBURSEMENT, WAS FURNISHED. ACC ORDING TO THE LD. CIT(A), THE ALLEGED REIMBURSEMENT WAS NOTHING B UT A FIXED AMOUNT BEING PAID IN CASH TO THE EMPLOYEES, WHICH B EING IN THE NATURE OF THE SALARY/FIXED ALLOWANCE, ON WHICH TDS WAS DEDUCTIBLE. IN VIEW OF ABSENCE OF ANY DOCUMENTATION TO SUPPORT THE ALLEGED REIMBURSEMENT, THE LD. CIT(A) SUSTAINED THAT AMOUNT OF 2,88,143/- FOR BOTH THE EMPLOYEES, NAMELY, DR. RAJ EN GHADIOK AND MS. RACHNA KAMRA, TOTALLING TO RS. 5,76 ,286/-. IN RESPECT OF BALANCE AMOUNT OUT OF 75,83,824/-, RELIEF WAS ALSO ALLOWED SUBJECT TO VERIFICATION OF THE TDS IN THE G OVERNMENT ACCOUNT. 4 ITA NO.1070/DEL/2017 2.2 THE DISALLOWANCE OF 11,52,572/- ON ACCOUNT OF NON- DEDUCTION OF TDS IN CASE OF OTHER FOUR EMPLOYEES WA S ALSO SUSTAINED IN VIEW OF NO DOCUMENTATION IN SUPPORT OF THE ALLEGED REIMBURSEMENT OF 2,88,143/- TO EACH OF THE FOUR EMPLOYEES. 2.3 AGGRIEVED WITH THE DISALLOWANCE OF 5,76,286/- IN THE CASE OF TWO EMPLOYEES, NAMELY, DR. RAJEN GHADIOK AND MS . RACHNA KAMRA AND DISALLOWANCE OF 11,52,572/- IN CASE OF FOUR EMPLOYEES SUSTAINED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL, RAISING THE GROUNDS AS THE REP RODUCED ABOVE. 3. WE HAVE HEARD THE RIVAL SUBMISSION OF THE PARTIES ON THE ISSUE IN DISPUTE IN THE LIGHT OF THE ORDER OF THE L OWER AUTHORITIES AND PAPER BOOK CONTAINING PAGES 1 TO 26 FILED BY TH E ASSESSEE AND OTHER MATERIAL AVAILABLE ON RECORD. 4. IN THE GROUNDS RAISED BY THE ASSESSEE, THE FIRST IS SUE RELATES TO NATURE OF THE AMOUNT OF 2,88,143/- PAID TO TWO EMPLOYEES, NAMELY, DR RAJEN GHADIOK AND AND MS. RACHNA KAMRA AND AMOUNT OF 2,88,143/- PAID TO OTHER FOUR EMPLOYEES NAMELY SH. JS PURI, JASBIR GREWAL, SH. SANJEEV VASHISHT AND SH . HARSHVENDRA SAIN. ACCORDING TO THE ASSESSEE, THE PA YMENTS ARE IN THE NATURE OF REIMBURSEMENT OF DRIVERS SALARY, P ETROL AND MOBILE EXPENSES, WHICH HAVE BEEN PAID IN CASH MONTH LY ALONG WITH THE SALARY. BUT ON BEING ASKED BY THE LOWER AU THORITIES, THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE THAT THOSE EMPLOYEES INCURRED THOSE EX PENSES AND CLAIMED THE REINVESTMENT FROM THE ASSESSEE. IN ABSE NCE OF ANY SUCH DOCUMENTARY EVIDENCES, THE LEARNED CIT(A) HAS HELD THE AMOOUNT DEBITED IN THE PROFIT AND LOSS ACCOUNT OF 2,88,143/- TO EACH OF THE SIX EMPLOYEES AS IN THE NATURE OF THE S ALARY/FIXED 5 ITA NO.1070/DEL/2017 ALLOWANCE ON WHICH TDS WAS DEDUCTIBLE, AND IN VIEW OF THE FAILURE ON THE PART OF THE ASSESSEE TO DEDUCT TDS, HE SUSTA INED THE DISALLOWANCE. THE RELEVANT PART OF HIS FINDING IN C ASE OF DISALLOWANCE OF 11,52,572/- IS REPRODUCED AS UNDER: 4.2. THE AO NOTED THAT THERE WAS A DIFFERENCE IN T HE SALARY CLAIMED IN THE P & L A/C AND AS PER FORM NO. 16 ISSUED TO F OUR EMPLOYEES. HE ACCORDINGLY, TREATED THE DIFFERENCE OF RS.11,52, 572/- ON WHICH TDS WAS NOT DEDUCTED AND ALSO SINCE NO DOCUMENTARY EVIDENCE WITH REFERENCE TO THE DIFFERENCE IN THE TWO AMOUNTS WAS FURNISHED AS NOT ALLOWABLE AND ACCORDINGLY MADE THE IMPUGNED DISALLO WANCE. THE LD. AR STATED THAT THE DIFFERENCE AMOUNT PERTAINS T O REIMBURSEMENT VIZ. DRIVERS SALARY, PETROL AND MOBILE REIMBURSEME NT PAID TO EMPLOYEES. SINCE THESE REIMBURSEMENTS WERE NOT TAXA BLE, TDS WAS NOT DEDUCTED AND THEREFORE, DID NOT APPEAR IN THE F ORM NO. 16 ISSUED TO THE EMPLOYEES. IT IS NOTED THAT THE ALLEGED REIM BURSEMENTS IN THE ALL THE CASES IS ALWAYS RS.2,88,143/- DESPITE DIFFE RENTIA PAYMENT UNDER DIFFERENT HEADS DURING THE YEAR, THE ONLY EVI DENCE FILED ARE LEDGER ACCOUNTS OF DRIVERS SALARY, PETROL AND MOBI LE REIMBURSEMENTS. NO EVIDENCE BY WAY OF VOUCHERS SUBM ITTED BY THE EMPLOYEES EVIDENCING PAYMENTS TO CLAIM THE ALLEGED REIMBURSEMENTS IS FURNISHED. IT IS ALSO NOT UNDERST OOD AS TO HOW WITH RESPECT TO ALL EMPLOYEES, THE REIMBURSEMENT AM OUNT IS A FIXED FIGURE OF RS.2,88,143/-. IT IS QUITE EVIDENT THAT C ASH IS BEING DISBURSED TO THE CONCERNED EMPLOYEES IN THE GUISE O F REIMBURSEMENT SO AS TO AVOID DEDUCTION OF TAX ON THIS CASH COMPON ENT OF SALARY. IT IS ALSO NOTED THAT THE ALLEGED REIMBURSEMENT IS NOT WITH REFERENCE TO THE AMOUNT OF SALARY CLAIMED IN THE P & L A/C. IN T HE LIGHT OF THESE FACTS, IT IS HELD THAT THE SO CALLED REIMBURSEMENT IS NOTHING BUT A FIXED AMOUNT BEING PAID IN CASH TO THE EMPLOYEES AN D IS CLEARLY IN THE NATURE OF SALARY/FIXED ALLOWANCE ON WHICH TDS W AS DEDUCTIBLE. IN VIEW OF THESE FACTS AND IN THE ABSENCE OF ANY DO CUMENTATION TO SUPPORT THE ALLEGED REIMBURSEMENT, THE DISALLOWANCE OF RS.11,52,572/- MADE BY THE AO IS IN ORDER AND IS SU STAINED. THIS GROUND OF APPEAL IS RULED AGAINST THE APPELLANT.V 5. IN RESPECT OF THE DISALLOWANCE OF ALLEGED REIMBURS EMENT TO TWO EMPLOYEES, NAMELY, DR. RAJEN GHADIOK AND MS. RA CHANA KAMRA ALSO, HE SUSTAINED THE DISALLOWANCE ON SIMILA R GROUNDS. 6. WE FIND THAT THE LEARNED CIT(A) HAS SUSTAINED THE DISALLOWANCE MAINLY ON THE GROUND OF NON-PRODUCTION OF DETAILS OF EVIDENCES, THEREFORE, TO SUPPORT ITS GROUND OF APPE AL, THE ONUS 6 ITA NO.1070/DEL/2017 WAS ON TO THE ASSESSEE TO PRODUCE THOSE RELEVANT DO CUMENTS BEFORE THE TRIBUNAL. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE DID NOT PRODUCE ANY SUCH VOUCHERS OF INCURRING EXPENSES BY THOSE EMPLOYEES AND CLAIMED AS REIMBURSEMENT. IN ABSENCE OF ANY DOCUMENTARY EVIDENCES OF INCURRING OF EXPENDITURE B Y THE CONCERNED EMPLOYEES, THE ISSUE, WHETHER THE AMOUNTS ARE REIMBURSEMENT TO THE EMPLOYEES, CANNOT BE EXAMINED. MOREOVER, BEING THE IDENTICAL AMOUNT TO ALL THE EMPLOYEES, TH E PAYMENTS APPEAR IN THE NATURE OF ALLOWANCE RATHER THAN REIMB URSEMENT OF ACTUAL EXPENSES INCURRED ON BEHALF OF THE ASSESSEE. 7. IN SUCH CIRCUMSTANCES, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(A) ON THE ISSUE IN DISPUTE AND A CCORDINGLY, WE UPHOLD THE DISALLOWANCE SUSTAINED BY THE LEARNED CI T(A). THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE ACCORDING LY DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2019. SD/- SD/- (H.S. SIDHU) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31 ST OCTOBER, 2019. RK/-(D.T.D.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI