NEW ERA MERCANTILE P.LTD, MUMBAI V. DCIT 7(1), MUMBAI

ITA 1083/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7890 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: REEPAL G TRALSHAWALA LD
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

ITA NO.1082 &1083//MUM/2013 NEW ERA MERCANTILE PRIVATE LIMITED ASSESSMENT YEARS-2005-06 & 2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1082/MUM/2013 ( / ASSESSMENT YEAR: 2005-06) NE W ERA MERCANTILE PRIVATE LTD 442,INDUSTRY MANOR, A MARATHE MARG, PRABHADEVI MUMBAI-400 025 / VS. INCOME TAX OFFICER 7(1)(1) MUMBAI ! ./ ./PAN/GIR NO. AAACN-1711-G ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) & ./I.T.A. NO.1083/MUM/2013 ( / ASSESSMENT YEAR: 2007-08) NEW ERA MERCANTILE PRIVATE LTD 442,INDUSTRY MANOR, A MARATHE MARG, PRABHADEVI MUMBAI-400 025 / VS. DEPUTY COMMISSIONER OF INCOME TAX OFFICER 7(1)(1) MUMBAI ! ./ ./PAN/GIR NO. AAACN-1711-G ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : REEPAL G.TRALSHAWALA, LD.AR REVENUE BY : SUMAN KUMAR, LD. SR. DR / DATE OF HEARING : 02/11/2017 / DATE OF PRONOUNCEMENT : 13/12 /2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) ITA NO.1082 &1083//MUM/2013 NEW ERA MERCANTILE PRIVATE LIMITED ASSESSMENT YEARS-2005-06 & 2007-08 2 1. THE CAPTIONED APPEALS BY ASSESSEE FOR ASSESSMENT YEARS [AY] 2005-06 & 2007-08 ASSAILS SEPARATE ORDERS OF FIRST APPELLATE AUTHORITY QUA CONFIRMATION OF CERTAIN ADDITIONS. SINCE COMMON ISS UES ARE INVOLVED, WE DISPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE & BREVITY. THE ASSESSEE, VIDE LETTER DA TED 24/10/2017, HAS PLEADED FOR ADMISSION OF ADDITIONAL EVIDENCES. FIRS T WE TAKE UP ITA NO. 1082/MUM/2013 FOR AY 2005-06 WHICH CONTEST THE ORDE R OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-20 [CIT(A)], M UMBAI, APPEAL NO. CIT(A)20/7(1)(1)/IT-290/07-08/2011-12 DATED 22/11/2012. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER 7(1)(1), MUMBAI [AO] U/S 143(3) OF THE INCOME TAX A CT,1961 ON 24/12/2007. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED AS MANUFACTURER & TRADER OF SYNTHETIC DETERGENTS, SOAPS, OILS ETC. WAS ASSESSED FOR IMPUGNED AY AT RS.29.05 LACS AS AGAINST RETURNED INCOME OF RS.9.40 LACS FIL ED BY THE ASSESSEE ON 26/10/2005. 2.2 DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THA T THE ASSESSEE CLAIMED COMMITMENT CHARGES OF RS.18 LACS IN THE PROFIT & LOSS ACCOUNT. IT WAS FOUND THAT THE SAME WERE PAID @1.5 LACS PER MONTH TO ASSESSEES HOLDING COMPANY NAMELY MUSKAN PROJECTS PRIVATE LTD. [PAYEE] IN TERMS OF AGREEMENT DATED 10/05/2004. THE ASSESS EE SUBMITTED THAT THE COMMITMENT CHARGES WERE PAID TO OBTAIN PRODUCTION CAPACITY IN FUTURE. HOWEVER, THE SAID PAYMENT, IN T HE OPINION OF LD. AO, ATTRACTED THE PROVISIONS OF SECTION 40A(2)(A) AND M OREOVER, THE PAYMENT WAS OVER AND ABOVE THE ACTUAL LABOR / PROCESSING CHARGES PAID BY THE ITA NO.1082 &1083//MUM/2013 NEW ERA MERCANTILE PRIVATE LIMITED ASSESSMENT YEARS-2005-06 & 2007-08 3 ASSESSEE TO THE PAYEE. SINCE THE PAYMENT WERE MADE WITHOUT PURCHASING ANY GOODS OR AVAILING ANY SERVICES, THE SAME WERE DISALLOWED IN TERMS OF SECTION 40A(2)(A). ALTERNATI VELY, THE LD. AO FURTHER CONCLUDED THAT THE SAME WERE NOT ALLOWABLE TO THE A SSESSEE IN TERMS OF SECTION 40(A)(IA) ALSO SINCE NO TAX AT SOURCE WAS D EDUCTED THERE AGAINST. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 22/11/2 012 WHERE LD. CIT(A), AFTER CONSIDERING ASSESSEES SUBMISSIONS, U PHELD THE STAND OF LD. AO. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEA L BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE [AR], AT THE OU TSET, PLEADED FOR ADMISSION OF ADDITIONAL EVIDENCES WHICH WAS VEHEMEN TLY OPPOSED BY LD. DEPARTMENTAL REPRESENTATIVE [DR] ON THE PREMISE S THAT NOTHING PRECLUDED THE ASSESSEE TO ADDUCE THE SAME DURING AS SESSMENT AS WELL AS APPELLATE PROCEEDINGS. 5. HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. ALTHOUGH UPON PERUSAL OF QUANTUM ORDER AS W ELL AS APPELLATE ORDER, WE FIND THE SAME TO BE REASONED ONE YET IN T HE INTEREST OF JUSTICE AND FAIR PLAY, WE SEE NO HARM IN PROVIDING ANOTHER OPPORTUNITY TO THE ASSESSEE TO DEFEND HIS CASE IN THE LIGHT OF THE ADD ITIONAL EVIDENCES. HENCE, WITHOUT DELVING MUCH DEEPER INTO THE ISSUE, WE REMIT THE MATTER BACK TO THE FILE OF LD. AO TO RE-ADJUDICATE THE ISS UE AFTER CONSIDERING ADDITIONAL EVIDENCES BEING SUBMITTED BY THE ASSESSE E. THE ASSESSEE, IN TURN, IS DIRECTED TO SUBSTANTIATE HIS CLAIM IN TERM S OF SECTION 37(1), 40A(2)(A) & 40(A)(IA). RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1082 &1083//MUM/2013 NEW ERA MERCANTILE PRIVATE LIMITED ASSESSMENT YEARS-2005-06 & 2007-08 4 6. THE ASSESSEE, IN SIMILAR MANNER, IN AY 2007-08 H AS BEEN SADDLED WITH DISALLOWANCE OF RS.15 LACS WHICH HAS SINCE BEE N CONFIRMED BY LD. CIT(A) BY FOLLOWING THE DECISION IN AY 2005-06. SIN CE, THE ISSUE IS IDENTICAL IN ALL RESPECT, THE SAME IS ALSO RESTORED BACK TO THE FILE OF LD. AO WITH SIMILAR DIRECTIONS. 7. RESULTANTLY, BOTH THE APPEALS FILED BY THE ASSES SEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 13.12 .2017 SR.PS:- THIRUMALESH ! / 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