Vishranthi Homes P Ltd., CHENNAI V. DCIT Corporate Circle 3(2), CHENNAI

ITA 1171/CHNY/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0161 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH PERIASAMYJCIT
• Assessee Lawyers: S SRIDHAR
• Keywords: TDS; Set aside
• Section: 143(3); 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ ITA NO.: 1171/CHNY/2019 / ASSESSMENT YEAR: 2012-13 M/S. VISHRANTHI HOMES P.LTD., NO.351, VADHIRAJA CENTRE, AVVAI SHANMUGAM SALAI, GOPALAPURAM, CHENNAI 600 086. PAN : AABCV3915D V. THE DCIT, CORPORATE CIRCLE 3(2), CHENNAI 34. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI SURESH PERIASAMY,JCIT /DATE OF HEARING : 29.12.2020 /DATE OF PRONOUNCEMENT : 29.12.2020 / O R D E R PER MAHAVIR SINGH, VP: THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-7, CHENNAI, IN ITA NO.80(T)/CIT(A)-7/2015-16 DATED 14.03.2019. THE ASSESSMENT WAS FRAMED BY DCIT, CORPORATE CIRCLE -3(2), CHENNAI U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) FOR THE A.Y. 2012-13 VIDE ORDER DATED 27.03.2015. 2 I.T.A. NO.1171/CHNY/2019 2. IN THIS APPEAL OF THE ASSESSEE, THE FOLLOWING ARE THE THREE ISSUES RAISED BY WAY OF SEVEN GROUNDS:- I. DISALLOWANCE OF FOREIGN TRAVEL EXPENSES TO THE TUNE OF RS.3,56,231/- U/S.37(1) OF THE ACT. II. DISALLOWANCE OF THE CLAIM OF EXPENSES INCURRED U/S.35D OF THE ACT. III. DISALLOWANCE OF THE CLAIM OF PAYMENT MADE TO COMMERCIAL DEPARTMENT FOR NON-PAYMENT OF TDS U/S.3 OF T.N. VAT ACT, 2006. 3. AT THE OUTSET THE LD.COUNSEL FOR THE ASSESSEE TOOK US TO THE FINDINGS GIVEN BY THE CIT(A) AT PAGES 4 & 5 IN RELATION TO THESE THREE ISSUES AND HE READ OUT THE FINDINGS OF THESE THREE ISSUES. THE RELEVANT FINDINGS GIVEN BY THE CIT(A) ON THESE THREE ISSUES READS AS UNDER:- FOREIGN TRAVEL EXPENSES - RS3,52,231/-: FOREIGN TRAVEL EXPENSES HELD TO BE OF PERSONAL NATURE. THE AO DISALLOWED THE CLAIM ON THE GROUND THAT NO EVIDENCE WAS PRODUCED TO ESTABLISH THE BUSINESS NEXUS BETWEEN THE TRAVEL UNDERTAKEN AND THE BUSINESS OF THE APPELLANT. IN THE APPELLATE PROCEEDINGS ALSO, NOTHING FURTHER HAS BEEN FURNISHED TO JUSTIFY THE EXPENDITURE ADS ORDER THEREFORE NEEDS NO INTERFERENCE AND THIS GROUND STANDS DISMISSED. IV. DISALLOWANCE OF EXPENDITURE U/S 35D OF THE ACT- RS.2911/-: 3 I.T.A. NO.1171/CHNY/2019 THE AO HAS DISALLOWED THE SAID SUM ON THE GROUND THAT THE AMOUNT (WHICH IS PRELIMINARY EXPENSES WRITTEN OFF) HAS BEEN CLAIMED BEYOND 5 YEARS AND HENCE IS NOT ALLOWABLE. NO INTERFERENCE IN AOS ORDER IS CALLED FOR AS THE SAME IS AS PER THE ACT. THIS GROUND STANDS DISMISSED. V. DISALLOWANCE OF PENALTY ON WORK CONTRACT TAX - RS.5,08,386/-: THE AC FOUND THAT APPELLANT HAD PAID THE PENALTY TO COMMERCIAL TAX DEPARTMENT FOR NON-PAYMENT OF TDS UNDER SECTION 3 OF THE TN VAT. ACT 2006. I FIND THAT THE AOS DISALLOWANCE IS ON A CORRECT FOOTING SINCE PENALTY IS NOT AN ALLOWABLE EXPENDITURE AS PER SECTION 37 OF THE I.T. ACT. THIS GROUND THEREFORE STANDS DISMISSED. 4. THE LD.COUNSEL POINTED OUT FROM THE ABOVE REPRODUCED FINDINGS THAT NO FACTS HAS BEEN DISCUSSED BY THE CIT(A), RATHER HE HAS SIMPLY CONFIRMED THE ORDER OF AO WITHOUT ANY DISCUSSION. HENCE, HE REQUESTED FOR SETTING ASIDE ALL THESE ISSUES TO THE FILE OF THE CIT(A) AFRESH. WHEN A QUERY WAS PUT TO LD.SENIOR DEPARTMENTAL REPRESENTATIVE, HE FAIRLY AGREED FOR SETTING ASIDE THESE THREE ISSUES BACK TO THE FILE OF THE CIT(A). 5. AFTER HEARING BOTH THE SIDES AND GOING THROUGH THE ORDER OF THE CIT(A), WE ARE CONVINCED THAT THE CIT(A) HAS NOT DISCUSSED ANY OF THE FACTS AND SIMPLY CONFIRMED THE ORDER OF THE AO. HENCE IN THE EARNEST OF THINGS, WE SET ASIDE THE ORDER OF CIT(A) AND REMAND THE MATTER BACK FOR FRESH ADJUDICATION AFTER 4 I.T.A. NO.1171/CHNY/2019 ALLOWING REASONABLE OPPORTUNITY TO THE ASSESSEE. MATTER RESTORED BACK TO THE FILE OF THE CIT(A). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 29 TH DECEMBER, 2020 AT CHENNAI. SD/- SD/- ( . ) (G. MANJUNATHA) /ACCOUNTANT MEMBER ( ) (MAHAVIR SINGH) /VICE PRESIDENT /CHENNAI, /DATED, THE 29 TH DECEMBER, 2020 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF.