Appeal details
Counselvise Citation
[2018] 112 COUNSELVISE.COM (IT) 3568 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-09-2018
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
C
Assessment Year
2012-2013
Appeal Filed On
09-04-2018
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , ' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER / .I.T.A. NO. 1211/CHNY/2018 /ASSESSMENT YEAR : 2012-13 HMH EDUCATION CONSULTANTS (INDIA) PVT. LTD., NO. 2/3, CATHEDRAL GARDEN ROAD, NUNGAMBAKKA, CHENNAI 600 034. [PAN: AABCH 1210M] VS. INCOME TAX OFFICER, CORPORATE WARD 2(3), CHENNAI. ( /APPELLANT) ( /RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI. CLEMENT RAMESH KUMAR, ADDL. CIT $ /DATE OF HEARING : 18.09.2018 $ /DATE OF PRONOUNCEMENT : 27.09.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-34, CHENNAI IN ITA NO. 59/CIT( A)-13/2012-13 DATED 08.02.2018 FOR ASSESSMENT YEAR 2012-13. :- 2 -: ITA NO. 1211/CHNY/2018 2. M/S. HMH EDUCATION CONSULTANTS (INDIA) PVT. LTD. , THE ASSESSEE, IS A COORDINATOR OF THE ANNAMALAI UNIVERSITY FOR CONDUCT ING DISTANCE EDUCATION PROGRAM. THE ONLY BUSINESS OF THE COMPANY IS TO AC T AS IMPLEMENTING AGENT OF M/S. ANNAMALAI UNIVERSITY FOR THE INFORMATION TE CHNOLOGY EDUCATION IN DUAL DEGREE CURRICULUM. AS PER THE AGREEMENT DATED 10.0 4.20008 WITH M/S. ANNAMALAI UNIVERSITY, THE ASSESSEE HAS RESPONSIBILI TY OF CONDUCTING DISTANCE EDUCATION AT DIFFERENT PLACES OF THE COUNTRY, FOR W HICH IT HAD APPOINTED CERTAIN LIAISONING OFFICERS, PAID REMUNERATION TO THEM WAS SHOWN AS CURRICULUM SUPERVISORY EXPENSES. WHILE MAKING THE ASSESSMENT FOR ASSESSMENT YEAR 2012-13, THE ASSESSING OFFICER FOUND THAT THE ASSES SEE CLAIMED CURRICULUM SUPERVISORY EXPENSES AT RS. 46,58,000/-. IT EXPLA INED THAT THIS PAYMENTS WERE MADE TO THE SUPERVISORS WHO ACTUALLY MONITOR T HE PERFORMANCE OF THE ASSOCIATES. ONE OF SUCH PERSON IS APPOINTED FOR EV ERY CENTRE TO LOOK AFTER THE CONDUCT OF THE CENTRE AND REPORT ANY DEFICIENCY OF THE PERFORMANCE OF THE ASSOCIATES ETC. SINCE, THE SCOPE OF WORK DONE BY T HE SO CALLED MONITORS, THEIR ABILITY AND THE DEFINITION OF MONITORING IS NOT EXP LAINED, THE AO DISALLOWED THE ENTIRE SUM. AGGRIEVED, THE ASSESSEE FILED AN APPEA L BEFORE THE LD. CIT(A). 3. BEFORE THE LD. CIT(A), THE ASSESSEE PLEADED THA T IN THE ASSESSMENT MADE FOR ASSESSMENT YEAR 2010-11, THE AO HAS DISALL OWED 25% OF THE CLAIM AND IN ASSESSMENT YEAR 2011-12, HE DISALLOWED THE E NTIRE AMOUNT. THE ITAT IN ITS ORDER IN ITA NO 1789/MDS/2015 HAS CONFIRMED THE DISALLOWANCE OF SUCH EXPENSES @ 25% AND HENCE, PLEADED BEFORE THE LD. CI T(A) THAT THE :- 3 -: ITA NO. 1211/CHNY/2018 DISALLOWANCE MADE KINDLY BE RESTRICTED TO 25% AND J USTICE TO BE RENDERED. THE LD. CIT(A) HELD THAT SINCE THE GENUINENESS OF T HE CURRICULUM EXPENSES IS NOT EXPLAINED BEFORE THE ASSESSING OFFICER, THE ASS ESSEES CLAIM IS NOT SUSTAINABLE AND HENCE, DISMISSED THE APPEAL. AGGRI EVED, THE ASSESSEE FILED THIS APPEAL PLEADING THAT THE ASSESSEE IS SOLELY RE SPONSIBLE FOR THE CONDUCT OF THE COURSE WHICH NECESSITATED FOR INCURRING THE IMP UGNED EXPENDITURE AND THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE I NCURRING OF SUCH EXPENDITURE IS SINE QUA NON FOR THE ASSESSEE COMPANY ETC. 4. AT THE TIME OF HEARING, NONE APPEARED FROM THE A SSESSES SIDE, THOUGH THE HEARING NOTICE WAS SERVED ON ASSESSEE ON 12.07. 2018 AND ITS ACKNOWLEDGEMENT WAS PLACED ON THE RECORD. THE LD. DR FURNISHED A COPY OF THIS TRIBUNAL DECISION IN ITA NO. 1789/MDS/2015 DAT ED 10.02.2016 AND RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HEARD THE LD. DR AND PERUSED THE RELEVANT MAT ERIAL. AS STATED ABOVE, THIS ISSUE IS RECURRENT ONE. IT IS SEEN FRO M THE ORDER OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12 , THAT THE ASSESSING OFFICER DISALLOWED 25% OF THE EXPENDITURE IN ASSESS MENT YEAR 2010-11, HOWEVER, IN ASSESSMENT YEAR 2011-12, HE DISALLOWED THE ENTIRE CLAIM. ON AN APPEAL, THE LD. CIT(A) HAS OBSERVED THAT THE ASSESS EE COMPANY HAS A RESPONSIBILITY OF CONDUCTING THE DISTANCE EDUCATION AT DIFFERENT PLACES OF THE COUNTRY FOR WHICH IT HAD APPOINTED CERTAIN LIAISONI NG OFFICERS, THE REMUNERATION :- 4 -: ITA NO. 1211/CHNY/2018 PAID TO THEM WAS SHOWN AS CURRICULUM DEVELOPMENT E XPENSES WHICH WERE MADE AT DIFFERENT PLACES AT DIFFERENT TIMES. THE D ISALLOWANCE WAS PRIMARILY MADE FOR WANT OF NECESSARY EVIDENCES AND THE ASSESS EE FAILED TO FURNISH THE DETAILS AND EVIDENCES TO PROVE THAT THE EXPENSES CL AIMED ARE GENUINE. IN THE CIRCUMSTANCES, HE CAME TO THE CONCLUSION THAT THE D ISALLOWANCE OF EXPENSES FOR WANT OF DETAILS AND EVIDENCES REQUIRED AND ACCO RDINGLY DIRECTED THE AO TO DISALLOW 25%. 6. THE FACTS REMAINS SAME FOR THIS ASSESSMENT YEAR ALSO. THE ENTIRE SUM RECEIVED BY THE ASSESSEE IS TOWARDS THE SAME BUSINE SS. WHEN THE ASSESSEE HAS RECEIVED INCOME, IT MUST INCUR EXPENDITURE ALSO . HOWEVER, IT COULD NOT PROVE THE GENUINENESS TO THE SATISFACTION. IN THE CIRCUMSTANCES, A REASONABLE DISALLOWANCE COULD BE MADE UNLESS OTHERWISE THERE I S A FINDING THAT THE ASSESSEE HAS NOT RENDERED ANY SERVICE AT ALL. THER E IS NO SUCH FINDING. IN THE FACTS AND CIRCUMSTANCES, WE DEEM IT FIT AS HELD IN EARLIER YEARS, THAT A DISALLOWANCE OF 25% OF THE ASSESSEES CLAIM WOULD M EET THE ENDS OF JUSTICE AND ACCORDINGLY WE SUSTAIN THE DISALLOWANCE TO THE EXTENT OF 25% OF THE CLAIM OF RS. 46,58,000/-. TO THIS EXTENT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. :- 5 -: ITA NO. 1211/CHNY/2018 7. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 27 TH DAY OF SEPTEMBER, 2018 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, ) /DATED: 27 TH SEPTEMBER , 2018 JPV $*+,-, /COPY TO: 1. / /APPELLANT 2. *0/ /RESPONDENT 3. 1 ) ( /CIT(A) 4. 1 /CIT 5. ,* /DR 6. 4 /GF
