Appeal details
Counselvise Citation
12919914 RSA 2012
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 11 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-12-2014
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
E
Next Hearing Date
15-12-2014
Assessment Year
2008-2009
Appeal Filed On
06-01-2012
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI JOGINDER SINGH, JM & SHRI R.C.SHARMA, AM ITA NO. 129 / MUM /20 1 2 ( ASSESSMENT YEAR : 200 8 - 20 0 9 ) M/S SODEXO FACILITIES MANAGEMENT SERVICES INDIA PRIVATE LIMITED, GEMSTAR COMMERCIAL COMPLEX, 1 ST FLOOR, RAMCHANDRA LANE EXTENSION, KANCHPADA, MALAD (W), MUMBAI - 400 064 VS. ITO 9(3)(2 ), MUMBAI - 20 PAN/GIR NO. : A A B CS 4166 M ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI M.A. G OHEL /REVENUE BY : SHRI NEIL PHILIP DATE OF HEA RING : 1 5 TH DECEMBER , 201 4 DATE OF PRONOUNCEMENT 31/12/2014 O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 2 - 10 - 2011 , FOR THE ASSESSMENT YEAR 200 8 - 200 9 , IN THE MATTER OF ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, WHEREIN THE ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF RS. 9 LAKHS FOR ALLEGED FRAUDULENT PAYMENT MADE TO THE EMPLOYEES . 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FROM THE RE CORD, WE FOUND THAT DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO ITA NO. 129 / 12 2 FOUND FROM ACCOUNTS THAT RS.9 LAKHS HAS BEEN INDIRECTLY CLAIMED AS EXPENDITURE ON ACCOUNT OF FRAUD COMMITTED BY CERTAIN EMPLOYEES BY WAY OF PAYMENT TO DUMMY EMPLOYEES. THE AO DISALLOWED T HE SAME BY OBSERVING THAT PAYMENT WAS MADE FRAUDULENTLY BY THE EMPLOYEES, THEREFORE, CANNOT BE ALLOWED AS BUSINESS EXPENDITURE. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ACTION OF THE AO. 3 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ASSES SEE IS ENGAGED IN THE BUSINESS OF CATERING SERVICES AND FACILITY MANAGEMENT SERVICES. EMPLOYEE OF ASSESSEE FRAUDULENTLY MADE CERTAIN PAYMENT IN THE NAME OF DUMMY EMPLOYEE, WHICH WAS CLAIMED BY ASSESSEE AS BUSINESS EXPENDITURE. ON PERUSAL OF THE SCHEDULES ANNEXED TO ANNEXURE STATEMENT, IT IS SEEN THAT IN NOTES TO ACCOUNT PARA 4(E), THE AUDITOR HAS OBSERVED AS UNDER : - A CASE OF FRAUD, COMMITTED BY CERTAIN EMPLOYEES, BY WAY OF FRAUDULENT PAYMENT MADE TO EMPLOYEES/DUMMY EMPLOYEES HAS BEEN REPORTED AND THE AM OUNT WERE OF IS ESTIMATED TO BE RS. 1,000,000 THE COMPANY HAS RECOVERED RS.100,000 FROM THE EMPLOYEES CONCERNED. WE FOUND THAT WHATEVER THE PAYMENT WAS MADE BY THE EMPLOYEES OF THE ASSESSEE WAS IN THE NORMAL COURSE OF BUSINESS AND SUBSEQUENTLY IT WAS FOU ND THAT THE SAID PAYMENT WAS FRAUDULENTLY MADE BY THE EMPLOYEES OF THE ASSESSEE. WHEN THIS FACT CAME TO THE KNOWLEDGE OF ASSESSEE, THE ASSESSEE IMMEDIATELY STRUCK THOSE EMPLOYEES. THUS, WE FOUND THAT THE FRAUD HAS BEEN COMMITTED BY THE EMPLOYEES AND NOT BY THE ASSESSEE AND THE SAME WAS ALSO IN THE NORMAL COURSE OF ASSESSEES BUSINESS, WHEREIN THE SAID EMPLOYEE WAS ENTRUSTED WITH THE DUTY TO MAKE PAYMENT TO OTHER EMPLOYEES. PROPER NOTING WAS GIVEN IN THE AUDIT REPORT. THE ASSESSEE ITA NO. 129 / 12 3 H AS ALSO TAK EN NECESSARY AC TION FOR RECOVERY OF THE SAME. AS A RESULT OF EFFORTS, THE ASSESSEE HAS ALREADY RECOVERED RS. 1 LAKHS OUT OF RS.10 LAKHS BEING ALLEGED PAYMENT TO THE EMPLOYEE/DUMMY EMPLOYEES. ACCORDINGLY, RS.9 LAKHS WAS CLAIMED BY ASSESSEE AS BUSINESS EXPENDITURE. THE CLAI M OF THE ASSESSEE WAS NOT FOUND TO BE FALSE. KEEPING IN VIEW TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE DIRECT THE AO TO ALLOW THE CLAIM OF RS.5 LAKHS . THE DEPARTMENT IS AT LIBERTY TO TAX THE AMOUNT IN SUBSEQUENT YEAR, IF THERE IS ANY RECOVERY IN RESPECT OF SUCH PAYMENT. WE DIRECT ACCORDINGLY. 4 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 /12 / 201 4 . 31 /12 / 2014 SD/ - SD/ - ( ) ( JOGINDER SINGH ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 31 /12 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6 . GUARD FILE. //TRUE COPY//
