Hansa Research Group Private Limited, Mumbai V. ACIT Corporate Circle 2(2), CHENNAI

ITA 1308/CHNY/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4115 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 19-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J PAVITHRAN KUMAR
• Assessee Lawyers: L SHIBI CS
• Keywords: Depreciation; Capital expenditure
• Section: 2(22)(e); 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , , ! '# BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 1308/CHNY/2018 / ASSESSMENT YEAR : 2012-13 M/S. HANSA RESEARCH GROUP PRIVATE LTD., NO: 24, SAHNEY BUSINESS CENTER, FIRST FLOOR, KIROL ROAD, VIDYA VIHAR, MUMBAI 400 086. [PAN: AAACH 9516M] VS. ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(2), 121, M.G. ROAD, NUNGAMBAKKAM, CHENNAI 600 034. ( / APPELLANT) ( $%&' /RESPONDENT ) &' ( ) / APPELLANT BY : SHRI. L. SHIBI, CS $%&' ( ) / RESPONDENT BY : SHRI. J. PAVITHRAN KUMAR, JCIT + (,! /DATE OF HEARING : 13.02.2020 -./ (,! /DATE OF PRONOUNCEMENT : 14.02.2020 / 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)-13 IN ITA NO. 212/CIT(A)- 13/2012-13 DATED 08.02.2018 FOR ASSESSMENT YEAR 201 2-13-. :-2-: ITA NO. 1308/CHNY/2018 2. M/S. HANSA RESEARCH GROUP PVT. LTD., THE ASSESSE E IS ENGAGED IN MARKET RESEARCH WORK. WHILE MAKING THE ASSESSMENT FOR ASSESSMENT YEAR 2012-13, THE ASSESSING OFFICER, INTER ALIA, EX AMINED THE ASSESSEES TRANSACTION WITH M/S. HANSA VISION INDIA PVT. LTD A ND FOUND THAT SHRI KRISHNASWAMY SRINIVASAN AND SHRI KRISHNASWAMY NARAS IMHAN, DIRECTORS OF THE ASSESSEE COMPANY, EACH HOLDING 33% STAKE IN THE COMPANY WHICH HAS GOT ACCUMULATED RESERVES AND SURPLUS. BOTH OF THE DIRECTORS WERE STAKEHOLDERS WITH M/S. HANSA VISION INDIA PVT. LTD. AFTER EXAMINING THE TRANSACTIONS HE INVOKED SECTION 2(22)(E) AND ADDED RS. 50,00,000/- TO THE RETURNED INCOME. FURTHER, THE AO FOUND THAT TH E ASSESSEE CLAIMED DEPRECIATION AT 10% UNDER THE HEAD TEMPORARY STRUCT URES. AFTER EXAMINING THE DOCUMENTS FILED BY THE ASSESSEE, HE H ELD THAT THE ASSETS PURCHASED ARE OF A PERMANENT STRUCTURE GIVING ENDU RING BENEFITS TO THE ASSESSEE. THEREFORE, HE TREATED THE EXPENDITURE CL AIMED BY THE ASSESSEE AS CAPITAL EXPENDITURE AND ALLOWED THE DEPRECIATION AT APPLICABLE RATE AND DISALLOWED THE BALANCE SUM AND ADDED TO THE RETURNE D INCOME. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE CIT (A). THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIEVED AGAINST THAT ORDER THE ASSESSEE FILED THIS APPEAL. :-3-: ITA NO. 1308/CHNY/2018 3. THE LD. AR INVITING OUR ATTENTION TO PAGE 26 OF THE PAPER BOOK, WHERE DETAILS OF SHAREHOLDERS AND DEBENTURES AT THE DATE OF AGM I.E., 24.09.2012 IS PLACED, SUBMITTED THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION U/S. 2(22)(E) BY COMPLETELY MISUNDERS TANDING THE FACTS. THE LD. CIT(A) ACTUALLY COMMITTED AN ERROR IN APPLY ING SECTION 2(22)(E) WHEN THE SECTION IS NOT APPLICABLE IN A SCENARIO WH ERE A LOAN IS GIVEN BY A HOLDING COMPANY TO A SUBSIDIARY COMPANY. ONLY IF A LOAN OR ADVANCE IS GIVEN TO A SHAREHOLDER THE SECTION IS ATTRACTED. T HE PRESENT CASE IS EXACTLY OPPOSITE WHEREIN THE LOAN IS GIVEN BY A SHA REHOLDER. THE CONDITION LAID DOWNIN CIRCULAR NO. 495 DATED 22.09. 1987 ARE ALSO NOT SATISFIED AS IN THE GIVEN CASE THERE ARE NO COMMON SHAREHOLDERS BETWEEN THE LENDER AND THE ASSESSEE. PER CONTRA, THE LD. D R SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED THE RELEVANT DETAILS EIT HER BEFORE THE AO OR BEFORE THE LD. CIT(A). THEREFORE, THE FACTS AND CI RCUMSTANCES ASSOCIATED WITH THE ISSUE HAS NOT BEEN EXAMINED BY THE LOWER A UTHORITIES. FURTHER, HE SUBMITTED THAT EVEN THE DETAILS FURNISHED BEFORE THE HONBLE ITAT ITSELF IS INDICATING THE DETAILS OF SHAREHOLDER PAR TNERS AS ON THE DATE OF AGM I.E., 24.09.2012. THEREFORE, THE LD. DR PRAYED THAT THIS ISSUE MAY BE REMITTED BACK TO THE AO FOR A DUE EXAMINATION. 4. ON THE ISSUE OF DEPRECIATION ON TEMPORARY STRUCT URE CLAIMED BY THE ASSESSEE, THE LD. AR INVITING OUR ATTENTION TO THE PARTICULARS FILED IN THE :-4-: ITA NO. 1308/CHNY/2018 PAPER BOOK IN PAGE 68 & 69 ETC., SUBMITTED THAT THE INVOICES INDICATED THAT THE ASSETS ACQUIRED WERE FOR TEMPORARY STRUCTU RE AND INSTALLED IN A RENTED PREMISES. WHEN THE BENCH ASKED AS TO WHAT H APPENED IN THE SUBSEQUENT ASSESSMENT YEAR, THE LD. AR SUBMITTED TH AT THEY VACATED THE PREMISES AND ALLOWED THESE STRUCTURES TO REMAIN AS SUCH. PER CONTRA, THE LD. DR SUBMITTED THAT FROM THE ORDERS OF THE LOWER AUTHORITIES, IT IS CLEAR THAT THE ASSESSEE HAS FURNISHED ONLY ONE VOUCHER AN D NOT THE ENTIRE PARTICULARS. THEREFORE, HE SUBMITTED THAT THE DETA ILS PLACED BEFORE THE PAPER BOOK WERE NOT EXAMINED BY THE LOWER AUTHORITI ES. THEREFORE, THE LD. DR PLEADED THAT THE FACTS ASSOCIATED CIRCUMSTAN CES NEEDS EXAMINATION AT LOWER LEVEL. 5. WE HEARD THE RIVAL SUBMISSIONS. IT IS CLEAR FRO M THE ABOVE THAT THE ASSESSEE HAS NOT FURNISHED THE RELEVANT MATERIAL BE FORE THE LOWER AUTHORITIES FOR DUE EXAMINATION. THEREFORE, WE ARE OF THE VIEW THAT THESE ISSUES REQUIRE A FRESH EXAMINATION AND HENCE SET AS IDE THE ORDERS OF THE LOWER AUTHORITIES FOR A FRESH EXAMINATION. THE ASS ESSEE SHALL LAY RELEVANT MATERIALS IN SUPPORT OF ITS CONTENTION BEF ORE THE AO AND COMPLY WITH THE REQUIREMENTS OF THE AO IN ACCORDANCE WITH LAW. THE AO IS FREE TO CONDUCT APPROPRIATE ENQUIRY AS DEEMED FIT, BUT HE SHALL FURNISH ADEQUATE OPPORTUNITY TO THE ASSESSSEE ON THE MATER IAL ETC TO BE USED AGAINST IT AND DECIDE THE MATTER IN ACCORDANCE WIT H LAW. :-5-: ITA NO. 1308/CHNY/2018 6. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, 14 TH FEBRUARY, 2020 AT CHENNAI. SD/- ( ) (MAHAVIR SINGH) !' /VICE PRESIDENT SD/- ( # $ ) (S. JAYARAMAN) % & /ACCOUNTANT MEMBER /CHENNAI, 0' /DATED: 14 TH FEBRUARY, 2020 JPV '1($2,343/, /COPY TO: 1. &' / APPELLANT 2. $%&' /RESPONDENT 3. + 5, ) ( /CIT(A) 4. + 5, /CIT 5. 367$2,2 /DR 6. 789: /GF