C Marc (India) Pvt. Ltd., Kolkata V. DCIT, CIR-6(2), KOLKATA, Kolkata

ITA 1310/KOL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1810 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 16-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOUMYAJIT DASGUPTA CIT LD
• Assessee Lawyers: M K DATTA FCA LD
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH, KOLKATA BEFORE : SHRI M. BALAGANESH,ACCOUNTANT MEM BER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 1310/KOL/2015 A.Y : 2008-09 M/S. C.MARC (INDIA) VS. D.C.I.T. CIR-6(2), KOLKATA PVT. LTD. PAN:AABCC0664Q [APPELLANT-ASSESSEE ] [DEPARTMENT-RESPONDE NT ] APPELLANT BY : SHRI M.K. DATTA, FCA, LD.AR RESPONDENT BY : SHRI SOUMYAJIT DASGUPTA, ADDL .CIT, LD.DR DATE OF HEARING : 15-11-2017 DATE OF PRONOUNCEMENT : 12-01-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDE R DT. 06-08- 2015 OF THE CIT-A, 4, KOLKATA FOR THE A.Y : 2008-0 9. 2. THE ONLY EFFECTIVE ISSUE IS TO BE DECIDED AS TO WHETHER THE CIT- A JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS.14 LAKHS MADE UNDER THE HEAD REPAIRS & MAINTENANCE BY THE AO IN THE FACT AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MANA GEMENT CONSULTANCY. THE ASSESSEE FILED ITS E-RETURN OF INC OME DECLARING TOTAL INCOME OF RS. 4,47,78,320/-. UNDER THE SCRUTINY, NO TICE U/S. 143(2) OF THE ACT DT. 24-08-09 WAS ISSUED. IN RESPONSE TO WHICH, THE AR OF THE ASSESSEE APPEARED AND FILED COPIES OF RELEVANT DETAILS I.E TAX AUDIT REPORT (TAR) AND BOOKS OF ACCOUNT, WHICH WERE TEST CHECKED AND EXAMINED BY THE AO. THE AO DETERMINED THE TOTAL INCOME AT RS.4,90,36,960/- AS AGAINST OF RS.4,47,78,320/- RET URNED BY THE ITA NO. 1310/KOL/2015 C. MARE (I) P.LTD 2 ASSESSEE, INTER-ALIA BY MAKING VARIOUS DISALLOWANCE S VIDE HIS ORDER DT. 31-12-2010 PASSED U/S. 143(3) OF THE ACT. 4. DURING THE ASSESSMENT PROCEEDINGS THE AO REQUEST ED THE ASSESSEE TO SUBMIT THE DETAILS OF REPAIR & MAINTENA NCE EXPENSES AS CLAIMED BY IT IN THE RETURN. THE ASSESSEE FILED WRI TTEN SUBMISSIONS BY STATING THAT IT HAS PAID RS.15.65 LAKHS AND RS.15.7 3 UNDER THE HEADS REPAIRS & MAINTENANCE TO FLAT AND OTHERS PAID TO VARIOUS PARTIES. FOR NON SUBMISSION OF ANY EVIDENCE/BILL AND VOUCHER ET. ., THE AO DISALLOWED OF RS.7,00,000/-EACH UNDER BOTH THE HEAD S BY STATING AS UNDER:- 4.0 REPAIRS AND MAINTENANCE OF RS.31.38 LAKHS DURING THE COURSE OF SCRUTINY PROCEEDINGS THE ASSES SEE WAS REQUESTED TO SUBMIT THE DETAILS OF REPAIRS AND MAINTENANCE EXPENSES. THE AS SESSEE FILED A WRITTEN SUBMISSION WHEREIN IT HAS BEEN STATED THAT REPAIRS AND MAINTEN ANCES TO FLAT OF RS.15.65 LAKHS AND OTHERS OF RS.15.73 LAKHS PAID TO THE VARIOUS PARTIE S WITHOUT ANY EVIDENCE/BILL/VOUCHER ETC. THE ASSESSEES CONTENTION IS NOT ACCEPTABLE. H ENCE, RS.7,00,000/- UNDER THE OF FLAT AND RS.7,00,000/- UNDER THE HEAD OF OTHERS ARE BEIN G ADDED TO THE TOTAL INCOME.. 5. THE ASSESSEE CHALLENGED THE ABOVE BEFORE THE CIT -A AND CONTENDED THAT INSPITE OF HAVING FILING OF DETAILS , BOOKS OF ACCOUNT AND AUDITED ACCOUNTS BEFORE THE AO BY SUPPORTING V OUCHERS, EVIDENCES AND DOCUMENTS IN RESPECT OF ALL EXPENSES DURING THE ASSESSMENT PROCEEDINGS THE AO ARBITRARILY DISALLOWE D AT @ 50% APPROXIMATELY I.E. AT RS.7,00,000/- AND RS.7,00,000 /- ON BOTH THE HEADS I.E. UNDER THE HEADS REPAIRS & MAINTENANCE AND OTHERS ON THE REASON THAT NO EVIDENCES RELATING TO SAID EXPEN DITURE WERE NOT FILED BEFORE THE AO BY THE ASSESSEE. BEFORE THE CIT -A THE ASSESSEE SUBMITTED THAT THE EXPENDITURE INVOLVED IN THE IMPU GNED ADDITION INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE ASSESSEE HAS BEEN FOLLOWING THE SAME METHOD OF ACCO UNTING POLICY CONSISTENTLY AND REGULARLY SINCE VERY INCEPTION OF THE ASSESSEE COMPANY. 6. THE CIT-A CONSIDERING THE SUBMISSIONS OF THE AS SESSEE CONFIRMED THE SAID DISALLOWANCE AS MADE BY THE AO B Y OBSERVING THAT THE ASSESSEE HAS NOT MADE ANY EFFORT TO ESTABLISH A S TO WHAT ITA NO. 1310/KOL/2015 C. MARE (I) P.LTD 3 EXPENSES WERE INCURRED ON REPAIRS AND UPKEEP. RELEV ANT PORTION OF FINDING OF THE CIT-A ON THIS ISSUE IS REPRODUCED HE REIN BELOW:- 6.2 I HAVE CONSIDERED THE ARS SUBMISSION AND PER USED THE ASSESSMENT ORDER. I FIND THAT THE ORDER OF THE AT IS CRYPTIC ON THE SUB JECT. AT THE SAME TIME HOWEVER, I FIND THAT THE AR DID NOT HELP THE MATTER BECAUSE HIS SUB MISSIONS IN THE COURSE OF APPEAL WERE ALSO AS CRYPTIC,. IN THE INCOME TAX PROCEEDINGS ONU S OF LEADING THE EVIDENCE IN SUPPORT OF THE DEDUCTION CLAIMED IS ON THE ASSESSEE. THE AR OF THE APPELLANT DID NOT BRING ON RECORD ANY COGENT MATERIAL IN SUPPORT OF THE FACT THAT DET AILS OF EXPENSES TO THE TUNE OF RS.31.38 LACS WERE FILED BEFORE THE AO. NO DOUBT TRUE THAT T HE ASSESSEE WAS REQUIRED TO INCUR THE EXPENSES ON UPKEEP OF THE PREMISE BUT THE ONUS OF P ROVING THE GENUINENESS OF THE EXPENDITURE WAS ON THE ASSESSEE. THE ASSESSEE COULD NOT RUN AWAY FROM ITS OBLIGATION OF FURNISHING OF THE REQUISITE PARTICULARS AND CHALLEN GE THE AOS ORDER BY STATING THAT NO ADHOC DISALLOWANCE WAS WARRANTED. ALTHOUGH I FIND T HAT THE AO RESTORED THE ADHOC DISALLOWANCE WITHOUT REJECTING BOOKS YET I ALSO FIN D THAT THE EFFORTS OF THE AR WERE WANTING EVEN AT THE APPELLATE STAGE BECAUSE NO EFFORT WAS MADE TO ESTABLISH AS TO WHAT EXPENSES WERE INCURRED ON REPAIRS AND UPKEEP. IN FACT, I FIN D THAT NO EXPLANATION WHATSOEVER HAS BEEN PROVIDED WITH REGARD TO HIS DISALLOWANCE. HAVI NG REGARD TO THESE FACTS THEREFORE I AM CONSTRAINED TO UPHOLD THE DISALLOWANCE OF RS.14 LAC S OUT OF REPAIRS AND MAINTENANCE EXPENSES. THIS GROUND STANDS DISMISSED. 7. AGGRIEVED BY SUCH ORDER OF THE CIT-A, THE ASSESSEE IS IN APPEAL BEFORE US AND IN SUPPORT OF THE CONTENTION FILED PAPER BOOK CONTAINING PAGES 1-36. THE LD.AR OF THE ASSESSEE HA S REITERATED HIS SUBMISSIONS AS MADE BEFORE THE CIT-A. HE ALSO SUBMI TS THAT THE ASSESSEE PRODUCED VOLUMINOUS RECORDS IN SUPPORT OF THE CLAIM BEFORE THE CIT. ON PERUSAL OF THE SAME, THE CIT-A DELETED THE SOME OF THE DISALLOWANCES ON OTHER ITEMS. HE FURTHER SUBMITS TH AT IN RESPECT OF IMPUGNED DISALLOWANCE THE ASSESSEE PRODUCED THE DOC UMENTS IN SUPPORT OF THE EXPENDITURE INCURRED BY THE ASSESSEE BEFORE THE AO, BUT HE CHOOSE TO EXAMINE ONLY SOME DOCUMENTS AND EV IDENCES AND DISALLOWED THE SAME AT APPROXIMATELY 50% EACH ARBIT RARILY UNDER BOTH THE HEADS AS CLAIMED BY THE ASSESSEE. THE LD.A R ARGUED THAT NEITHER BEFORE THE AO NOR THE CIT-A HAD ANY MATERIA L ON RECORD TO REJECT AND DISALLOW THE SAME AT 50% EACH HEAD OF TH E CLAIM. BOTH THE AUTHORITIES HAVE FAILED TO GIVE ANY REASON ON SUCH DISALLOWANCE. IN SUPPORT OF THE CONTENTION, THE LD. AR REFERRED TO PAGES 18-36 OF THE PAPER BOOK AND ARGUED THAT ALL THE ITEMS AS APPEARI NG IN THE LEDGER ACCOUNTS ARE SUPPORTED BY VOUCHER AND EVIDENCES OF PAYMENTS AND TAXES THEREON DEDUCTED AT SOURCE FROM THE PAYEES. H E ALSO ARGUED THAT THE ASSESSEE CLAIMED TOTAL EXPENDITURE TOWARDS REPAIRS AND MAINTENANCE OF RS.31.38 LAKSH, WHICH WORKS OUT TO 2.15% ONLY OF ITA NO. 1310/KOL/2015 C. MARE (I) P.LTD 4 THE TOTAL COST PRICE OF THE CORRESPONDING ASSETS AN D REFERRED TO PAGE 36 OF THE PAPER BOOK. THE LD.AR OF THE ASSESSEE HAS RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF COMMISSIONER OF INCOME TAX VS THE LAKSHMI VILAS BAN K LTD DT.16.04.2014, TAX CASE (APPEAL) NO.896 OF 2013. 8. ON THE OTHER HAND, THE LD.DR SUBMITS THAT THE AS SESSEE DID NOT BRING ON RECORD ANY EVIDENCE IN SUPPORT OF ITS CLAIM BEFORE THE AO. THEREFORE, HE MADE SUCH DISALLOWANCE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE ONUS IS ONLY ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE EXPENDITURE. THE LD. DR FURTHER ARGUED THAT THE EVIDENCES AS FILED IN PAGES 18-35 OF THE P APER BOOK WERE NEITHER BEFORE THE AO NOR BEFORE THE CIT-A SHOWING THE GENUINENESS OF THE SAID EXPENDITURE/TRANSACTION, WHICH IS FULLY DOUBTFUL FOR NON- SUBMISSION OF ANY EVIDENCE. THEREFORE, THE AO HAS R IGHTLY DISALLOWED THE SAME IN THE FACTS AND CIRCUMSTANCES OF THE CASE . HE RELIED ON THE ORDERS OF THE AO & CIT-A. 9. IN REPLY, THE AR SUBMITS THAT THE ORDER OF THE CIT-A IS CRYPTIC AND HE FAILED TO ASSIGN ANY REASON TO CONFIRM THE S AID DISALLOWANCE MADE BY THE AO. HE ARGUED THAT THE ARGUMENTS AS AD VANCED BY THE LD.DR ARE INCORRECT IN RESPECT OF NON-SUBMISSION OF ANY EVIDENCE BEFORE THE LOWER AUTHORITIES. THE AO/CIT-A FAILED T O CONSIDER THE SUBMISSIONS AS MADE BY THE ASSESSEE BEFORE THEM. 10. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD INCLUDING THE CASE LAWS AND THE DETAILS AS A VAILABLE IN THE PAPER BOOK FILED BY THE ASSESSEE BEFORE US. HOWEVER , WE FIND THAT EVIDENCE OR EXPLANATION WERE NOT BEFORE THE AUTHORI TIES BELOW. ON PERUSAL OF PAGES 18-35 OF THE PAPER BOOK, WE FIND T HAT THESE DETAILS WERE NOT AVAILABLE BEFORE THE AO FOR HIS CONSIDERAT ION. THEREFORE, TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANC ES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT FIT AND PROP ER TO REMAND THE ITA NO. 1310/KOL/2015 C. MARE (I) P.LTD 5 MATTER TO THE FILE OF THE AO FOR HIS FRESH CONSIDER ATION. HE SHALL PASS A FRESH ORDER AS PER LAW, IN VIEW OF EVIDENCES FILED BEFORE HIM. THE ASSESSEE SHALL BE AT LIBERTY TO FILE THE EVIDENCES , IF ANY, TO SUBSTANTIATE ITS CLAIM. THEREFORE, THE GROUNDS RAIS ED BY THE ASSESSEE IN THIS REGARD ARE ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, THE APPEAL (ITA NO. 1310/KOL/20 15 FOR THE A.Y 2008-09) OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 1 2-01-2018 SD/- SD/- M. BALAGANESH S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12-01-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE : M/S. C. MARC (INDIA) PVT. LTD IPHMR CAMPUS, 318/B, PRANTIK PALLY, KOLKATA-107. 2 RESPONDENT/REVENUE : THE DCIT, CIR 6(2), AAYKAR BHA WAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-69. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER SR.P.S, HEAD OF OFFICE ITAT KOLKATA