ASST CIT (LTU) 1, MUMBAI V. SONATA INFORMATION TECHNOLOGY LTD, MUMBAI

ITA 1360/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5700 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJIT J SRIVASTAV
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1360/MUM/2017 ASSESSMENT YEAR: 2012 - 13 ACIT (LTU) - 1, WORLD TRADE CENTRE, CENTRE 1, 29 TH FLOOR, CUFFE PARADE, MUMBAI - 4000 2 5. VS. M/S SONATA INFORMATION TECHNOLOGY LTD., 208, T.V. INDUSTRIAL ESTATE, S.K. AHIRE MARG WORLI, MUMBAI - 400025. PAN NO. AAECS8734J APPELLANT RESPONDENT REVENUE BY : MR.AJIT J. SRIVASTAV, CIT - DR ASSESSEE BY : MR. ANUJ KISNADWALA, AR DATE OF HEARING : 04/07/2018 DATE OF PRONOUNCEMENT : 11/07/2018 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE R EVENUE. THE RELEVANT ASSESSMENT YEAR IS 2012 - 13. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 [IN SHORT CIT(A) ], MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT ). M/S SONATA INFORMATION ITA NO. 1360/MUM/2017 2 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FA CT S AND IN TH E CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN ALLOWING SERVICE CHARGES OF RS.15,51,25,076 / - INCURRED FOR THE SERVICES RENDERED BY ITS HOLDING COMPANY SONATA SOFTWARE LTD. ( SSL ) . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CI T (A) ERRED IN ALLOWING DEPUTATION CHARGES OF RS. 17,74,60,170/ - IN RESPECT OF PERSONNEL DEPUTED BY ITS HOLDING COMPANY SSL . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID . CI T(A) ERRED IN ALLOWING REIMBURSEMENT OF VARIOUS EXPENSES OF RS.1,1 1,64,60 5/ - TO SSL , IT S HOLDING COMPANY WHICH WAS DISALLOWED U/S 37(1) OF T HE IT. ACT. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN SOFTWARE. IN A NUTSHELL, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER MADE AN ADDITION OF (I) RS.15,51,25,076/ - BEING SERVICE CHARGES INCURRED FOR THE SERVICES RENDERED BY ITS HOLDING COMPANY SS L , (II) RS.17,74,60,170/ - OF DEPUTATION CHARGES TO SSL AND (III) RS.1,11,64,605/ - TOWARDS REIMBURSEMENT OF VARIOUS EXPENSES TO SSL. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) HAS F OLLOWED THE ORDER OF THE TRIBUNAL FOR THE AY 2009 - 10 AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. 5. BEFORE US, THE LD. DR RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE SUPPORTED THE ORDER PASSED BY THE LD. CIT(A) AND A LSO RELIED ON THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2009 - 10(ITA NO. 1424/M/2013), AY 2010 - 11 (ITA NO. 1305/MUM/2014) AND AY 2011 - 12 (ITA NO. 4334/MUM/2015). M/S SONATA INFORMATION ITA NO. 1360/MUM/2017 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. WE FIND THAT THE GROUNDS OF APPEAL FOR THE IMPUGNED ASSESSMENT YEAR ARE SIMILAR TO THE GROUNDS OF APPEAL FILED BEFORE THE TRIBUNAL FOR AY S 2009 - 10, 2010 - 11 AND 2011 - 12. IN THE ABOVE THREE ASSESSMENT YEARS, THE APPEAL FILED BY THE REVENUE WERE DISMISSED BY THE TRIBUNAL. 7. FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE ORDERS OF THE CO - ORDINATE BENCH. 8. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/07/2018 . SD/ - SD/ - ( JOGINDER SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 11/07/2018 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI