SAURASHTRA ROADWAYS BANGALORE, MUMBAI V. ITO-25(1)(2), NATIONAL EASSEMENT CENTRE, MUMBAI

ITA 1801/MUM/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5724 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 07-07-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 09-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B. LAXMI KANTH
• Assessee Lawyers: MOHAMMED ANAS A. SIDDIQUE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “G” BENCH : MUMBAI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA.No.1801/Mum./2024 Assessment Year 2018-2019 Saurashtra Roadways, 501A, 5 th Floor, Savla Chambers, 40, Cawasji Patel Street, Fort, Mumbai–400001. Maharashtra. PAN AABFS2467G vs. The Income Tax Officer, Ward-25(1)(2), Room No.117, Kautilya Bhavan, BKC, Mumbai. Maharashtra. (Appellant) (Respondent) For Assessee : Shri Mohammed Anas A. Siddique For Revenue : Shri B. Laxmi Kanth, Sr. AR Date of Hearing : 08.07.2024 Date of Pronouncement : 22.07.2024 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s appeal, for assessment year 2018-2019, arises against National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2023- 24/1063721705(1), dated 30.03.2024, in proceedings u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”). 2 ITA.No.1801/MUM./2024 Heard both the parties. Case file perused. 2. The assessee’s sole substantive grievance canvassed in the instant appeal challenging correctness of both the learned lower authorities action invoking sec.37(2B) disallowance of Rs.7,35,300/-; in the course of assessment dated 26.03.2021 as upheld in the lower appellate discussion reading as under : tract, pamphlet or the like published by a political party". “6.0 ANALYSIS OF THE FACTS AND ADJUDICATION OF THE GROUNDS: 6.1 The assessee has raised two grounds of appeal. These grounds are taken up for discussion and adjudication in the subsequent paragraphs of this order. I have carefully considered the issues under dispute and examined the same in the light of the facts and circumstances of the case as emanating from the impugned assessment order u/s. 143(3) rws 143(3A) and 143(3B) of the Act and relevant provisions of the statute. 3 ITA.No.1801/MUM./2024 6.2 Ground No. 1 and Ground No. 2 are raised against the AO's action in disallowing an amount of Rs. 7,35,300/- u/s 37(2B) of the Act, as being in the nature of advertisement expenditure in any souvenir, brochure, tract, pamphlet or the like published by a political party. 6.3 The facts of the case are that the audit report in Form 3CD categorically included the calendar expenses of Rs.7,35,300/- in item no 21(a) under the heading "advertisement expenditure in any souvenir, brochure, tract, pamphlet or the like published by a political party". Such expenditure is liable to be added u/s 37(28). The said sub-section is extracted as under : (2B) Notwithstanding anything contained in sub-section (1), no allowance shall be made in respect of expenditure incurred by an assessee on advertisement in any souvenir, brochure, tract, pamphlet or the like published by a political party. 6.4 In accordance with the above section, Assessing Officer made disallowance of advertisement expenses 4 ITA.No.1801/MUM./2024 toward calendar charges as they are stated to be published in a publication of a political party, in the Audit Report. However, assessee's claim is that the said item was erroneously reported in item no 21(a), whereas the calendar expenses are not in a publication by a political party. Assessee submitted an invoice raised on Parasakthi Picture Mart dt. 29.11.2017 before the assessing officer. The assessee contended that the bill invoice should be considered in support of its claim. 6.5. However, the invoice mentions the item as '17x27 size 12 sheetercalenders'. No further details are given. With these details it is not possible to ascertain whether the calenders are carrying political content or not. A calendar carrying the name and/or logo of a political party, with a political message of the said party are common and such calendars purport to be a form of advertisement published by a political party. Without such instance, the specific mention in Audit Report will not arise. It is important to point out that this is not a 5 ITA.No.1801/MUM./2024 typographic mistake of an error in a date or a numeral or a spelling, but this is an item which has been specifically mentioned under a clause that results in disallowance. Therefore, assessee's reliance of an invoice/bill and a claim that this is an error in Audit Report does not have conclusive substance. Further, there is no revised Audit Report filed by the Auditor in the electronic portal. Unless there is a revised Audit Report, the item cannot be brushed away as an inadvertent error since the invoice is not a sufficient piece of evidence for conclusive determination. Accordingly, Ground no 1 and 2 are dismissed. 7.0 In the result, the appeal filed against the order u/s. 143(3) rws 143(3A) and 143(3B) of the Act for the AY 2018-19 is dismissed.” 3. Suffice to say, the solitary substantive issue between the parties is regarding the assessee’s claim of having incurred calendar expenditure of Rs.7,35,300/-. The Revenue’s contentions in light of both the learned lower authorities respective findings is that the same deserves to be disallowed u/sec.37(2B) of the Act. Learned DR 6 ITA.No.1801/MUM./2024 also reiterated the very stand before us. We note in this factual backdrop that the assessee has very well filed copy of the said calendar in the case records. The same is found to be not carrying any element of “advertisement in any foreign currency brochure, tract, pamphlet or the like published by political party”. No such political party component is sustainable from the assessee’s calendar; whatsoever. Faced with this situation, we are of the considered view that it was incumbent for the learned lower authorities to have first identify the same before invoking the impugned disallowance. We thus accept the assessee’s instant sole substantive grievance in very terms. Ordered accordingly. 4. This assessee’s appeal is allowed in above terms. Order pronounced in the open Court on 22.07.2024 \\ Sd/- Sd/- [AMARJIT SINGH] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Mumba, Dated 22 nd July, 2024 VBP/- 7 ITA.No.1801/MUM./2024 Copy to 1. The applicant 2. The respondent 3. The Pr. CIT, Mumbai concerned 4. D.R. ITAT, “G” Bench, Pune. 5. Guard File. //By Order// //True Copy // Asst. Registrar, ITAT, Mumbai Benches, Mumbai.