DCIT, Pondicherry V. SPI Technologies India P. Ltd., Pondicherry

ITA 1815/CHNY/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4973 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 16-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Keywords: Bad and doubtful debts
• Section: 143(3); 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ! ' . #$ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NOS.1815/MDS/2016 & 1079/MDS/2017 ( / ASSESSMENT YEAR: 2011-12) THE DEPUTY COMMISSIONER OF INCOME TAX, PONDICHERRY CIRCLE NO.378-386, PONDICHERRY. VS M/S. SPI TECHNOLOGIES INDIA P. LTD., GOTHI INDUSTRIAL ESTATE, R.S.NO.4/5 & 4/6, KURUMBAPET, PONDICHERRY 605 009. PAN: AABCK3967C ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SMT. S. VIJAYAPRABHA, JCIT /RESPONDENT BY : NONE /DATE OF HEARING : 05.12.2017 !' /DATE OF PRONOUNCEMENT : 18.01.2018 / O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER: THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-PUDUCHERRY, DATED 14.03.2016 IN ITA NOS.1 7 & 75/CIT(A)-PDY/2014-15 FOR THE ASSESSMENT YEAR 2011- 12 PASSED U/S.250(6) R.W.S. 143(3) & 271(1)(C) OF THE ACT. 2 ITA NOS. 1815/MDS/2016 & 1079/MDS/2017 2. THE REVENUE HAS RAISED SEVERAL IDENTICAL GROUNDS IN BOTH THE APPEALS HOWEVER THE CRUX OF THE ISSUE IS THAT B ASED ON THE FRESH EVIDENCE PRODUCED BEFORE THE LD.CIT(A), THE L D.CIT(A) HAD ALLOWED THE CLAIM OF EXPENDITURE TOWARDS MANAGEMENT FEE OF RS.3,05,08,036/- AS DEDUCTION WHICH WAS EARLIER DIS ALLOWED BY THE LD.AO AND CONSEQUENTLY DELETED THE LEVY OF PENALTY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF PROCESSING DATA, INFORMATION TECHNOLOGY AND COMMUNICATIONS ENA BLED SERVICES AND OTHER RELATED SERVICES, FILED ITS RETU RN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 13.09.2011 ADMITTING TOTAL INCOME OF RS.97,47,560/-. THE CASE WAS SELECTED FO R SCRUTINY UNDER CASS AND FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 07.03.2014, WHEREIN THE LD.AO DISALLO WED EXPENDITURE OF RS.3,05,08,036/- TOWARDS MANAGEMENT FEES AND RS.8,77,781/- TOWARDS PROVISION ON BAD DEBTS. SUBSE QUENTLY THE LD.AO LEVIED PENALTY U/S.271(1)(C) OF THE ACT. ON A PPEAL, THE LD.CIT(A) RELYING ON THE FRESH EVIDENCE PRODUCED BE FORE HIM 3 ITA NOS. 1815/MDS/2016 & 1079/MDS/2017 DELETED BOTH THE ADDITIONS MADE BY THE LD.AO AND CO NSEQUENTLY DELETED THE LEVY OF PENALTY U/S.271(1)(C) OF THE AC T. 4. AT THE TIME OF HEARING THE ASSESSEE FAILED TO BE PRESENT BEFORE THE BENCH AND ADJOURNMENT PETITION WAS FILED . THE LD.DR AT THE OUTSET SUBMITTED BEFORE US THAT THE LD.CIT(A ) HAD REVERSED THE ORDER OF THE LD.AO BY DELETING THE ADDITIONS MA DE BY DISALLOWING THE MANAGEMENT FEES PAID OF RS.3,05,08, 036/- AND PROVISION FOR BAD DEBTS OF RS.8,77,781/- BASED ON F RESH EVIDENCE PRODUCED BEFORE THE LD.CIT(A) WHICH WAS NOT PLACED BEFORE THE LD.AO FOR VERIFICATION. SHE FURTHER SUBMITTED THAT THE LD.CIT(A) HAD FAILED TO OBTAIN REMAND REPORT FROM THE LD.AO B EFORE ARRIVING AT HIS DECISION. IT WAS THEREFORE PLEADED THAT BOTH THE APPEALS MAY BE REMITTED BACK TO THE FILE OF LD.AO FOR DE-NO VA CONSIDERATION. 5. AFTER HEARING THE LD. DR, WE FIND MERIT IN THE S UBMISSIONS OF THE LD.DR. FROM THE FACTS OF THE CASE IT IS APPA RENT THAT THE LD.CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY REL YING ON THE FRESH EVIDENCE PRODUCED BEFORE HIM WHICH IS GROSS V IOLATION OF 4 ITA NOS. 1815/MDS/2016 & 1079/MDS/2017 RULE 46A OF THE RULES. THEREFORE WE HEREBY REMIT BO TH THE APPEALS BACK TO THE FILE OF LD.AO FOR DE-NOVA CONSI DERATION. THE ADJOURNMENT PETITION FILED BY THE LD.AR STANDS REJE CTED. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18 TH JANUARY, 2018 AT CHENNAI. SD/- SD/- ( ! ' . #$ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # $% /JUDICIAL MEMBER $% / ACCOUNTANT MEMBER &# /CHENNAI, '$ /DATED 18 TH JANUARY, 2018 RSR $ )* +* /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. . ( )/CIT(A) 4. . /CIT 5. */0 1 /DR 6. 0 /GF