R.Chandrasekar, CHENNAI V. ITO, CHENNAI

ITA 1888/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86258 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: B RAMAKRISHNAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI .. , ! , ' #$ BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ ITA NO. 1888/MDS/2014 ' % &% / ASSESSMENT YEAR : 2007-08 SHRI R. CHANDRASEKAR, NEW NO.19(8), BRINDAVAN EXTN., 1 ST CROSS STREET, WEST MAMBALAM, CHENNAI - 600 033. PAN : AANPC 6907 F V. THE INCOME TAX OFFICER, BUSINESS WARD III(2), CHENNAI - 600 034. (!(/ APPELLANT) (*+!(/ RESPONDENT) !( , - / APPELLANT BY : SHRI B. RAMAKRISHNAN, FCA *+!( , - / RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT . , / / DATE OF HEARING : 02.02.2015 01& , / / DATE OF PRONOUNCEMENT : 02.02.2015 / O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 24.3.2014 PASSED BY LD CIT(APPEALS)-V, CHENNAI CONFIRMING THE ADDITION OF ` 14,40,130/- MADE BY THE ASSESSING OFFICER FOR AY 2007-08. 2 I.T.A. NO. 1888/MDS/2014 2 WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS FRANCHISEE OF RELIANCE RETAIL LIMITED. THE ASSE SSEE DECLARED GROSS COMMISSION INCOME OF ` 7,78,825/-. THE ASSESSING OFFICER NOTICED FROM THE TDS CERTIFICATES THAT THE RELIANCE RETAIL LIMITED HAS DEDUCTED TAX AT SOURCE ON AN AMOUNT OF ` 22,18,955/- THOUGH THE ASSESSEE EXPLAINED THAT THE DIFFERENCE REPRESEN TS REIMBURSEMENT OF EXPENSES, YET THE SAME DID NOT F IND FAVOUR WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS FAILED TO DISCLOSE THE DIFFERENCE AMOU NT OF ` 14,40,130/- AS HIS INCOME IN THE PROFIT AND LOSS AC COUNT AND ACCORDINGLY ASSESSED THE SAME. THE LD CIT(APPEALS) ALSO CONFIRMED THE SAID ADDITION. 3. BEFORE US, THE LD A.R SUBMITTED THAT THE AS SESSEE HAS ACCOUNTED FOR ALL THE EXPENSES IN THE BOOKS OF ACCO UNT AND HAS SHOWN THE SAME AS BALANCE SHEET ITEM. ACCORDINGLY HE SUBMITTED THAT THE ASSESSING OFFICER WAS NOT RIGHT IN INSISTI NG THAT THE SAME SHOULD HAVE BEEN ROUTED THROUGH THE PROFIT AND LOSS ACCOUNT. HE SUBMITTED THAT THE ASSESSING OFFICER, IN THE ALTERN ATIVE, SHOULD HAVE ALLOWED CORRESPONDING EXPENSES AS DEDUCTION, IF THE GROSS RECEIPTS WAS TAKEN AT ` 22.18 LAKHS. ACCORDINGLY, HE PRAYED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICE R FOR CONSIDERING THE ISSUE AFRESH. 3 I.T.A. NO. 1888/MDS/2014 4. ON THE CONTRARY, THE LD D.R PLACED STRONG REL IANCE ON THE ORDER PASSED BY LD CIT(APPEALS). 5. HAVING HEARD THE RIVAL CONTENTIONS, WE ARE O F THE VIEW THAT THERE IS MERIT IN THE SUBMISSIONS MADE BY LD A.R. IF THE RECEIPTS COVERED BY THE TDS CERTIFICATES ARE TAKEN AS THE GR OSS INCOME OF THE ASSESSEE, THEN THE CORRESPONDING EXPENDITURE IS REQUIRED TO BE ALLOWED AS DEDUCTION, OF COURSE, SUBJECT TO VERIFIC ATION. BESIDES THE ABOVE, IT IS THE CONTENTION OF THE ASSESSEE THAT HE HAS TAKEN THE REIMBURSEMENTS AS A BALANCE SHEET ITEM. WE HAVE NOTICED THAT THE ASSESSING OFFICER HAS REJECTED THE CLAIM OF THE ASSESSEE ONLY ON THE REASONING THAT THE REIMBURSEMENTS WERE NOT R OUTED THROUGH THE PROFIT AND LOSS ACCOUNT, BUT FAILED TO ALLOW DE DUCTION OF CORRESPONDING EXPENDITURE. UNDER THESE SET OF FACT S, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE O RDER OF LD CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER T O THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE SAME AFRESH IN THE LIGHT OF DISCUSSIONS MADE SUPRA. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 4 I.T.A. NO. 1888/MDS/2014 ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSI ON OF HEARING ON THE 2 ND DAY OF FEBRUARY, 2015 AT CHENNAI. SD/- SD/- ( ! ) ( .. ) (VIKAS AWASTHY) (B.R. BASKARAN) ' /JUDICIAL MEMBER /ACCOUNTANT MEMBER /CHENNAI, A /DATED, THE 2 ND FEBRUARY, 2015. KRI. B , *'/C D &/ /COPY TO: 1. !( /APPELLANT 2. *+!( /RESPONDENT 3. . E/ () /CIT(A)-V, CHENNAI 4. . E/ /CIT-X, CHENNAI-34 5. FG *'/' /DR 6. GH% I /GF.