DCIT, New Delhi V. M/s. Axis Risk Consulting Services Pvt. Ltd., Gurgaon

ITA 2063/DEL/2014

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7734 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES SINGSAM
• Keywords: Corroborative evidences

Judgement Text

DCIT VS. AXIS RISK CONSULTING SERVICES PVT. LTD./ I .T.A.NO.2063/DEL/2014/A.Y.2008-09 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER . . /. I.T.A NO.2063/DEL/2014 / ASSESSMENT YEAR:2008-09 D CIT CIRCLE-2(1) NEW DELHI. VS. AXIS RISK CONSULTING SERVICES PVT. LTD. GENPACT TOWER, DLF CITY, PHASE-V, SECTOR-53, GURGAON. PAN NO. AAECA9833G APPELLANT / RESPONDENT /REVENUE BY SHRI JAMES SINGSAM, SR. DR /ASSESSEE BY SHRI TARANDEEP SINGH, ADV. / DATE OF HEARING: 28 .0 1.20 20 /PRONOUNCEMENT ON 2 9 .0 1.20 20 /O R D E R PER BHAVNESH SAINI, J.M. 1. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST TH E ORDER OF LD. CIT(APPEALS)-V, NEW DELHI DATED 15.01.2014 FOR ASSE SSMENT YEAR 2008-09. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTI ES AND PERUSED THE MATERIAL ON RECORD. 3. ON GROUND NO. 1 REVENUE CHALLENGED THE DELETION OF ADDITION ON ACCOUNT OF VEHICLE EXPENSES AMOUNTING TO RS. 30,32, 620/-. THE ASSESSEE FILED BREAKUP OF THE VEHICLE EXPENSES BEFORE AO. T HE AO ASKED THE ASSESSEE TO FURNISH SUPPORTING BILLS AND VOUCHERS. THE ASSESSEE FILED THE DCIT VS. AXIS RISK CONSULTING SERVICES PVT. LTD./ I .T.A.NO.2063/DEL/2014/A.Y.2008-09 PAGE 2 OF 6 SUBMISSION BEFORE AO EXPLAINED THAT SAME EXPENSES A RE INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES. THE AO IN A BSENCE OF SUPPORTING EVIDENCES MADE THE DISALLOWANCE OF THE EXPENSES. T HE ASSESSEE SUBMITTED THAT COMPLETE DETAILS WERE SUBMITTED BEFORE THE AO AND NO ADVERSE INFERENCE HAS BEEN DRAWN IN PRECEDING ASSESSMENT YE AR AS WELL. THE LD. CIT(A) FOUND THAT SIMILAR EXPENSES WERE MADE IN PRE CEDING FINANCIAL YEAR IN WHICH NO ADVERSE INFERENCE HAS BEEN DRAWN AND TH AT ENTIRE EXPENSES HAVE BEEN DISALLOWED WITHOUT ANY REASONS. THE ASSE SSEE ENCLOSED SAMPLE COPIES OF THE VEHICLE EXPENSES INVOICES. THEREFORE , SUCH ADDITION IS WHOLLY UNJUSTIFIED. LD. CIT(A), ACCORDINGLY, DELETED THE ADDITION. 4. ON GROUND NO. 2 REVENUE CHALLENGED THE DELETION OF ADDITION OF RS. 19,76,615/- ON ACCOUNT OF MISMATCH OF AIR INFORMATI ON. THE AO AT THE ASSESSMENT PROCEEDINGS REQUESTED THE ASSESSEE TO PR OVIDE RECONCILIATION OF AIR STATEMENT PROVIDED BY THE AO WITH BOOKS OF ACCO UNT. THE AO ADDED THE AMOUNT ON ACCOUNT OF ALLEGED TRANSACTION WITH M /S CONTILOE FILMS PVT. LTD. AND M/S UNITECH PERFECT PVT. LTD. AS REFLECTED IN THE AIR STATEMENT ON THE GROUND THAT SAID TRANSACTION DOES NOT MATCH WITH THE ASSESSEES RECORD. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) T HAT AO MADE THIS ADDITION WITHOUT MAKING ANY ENQUIRY. IT WAS SUBMIT TED THAT TOTAL AMOUNT OF INCOME FROM CONSULTANCY CREDITED TO PROFIT AND L OSS ACCOUNT AND, ACCORDINGLY, OFFERED FOR TAX IN ASSESSMENT YEAR UND ER APPEAL, WHICH WAS RS. 120,323,375/-. TOTAL AMOUNT OF LEGAL AND PROFE SSIONAL FEES APPEARING IN AIR STATEMENT/ITS FORM WAS RS. 75,507,106/- ONLY AND AS SUCH MUCH DCIT VS. AXIS RISK CONSULTING SERVICES PVT. LTD./ I .T.A.NO.2063/DEL/2014/A.Y.2008-09 PAGE 3 OF 6 MORE INCOME WAS OFFERED FOR TAX WHICH APPEARED IN I TS FORM. THE ASSESSEE HAS RECONCILED ALL THE TRANSACTIONS. ASSE SSEE SUBMITTED THAT IT HAS NOT RECEIVED ANY INCOME FROM THESE TWO PARTIES IN ASSESSMENT YEAR UNDER APPEAL AND AO MADE THE ADDITION WITHOUT VERIF YING THE FACTS. 5. LD. CIT(A) CONSIDERING THE EXPLANATION OF THE ASSES SEE NOTED THAT ASSESSEE CANNOT BE FORCED TO PROVE NEGATIVE. THE A SSESSEE EXPLAINED THAT IT HAS NOT RENDERED ANY SERVICES FOR THESE TWO PART IES AND DID NOT RECEIVE ANY INCOME AND THESE FIGURES APPEARED WRONGLY IN AI R INFORMATION. THEREFORE, IT WAS THE DUTY OF THE AO TO VERIFY THE FACTS FROM THESE PARTIES. IN ABSENCE OF ANY ENQUIRY LD. CIT(A) DELETED THE AD DITION. LD. CIT(A) ALSO NOTED THAT THIS VIEW IS FURTHER FORTIFIED FROM THE FACT THAT TOTAL LEGAL AND PROFESSIONAL FEES APPEARING IN AIR STATEMENT WAS ON LY FOR RS. 7.55 CRORES WHILE ASSESSEE HAD IN HIS RETURN OF INCOME HAD SHOW N TOTAL LEGAL AND PROFESSIONAL FEES FOR RS. 12.03 CRORES. THEREFORE, AIR INFORMATION CANNOT BE TAKEN ON ITS FACE VALUE AND CANNOT BE TREATED AS SACROSANCT WITHOUT FURTHER ENQUIRY. LD. CIT(A), ACCORDINGLY, DELETED THE ADDITION AND ALLOWED THE APPEAL. 6. ON GROUND NO. 3 REVENUE CHALLENGED THE DELETION OF ADDITION OF RS. 77,37,027/- ON ACCOUNT OF COMMUNICATION EXPENSES. THE ASSESSEE FILED COPIES OF THE SAMPLE INVOICES BEFORE AO. THE AO IN ABSENCE OF SUPPORTING BILLS AND VOUCHERS MADE THE ADDITION. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) ALL DETAILS OF EXPENSES WERE SUBMITTED WHICH WAS SUPPORTED BY BILLS AND VOUCHERS AND THAT SOME ARE INCURRED WHOLLY AND EXCLUSIVELY FOR DCIT VS. AXIS RISK CONSULTING SERVICES PVT. LTD./ I .T.A.NO.2063/DEL/2014/A.Y.2008-09 PAGE 4 OF 6 BUSINESS PURPOSE. FURTHER, THE ASSESSEE SUBMITTED THAT OUT OF THE ABOVE SUM, AN AMOUNT OF RS. 44,06,760/- PAYABLE TO RSM AD VISORY PVT. LTD. HAS BEEN REVERSED IN F.Y. 2008-09 THE SAME WAS CREDITED TO PROFIT AND LOSS ACCOUNT AND OFFERED FOR TAX IN AY 2009-10 IN THE RE TURN OF INCOME. THEREFORE, THIS AMOUNT WOULD BE DOUBLE ADDITION. A SSESSEE SUBMITTED THAT COMPLETE DETAILS WERE SUBMITTED, THEREFORE, TH IS ADDITION IS WHOLLY UNJUSTIFIED. THE LD. CIT(A) ACCEPTED THE CONTENTIO N OF THE ASSESSEE AND FOUND THAT COMMUNICATION EXPENSES ARE SUPPORTED BY COMPLETE DETAILS AND ACCOUNTS OF ASSESSEE ARE AUDITED, THEREFORE, THIS A DDITION WAS DELETED. 7. ON GROUND NO. 4 REVENUE CHALLENGED THE DELETION OF ADDITION OF REIMBURSEMENT EXPENSES AMOUNTING TO RS. 46,31,882/- . THE AO IN ABSENCE OF SUPPORTING DOCUMENTS MADE THE DISALLOWAN CE OUT OF THESE EXPENSES. ASSESSEE SUBMITTED BEFORE LD. CIT(A) THA T COMPLETE DETAILS AND BILLS BEFORE THE AO, THEREFORE, THERE IS NO PURPOSE IN MAKING THE ADDITION. LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION. 8. LD. DR SUBMITTED THAT ALL THESE ADDITIONS HAVE BEEN DELETED BY LD. CIT(A) WITHOUT CONSIDERING THE FINDINGS OF THE AO T HAT ASSESSEE DID NOT PRODUCE BILLS AND VOUCHERS BEFORE AO. HE HAS FURTH ER SUBMITTED THAT THERE WAS MISMATCH IN AIR INFORMATION AND NO OPPORTUNITY WAS GIVEN TO THE AO TO FILE REMAND REPORT ON AIR MISMATCH ADDITION. TH EREFORE, ORDER OF THE LD. CIT(A) MAY BE REVERSED. DCIT VS. AXIS RISK CONSULTING SERVICES PVT. LTD./ I .T.A.NO.2063/DEL/2014/A.Y.2008-09 PAGE 5 OF 6 9. ON THE OTHER HAND, LD. COUNSEL FOR ASSESSEE REITERA TED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMI TTED THAT VEHICLE EXPENSES AND COMMUNICATION EXPENSES HAVE BEEN TOTAL LY DISALLOWED AND ENTIRE AMOUNT IS TAKEN FROM THE PROFIT AND LOSS ACC OUNT. HE HAS SUBMITTED THAT IN EARLIER YEAR AND SUBSEQUENT YEAR NO ADDITIO N OF THE SIMILAR NATURE HAVE BEEN MADE BY THE AO. THE ASSESSEE PRODUCE COM PLETE DETAILS BEFORE AO AND ACCOUNTS ARE AUDITED. THE AO HAS NOT POINTE D OUT AS TO FOR WHICH AMOUNT, NO BILLS AND VOUCHERS HAVE BEEN PRODUCED. THEREFORE, THE ADDITIONS HAVE BEEN CORRECTLY DELETED BY LD. CIT(A) . 10. WE HAVE CONSIDERED THE RIVAL SUBMISSION. THE AO IN THE ASSESSMENT ORDER HAS NOTED THAT ASSESSEE HAS FILED NECESSARY D ETAILS AS REQUISITIONED FROM TIME TO TIME, WHICH HAVE BEEN VERIFIED BY HIM. THE AO HAS NOT POINTED OUT AS TO WHICH OF THE BILLS AND VOUCHERS H AVE NOT BEEN PRODUCED BY THE ASSESSEE. THE AO DISALLOWED THE ENTIRE VEHI CLE EXPENSES AND COMMUNICATION EXPENSES AS CLAIMED IN THE PROFIT AND LOSS ACCOUNT WITHOUT POINTING OUT AS TO WHICH BILLS HAVE NOT BEEN PRODUC ED OR VERIFIED BY HIM. THE LD. COUNSEL FOR ASSESSEE SUBMITTED BEFORE LD. C IT(A) COMPLETE DETAILS AND BILLS HAVE BEEN PRODUCED WHICH HAVE BEEN VERIFI ED BY LD. CIT(A) AND THAT ASSESSEE DENIED THE MISMATCH IN AIR INFORMATIO N WITH THE BOOKS OF ACCOUNT BECAUSE THE ASSESSEE DID NOT RECEIVE ANY AM OUNT FROM THE CONCERNED TWO PARTIES. THE AO DID NOT VERIFY ANY F ACT FROM THESE PARTIES AND MERELY RELYING UPON AIR INFORMATION MADE THE AD DITION. THUS, THE LD. CIT(A) CORRECTLY OBSERVED THAT ASSESSEE CANNOT BE P UT TO NEGATIVE ONUS. DCIT VS. AXIS RISK CONSULTING SERVICES PVT. LTD./ I .T.A.NO.2063/DEL/2014/A.Y.2008-09 PAGE 6 OF 6 CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS, ACC ORDINGLY, DISMISSED. 11. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 TH JANUARY, 2020 * KAVITA ARORA, SR. P.S. COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, ITAT: DELHI BENCHES-DELHI