DCIT, CHENNAI V. M/s. Roverco Apparel Co. Pvt. Ltd., CHENNAI

ITA 2258/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6361 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 29-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T BANUSEKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2258/MDS/2016 & C.O. NO.128/MDS/2016 (IN I.T.A. NO.2258/MDS/2016) ' (' / ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(2), CHENNAI - 600 034. V. M/S ROVERCO APPAREL COMPANY PVT. LTD., NO.37, TTK ROAD, ALWARPET, CHENNAI - 600 018. PAN : AACCR 4890 A (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI AR.V. SREENIVASAN, JCIT ,-*+ . / / RESPONDENT BY : SHRI T. BANUSEKAR, CA 0 . 1$ / DATE OF HEARING : 27.07.2017 2!( . 1$ / DATE OF PRONOUNCEMENT : 23.08.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE REVENUE HAS FILED THE APPEAL AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, CHENNAI, DA TED 31.03.2016 FOR ASSESSMENT YEAR 2011-12 AND THE ASSE SSEE HAS FILED THE CROSS-OBJECTION AGAINST THE SAME ORDER OF THE 2 I.T.A. NO.2258/MDS/16 C.O. NO.128/MDS/16 CIT(APPEALS). THEREFORE, WE HEARD BOTH THE APPEAL AND CROSS- OBJECTION TOGETHER AND DISPOSING OF THE SAME BY THI S COMMON ORDER. 2. WHEN THE APPEAL WAS TAKEN UP FOR HEARING, SHRI A R.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, S UBMITTED THAT THE PRINCIPAL COMMISSIONER, ON EXAMINATION OF FILE, FOUND THAT NOTWITHSTANDING THE ADMINISTRATIVE APPROVAL GRANTED BY THE ADMINISTRATIVE COMMISSIONER, THE REVENUE HAS LITTLE MATERIAL TO PRESS THIS APPEAL BEFORE THIS TRIBUNAL. THEREFORE, ON THE BASIS OF THE LETTER OF THE PRINCIPAL COMMISSIONER DATED 26.0 7.2017, THE APPEAL MAY BE TREATED AS WITHDRAWN. ACCORDINGLY, T HE APPEAL OF THE REVENUE IN I.T.A. NO.2258/MDS/2016 IS DISMISSED AS WITHDRAWN. 3. NOW COMING TO THE CROSS-OBJECTION FILED BY THE A SSESSEE, SH. T. BANUSEKAR, THE LD. REPRESENTATIVE FOR THE AS SESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS DISALLOWANCE OF ` 74,35,221/- UNDER SECTION 40(A)(I) OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') IN RESPECT OF PA YMENT MADE FOR COMMISSION. THE ASSESSING OFFICER CLAIMS THAT THE PAYMENT WAS MADE FOR DESIGN AND DEVELOPMENT CHARGES. SINCE THE NATURE OF PAYMENT WAS NOT DISCUSSED BY EITHER AUTHORITIES BEL OW AND FACTS ARE ALSO NOT BROUGHT ON RECORD BY BOTH THE AUTHORIT IES, THE LD. 3 I.T.A. NO.2258/MDS/16 C.O. NO.128/MDS/16 REPRESENTATIVE SUBMITTED THAT THE MATTER MAY BE REM ITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATI ON. 4. WE HAVE HEARD SHRI AR.V. SREENIVASAN, THE LD. D. R. ALSO. THE LD. D.R. ALSO SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-EXAMINATIO N IN ORDER TO FIND OUT THE NATURE OF PAYMENT MADE BY THE ASSESSEE. 5. HAVING HEARD THE LD. REPRESENTATIVE FOR THE ASSE SSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE NATURE OF PAYMENT NEEDS TO BE BROUGHT ON RECORD, WHETHER THE PAYMENT IS FEE FOR TECHNICAL SERVICES OR FOR COMMISSION HAS TO BE DETERMINED ONLY AFTER CONSIDER ING THE PURPOSE FOR WHICH THE PAYMENT WAS MADE. EVEN THOUG H THE ASSESSEE CLAIMS THAT THE PAYMENT WAS FOR THE PURPOS E OF COMMISSION, THE FACT WAS NOT EXAMINED BY BOTH THE A UTHORITIES BELOW. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OF FICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW IN RESPECT OF THE DISALLOWANCE MADE UNDER SECTION 40(A)(I) OF THE ACT TO THE EXTENT OF ` 74,35,221/- ARE SET ASIDE AND THE ISSUE IS REMITTE D BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER SHALL RE- 4 I.T.A. NO.2258/MDS/16 C.O. NO.128/MDS/16 EXAMINE THE MATTER AFRESH ON THE BASIS OF THE MATER IAL THAT MAY BE PRODUCED BY THE ASSESSEE AND THEREAFTER BRING ON RE CORD THE ACTUAL PURPOSE / NATURE OF PAYMENT AND THEREAFTER DECIDE T HE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE O PPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AS WITHDRAWN. HOWEVER, THE CROSS-OBJECTION OF THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23 RD AUGUST, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 23 RD AUGUST, 2017. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-3, CHENNAI 4. PRINCIPAL CIT, CHENNAI-5, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.