Sri Seethala Balaji Motors P Ltd., CHENNAI V. DCIT, Trichy

ITA 2322/CHNY/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7919 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 30-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 16-09-2014
• Court: TRIBUNAL
• Department Lawyers: DURAI
• Assessee Lawyers: A S SRIRAMAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! ' ! # . $ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.2322/MDS./2014 / ASSESSMENT YEAR : 2010-11 M/S.SRI SEETHALA BALAJI MOTORS P LTD., 24, BIRDS ROAD, CANTONMENT, TRICHY 620 001. VS. THE DCIT, CIRCLE 1(1), TRICHY. [PAN AAJCS 4115 Q ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI A.S.SRIRAMAN ADVOCATE /RESPONDENT BY : SHRI DURAI PANIDAN, JCIT D.R / DATE OF HEARING : 30 - 0 1 - 201 7 / DATE OF PRONOUNCEMENT : 08 - 02 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TIRUCHIR APALLI DATED 16.07.2014 PERTAINING TO ASSESSMENT YEAR 2010-11. ITA NO.2322/16 :- 2 -: 2. THE FIRST ISSUE IN THIS APPEAL IS WITH REGARD T O DISALLOWANCE OF EXPENSES AGGREGATING TO ` 16,02,081/- AS PRIOR PERIOD EXPENSES. 3. THE ASSESSEE CLAIMED AN EXPENDITURE OF ` 21,23,022/- AS INITIAL EXPENSES. IT WAS STATED THAT THE TATA MOTO RS DIVISION AT THANJAVUR WAS STARTED DURING THE FINANCIAL YEAR 200 9-10 AND EXPENSES INCURRED IN FINANCIAL YEAR 2008-09 WERE NOT CLAIMED AS EXPENDITURE. HENCE, THE SAME WAS CLAIMED DURING THE YEAR UNDER C ONSIDERATION. SINCE THE EXPENDITURE WAS INCURRED IN THE FINANCIAL YEAR 2008-09, THE SAME WAS DISALLOWED BY THE AO TREATING IT AS PRELI MINARY EXPENSES IN CONNECTION WITH THE TATA MOTORS DIVISION AT THANJAV UR AND ALLOWED ONLY ONE FIFTH (1/5 TH ) OF SUCH EXPENDITURE U/S.35D OF THE ACT. ACCORDING TO LD.A.R, THE SAID EXPENDITURE WAS ASCER TAINED ONLY IN FINANCIAL YEAR 2009-10, AS SUCH THE EXPENDITURE CLA IMED IN ASSESSMENT YEAR UNDER CONSIDERATION AND IT IS TO BE ALLOWED, THOUGH THE ASSESSEE HAS BEEN FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNT ING. THIS PLEA OF ASSESSEE WAS REJECTED BY THE LOWER AUTHORITIES. HEN CE, THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD.A.R REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES ON EARLIER OCCASION. IN OUR OPINI ON, IT IS NOT DISPUTED THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM O F ACCOUNTING AND THE ITA NO.2322/16 :- 3 -: EXPENDITURE WAS INCURRED NOT IN THE YEAR UNDER CONS IDERATION AND IT WAS INCURRED IN EARLIER FINANCIAL YEAR 2008-09. HEN CE, THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATING TO THE PRELIMI NARY EXPENDITURE OF TATA MOTORS DIVISION AT THANJAVUR WAS RIGHTLY TREA TED AS EXPENDITURE U/S.35D OF THE ACT AND ONE FIFTH OF IT WAS ALLOWED . IN OUR OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE LOWER AUT HORITIES AND THE SAME IS CONFIRMED. THIS GROUND OF ASSESSEE IS REJECTED. 5. THE SECOND ISSUE IS WITH REGARD TO DISALLOWANCE OF ` 3,93,049/- ON ACCOUNT OF DIFFERENCE BETWEEN THE IN COME ADMITTED AS PER 26AS AND P& L ACCOUNT. 6. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE IS NOT ABLE TO RECONCILE THE AMOUNT MENTIONED IN 26AS AND THE INCO ME SHOWN IN THE P&L A/C. AT THE TIME OF HEARING THE LD.A.R PLEADED AN OPPORTUNITY TO RECONCILE THE INCOME SHOWN IN 26AS AND P&L A/C. ACC ORDINGLY, WE ARE INCLINED TO REMIT THE ISSUE TO THE FILE OF LD.CIT(A ) FOR FRESH CONSIDERATION WITH A DIRECTION TO THE ASSESSEE TO R ECONCILE THE SAME. THIS GROUND IS PARTLY ALLOWED. 7. THE LAST ISSUE IN THIS APPEAL IS WITH REGARD T O DISALLOWANCE OF POOJA EXPENSES OF ` 44,228/- AND DISALLOWANCE OF EXPENSES ITA NO.2322/16 :- 4 -: U/S.40A(3) OF THE ACT AT ` 5,08,000/- AND DISALLOWANCE OF ` 2,82,210/- BEING 10% OF THE EXPENSES TABULATED IN PARA 7 OF THE ASSESSMENT ORDER FOR WANT OF EVIDENCE. 8. THESE GROUNDS ARE NOT RAISED BEFORE THE CIT(A) AND FIRST TIME RAISED BEFORE THIS TRIBUNAL AND THE LD.CIT(A) HAS NO OCCASION TO CONSIDER THE SAME. HENCE, IN THE INTEREST OF JUSTIC E, WE REMIT THE ISSUE TO THE FILE OF LD.CIT(A) FOR HIS CONSIDERATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 08 TH FEBRUARY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 08 TH FEBRUARY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 4. - 1 / CIT 2. / RESPONDENT 5. /23- 4 / DR 3. - 1-!' / CIT(A) 6. 3&-5 / GF