Visteon Automotive Systems India Private Limited, Chengalput V. DCIT, CHENNAI

ITA 2428/CHNY/2014

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9176 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 08-11-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 25-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: N V BALAJI
• Keywords: Opportunity of being heard; Additional evidence
• Section: 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH : CHENNAI , . , [BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] !' ./I.T.A. NO.2428/CHNY/2014. #$% &$ / ASSESSMENT YEAR : 2009-2010. M/S. HANON AUTOMOTIVE SYSTEMS INDIA PRIVATE LIMITED, (FORMERLY KNOWN AS VISTEON AUTOMOTIVE SYSTEMS INDIA PRIVATE LTD) KEELAKARANAI VILLAGE, MELROSAPURAM POST, MARAIMALAI NAGAR, CHENGALPATTU DIST. TAMIL NADU 603 204. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(4) CHENNAI [PAN AAACM 6890R] ( / APPELLANT) ( /RESPONDENT) !' '( ) * / APPELLANT BY : SHRI. N.V. BALAJI, ADVOCATE +,'( ) * /RESPONDENT BY : SHRI. AR.V. SREENIVASAN, JCIT. # - ) . /DATE OF HEARING : 11-12-2019 /0&% ) . /DATE OF PRONOUNCEMENT : 12-12-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-III, CHENNAI ITA NO.2428 /2014 :- 2 -: (CIT(A) FOR SHORT) DATED 30.06.2014 FOR THE ASSE SSMENT YEAR (AY) 2009-2010. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE ORDER PASSED BY THE ASSESSING OFFICER (AO) AND AFFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [(CIT(A)J IS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO APPELLANT. 2. THAT THE LEARNED CIT(A) EARNED IN NOT PROVIDING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE APPELL ANT. TRAINING AND EDUCATION EXPENSES: 3. THAT THE AO AND THE LEARNED CIT(A) ERRED IN HOLD ING THAT TRAINING AND EDUCATION EXPENSES OF 59,27,479/- IS CHARGEABLE TO FRINGE BENEFIT TAX (FBT). 4. THAT THE AO AND THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE TRAINING AND EDUCATI ON EXPENSES OF 59,27,479/- IS INCURRED TOWARDS IN-HOUSE TRAINING FOR THE EMPLOYEES OF THE APPELLANT, WHICH IS NOT CHARGEABLE TO FBT. COMMUNICATION EXPENSES: 5. THAT THE AO AND THE LEARNED CIT(A) ERRED IN HOLD ING THAT COMMUNICATION EXPENSES AMOUNTING TO 73,76,101/- IS CHARGEABLE TO FBT. 6. THAT THE AO AND THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE COMMUNICATION EXPENS ES AMOUNTING TO RS 99,47,966 IS INCURRED FOR AVAILING BANDWIDTH SERVICES, WHICH IS NOT CHARGEABLE TO FBT. 7. NOTWITHSTANDING THE APPELLANTS TREATMENT IN THE RETURN OF INCOME, THE LEARNED CIT(A) ERRED IN NOT APPRECIA TING THAT COMMUNICATION EXPENSES OF 25,71,865/- (INCURRED FOR AVAILING BANDWIDTH SERVICES) HAS BEEN INADVERTE NTLY DISCHARGED TO FBT. 8. THAT THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE CLAIM OF EXCESS FBT DISCHARGED ON COMMUNICATION EXPENSES OF 25,71,865/- BY RELYING ON THE DECISION OF SUPREME COURT IN THE CASE OF GOETZE INDIA LTD WITHO UT ITA NO.2428 /2014 :- 3 -: APPRECIATING THE FACT THAT GOETZE INDIA LTD IS CONF INED TO CASES WHERE THE CLAIM IS MADE ONLY BEFORE THE AO AN D NOT BEFORE THE APPELLATE AUTHORITIES. THE CIT(A) OU GHT TO HAVE ENTERTAINED AND ADJUDICATED ON THE CLAIM OF APPELLANT. MEDICAL REIMBURSEMENT: 9. THAT THE AO AND THE LEARNED CIT(A) ERRED IN HOLD ING THE MEDICAL ALLOWANCE AMOUNTING TO 75,47,083/- TO FBT. 10. THAT THE AO AND THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE MEDICAL ALLOWANCE AMOUNTING TO 90,87,040/- IS NOT CHARGEABLE TO FBT. 11. NOTWITHSTANDING THE APPELLANTS TREATMENT IN TH E RETURN OF INCOME, THE AO AND THE LEARNED CIT(A) ERR ED IN NOT APPRECIATING THAT MEDICAL EXPENSES OF RS 15,39, 957 HAS BEEN INADVERTENTLY DISCHARGED TO FBT. 12. THAT THE LEARNED CIT(A) ERRED IN NOT CONSIDERIN G THE CLAIM OF EXCESS FBT DISCHARGED ON MEDICAL ALLOWANCE OF RS 25,7 1,865 BY RELYING ON THE DECISION OF SUPREME COURT IN THE CASE OF GOETZE INDIA LTD WITHOUT APPRE CIATING THE FACT THAT GOETZE INDIA LTD IS CONFINED TO CASES WHERE THE CLAIM IS MADE ONLY BEFORE THE AO AND NOT BEFORE THE APPELLATE AUTHORITIES. THE CIT(A) OUGHT TO HAVE ENTERTAINED AND ADJUDICATED ON THE CLAIM OF APPELLA NT.. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMI T, AMEND OR DELETE ONE OR MORE OF THE ABOVE GROUNDS OF APPEAL STATED HEREINABOVE, BEFORE COMMENCEMENT OF O R AT THE TIME OF HEARING. 3. T HE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT NAMELY M/S. HANON AUTOMOTIVE SYSTEMS INDIA PRIVATE LIMITED IS A COMPANY INCORPORATED UNDER TH E PROVISIONS OF THE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINES S OF MANUFACTURING AND SALE OF MOTOR VEHICLE PARTS AND ACCESSORIES. T HE RETURN OF FRINGE BENEFITS FOR THE AY 2009-10 WAS FILED ON 30.09.2009 DISCLOSING TOTAL ITA NO.2428 /2014 :- 4 -: VALUE OF RS. 2,39,46,017/-. THE ASSESSMENT WAS COM PLETED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCL E III(4), CHENNAI (HEREINAFTER CALLED AO) VIDE ORDER DATED 08.12.20 11 PASSED U/S. 115 WE(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE AC T) AT VALUE OF G4,74,46,600/- AFTER MAKING DISALLOWANCE OF EXPENSE S AND ADDITIONS TOWARDS MEDICAL REIMBURSEMENT EXPENSES OF G15,09,41 7/-, CONTRIBUTION TO SUPERANNUATION FUND G82,39,789/-, T RAINING AND EDUCATION EXPENSES OF G59,27,479/-, EMPLOYEES WELFA RE OF G3,06,421/, COMMUNICATION EXPENSES OF G14,75,220/- AND FOOD EX PENSES OF G60,42,257/-. 4. BEING AGGRIEVED BY THE ABOVE ADDITIONS, THE ASSESS EE- COMPANY PREFERRED AN APPEAL BEFORE LD. CIT(A), WH O VIDE IMPUGNED ORDER GRANTED RELIEF IN RESPECT OF FOOD EXPENSES, EMPLOYEES WELFARE EXPENDITURE, CONTRIBUTION TOWARDS SUPERANNUATION FUND AND BALANCE ADDITIONS WERE CONFIRMED BY THE LD. CIT(A). 5. AGGRIEVED BY THAT PART OF THE LD. CIT(A) ORDER, WHI CH IS AGAINST ASSESSEE-COMPANY, THE ASSESSEE COMPANY IS IN APPEAL BEFORE US. DURING THE COURSE OF HEARING OF THE APP EAL, ASSESSEE HAD FILED ADDITIONAL EVIDENCE IN RESPECT OF IN-HOUSE T RAINING EXPENDITURE IN THE FORM OF PASSPORT COPIES OF EMPLOYEES IN ORDER TO SUBSTANTIATE THAT THE EXPENDITURE WAS INCURRED ONLY TOWARDS IN-H OUSE TRAINING. IT ITA NO.2428 /2014 :- 5 -: IS SUBMITTED THAT ADDITIONAL EVIDENCE IS CRUCIAL FOR DETERMINING THE APPEAL. THUS, IT IS PRAYED THAT ADDITIONAL EVIDENC E SHOULD BE ADMITTED. 6. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRES ENTATIVE DID NOT RAISE ANY SERIOUS OBJECTION IN ADMITTING TH E ADDITIONAL EVIDENCE. 7. HAVING REGARD TO THE SUBMISSIONS MADE BY THE ASSES SEE, WE ARE OF THE CONSIDERED OPINION THAT ADDITIONAL EVID ENCE FILED BEFORE US IS CRUCIAL IN DETERMINING THE ISSUE IN APPEAL. WE ARE ALSO SATISFIED WITH THE REASONS GIVEN AS TO WHY THE ADDITIONAL EVIDENC E COULD NOT BE PRODUCED BEFORE LOWER AUTHORITIES. THEREFORE, WE ADMIT THE ADDITIONAL EVIDENCE. IN THE CIRCUMSTANCES, WE R EMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO ADJUDICATE T HE ISSUE IN APPEAL AFRESH IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 12TH DAY OF DECEMBER, 2019 , AT CHENNAI. SD/- SD/- ( . ! ) (DUVVURU RL REDDY) ' # /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER 1 #- / CHENNAI 2# / DATED: 12TH DECEMBER, 2019. KV 3 ) +.4 5' !6 5&. / COPY TO: 1. !' '( / APPELLANT 3. 7. (!' ) / CIT(A) 5. 5 :; +.#< / DR 2. +,'( / RESPONDENT 4. 7. / CIT 6. ;$ =- / GF ITA NO.2428 /2014 :- 6 -: