M/s Llyoda Offshore Global Services Private Limited, Bangalore V. DCIT, Bangalore

ITA 245/BANG/2015

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9765 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IT(TP)A.245/BANG/2015 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A NO.245/BANG/2015 (ASSESSMENT YEAR : 2010-11) M/S. LLOYDS OFFSHORE GLOBAL SERVICES P. LTD, UNIT 2 LEVEL 2 BAGMANE TRIDIB, B-WING, BAGMANE TECHNOLOGY PARK, C. V. RAMAN NAGAR, BANGALORE 560 093 .. APPELLANT PAN : AAACL9321N V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -4(1)(1), BANGALORE .. RESPONDENT ASSESSEE BY : SHRI. CHAVALI NARAYAN, CA REVENUE BY : SHRI. C. H. SUNDAR RAO, CIT -I HEARD ON : 17.06.2015 PRONOUNCED ON : 23 .06.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, IT IS AGGRIEV ED WITH AN AD-HOC DISALLOWANCE OF RS.1,49,17,777/-, MADE BY THE AO. AS PER THE ASSESSEE, DISALLOWANCE WAS ARBITRARY AND WITHOUT CONSIDERING THE ASSESSEES PLEA FOR ADDITIONAL TIME FOR SUBMISSION OF THE DOCUMENTS AND RECORDS CALLED FOR BY THE AO. IN THE GROUNDS IT IS ALSO MENTIONED THAT THE A O NOR THE DRP NEVER CALLED IT(TP)A.245/BANG/2015 PAGE - 2 FOR THE INVOICES, BUT STILL ASSESSEE HAD SUO MOTU S UBMITTED COPIES OF INVOICES ALONG WITH THE DETAILS OF THE CLAIM OF EXPENDITURE. 02. FACTS APROPOS ARE THAT ASSESSEE ENGAGED IN BANK ING AND FINANCIAL BUSINESS HAD FILED ITS RETURN OF INCOME DECLARING INCOME OF RS.1,87,89,034/-, FOR THE IMPUGNED ASSESSMENT YEAR. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, APART FROM THE ADJUSTMENTS RECOMMENDED BY THE TPO U/S.92C A OF THE INCOME-TAX ACT, 1961 (THE ACT IN SHORT), AO ALSO FOUND THAT ASSESSEE COULD NOT SUPPORT ITS CLAIM OF EXPENDITURE OF RS.13,89,42,136/- UNDER VA RIOUS HEADS. AS PER THE AO, ASSESSEE WAS ISSUED A NOTICE ON 29.01.2014 REQUIRIN G THE ASSESSEE TO FILE THE DETAILS IN RESPECT OF ITS CLAIM OF EXPENDITURE. AO ALSO MENTIONED THAT AUTHORISED REPRESENTATIVE OF THE ASSESSEE WHO APPEARED ON 14.0 2.2014 BEFORE HIM EXPRESSED HIS INABILITY TO FURNISH THE DETAILS CALL ED FOR. THEREFORE HE MADE AN AD HOC DISALLOWANCE CALCULATED AS PER THE FOLLOWING TA BLE : SL NO PARTICULARS OF EXPENSE AMOUNT CLAIMED (RS) DISALLOWANCE MADE (RS) REMARKS 1 REPAIRS AND MAINTENANCE OTHERS 12,03,002 3,00,751 25% OF EXPENSES DISALLOWED ON WANT OF PROPER EVIDENCE / BILLS / INVOICES 2 LEGAL AND PROFESSIONAL FEES 1,67,80,676 41,95,169 A STEEP INCREASE IN THIS EXPENSE COMPARED TO PREVIOUS YEAR AND NO SUPPORTING DOCUMENT WAS SUBMITTED BY THE ASSESSEE. HENCE, 25% IS DISALLOWED 3 TRAVEL AND CONVEYANCE 2,98,57,097 74,64,274 NO SUPPORTING DOCUMENT WAS SUBMITTED. HENCE, 25% IT(TP)A.245/BANG/2015 PAGE - 3 OF SUCH EXPENSES IS DISALLOWED 4 COMMUNICATION EXPENSES 24,76,823 6,19,205 -DO- 5 CLAIMS WRITTEN OFF 15,33,105 15,33,105 FULL AMOUNT IS DISALLOWED AS NO SUPPORTING DOCUMENT WAS SUBMITTED 6 MISCELLANEOUS EXPENSES 32,21,092 8,05,273 NO SUPPORTING DOCUMENT WAS SUBMITTED. HENCE, 25% OF SUCH EXPENSES IS DISALLOWED 03. WHEN A DRAFT ASSESSMENT WAS PROPOSED ON THE ABO VE LINES, ASSESSEE CHOSE TO MOVE THE DRP. BEFORE THE DRP ARGUMENT OF THE AS SESSEE IN RELATION TO THE AD HOC DISALLOWANCE WAS THAT IT HAD COOPERATED WITH THE AO AND SUBMITTED DETAILED SUBMISSIONS VIDE ITS LETTER DT.09.12.2013 AND 29.01.2014. AS PER THE ASSESSEE, AO HAD ISSUED NOTICE DT 29.01.2014 WHICH WAS RECEIVED BY THE ASSESSEE ON 03.02.2014. SINCE THE DETAILS CALLED F OR BY THE AO WERE VOLUMINOUS AND SINCE THERE WAS ONLY SHORT TIME GIVE N BY THE AO, ASSESSEE COMPILED PART OF SUCH DETAILS AND SUBMITTED IT TO T HE AO. HOWEVER, AS PER THE ASSESSEE, ASSESSMENT PROCEEDINGS WERE CONCLUDED ON 14.02.2014. ASSESSEE ALSO SUBMITTED THAT ON 14.02.2014 IT HAD FURNISHED THE F ULL DETAILS WHICH WERE CALLED FOR BUT THIS WAS NOT CONSIDERED BY THE AO. 04. ON THE BASIS OF THE ABOVE SUBMISSIONS OF THE AS SESSEE AND CONSIDERING THE EVIDENCE FILED BY THE ASSESSEE BEFORE IT, LD. DRP S OUGHT A REMAND REPORT FROM THE AO. IN SUCH REMAND REPORT, AO STATED THAT ONLY SAMPLE BILLS AND VOUCHERS IT(TP)A.245/BANG/2015 PAGE - 4 WERE PRODUCED BY THE ASSESSEE, AND DESPITE OPPORTUN ITY GRANTED TO IT, IT HAD NOT FURNISHED THE FULL DETAILS DURING THE COURSE OF ASS ESSMENT PROCEEDINGS. IN OTHER WORDS, AS PER THE AO, ASSESSEE COULD NOT SHOW SUFFI CIENT CAUSE FOR NOT PRODUCING THE EVIDENCE AT THE TIME OF THE ORIGINAL PROCEEDINGS BEFORE HIM. AS PER THE AO, EVIDENCE PRODUCED BEFORE THE DRP OUGHT NOT TO BE CONSIDERED. 05. IN REPLY TO THE ABOVE REMAND REPORT, ASSESSEE S TATED THAT IT WAS NOT GIVEN SUFFICIENT OPPORTUNITY AND AD HOC DISALLOWANCE MADE DISREGARDING THE DOCUMENTS SUBMITTED WAS UNJUSTIFIED. DRP AFTER CON SIDERING THE SUBMISSIONS AND REMAND REPORT OF THE AO WAS OF THE OPINION THAT ASSESSEE HAD CHOSEN TO FILE PART DETAILS AND DOCUMENTS AND THEY WERE NOT WILLIN G TO FILE THE DETAILS CALLED FOR BY THE AO. AS PER THE DRP, IT WAS THE ONUS OF THE ASSESSEE TO JUSTIFY THE CLAIM OF EXPENDITURE BY SUBMITTING THE EVIDENCE REQUIRED. TAKING THIS VIEW OF THE MATTER, DRP CONFIRMED THE AD HOC DISALLOWANCE. 06. NOW BEFORE US, LD. AR SUBMITTED THAT ASSESSEE H AD GIVEN DETAILED DOCUMENTS ON 03.04.2012 BEFORE THE AO DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, PLACED AT PAPER BOOK PAGE 626 TO 671. AS PER THE LD. AR, NOTICE DT 13.11.2013 (PB PAGE 623 TO 625) ISSUED BY THE AO WAS RECEIVED BY THE ASSESSEE ON 06.12.2013 AND AS PER THIS NOTICE THE D ETAILS WERE TO BE FURNISHED ON OR BEFORE 10.12.2013. DETAILS WHICH THE AO HAD SOUGHT, WHICH IS ALLEGED TO NOT HAVE BEEN GIVEN BY THE ASSESSEE ARE IN A NOTICE DT 29.01.2014, WHICH WAS SERVED ON THE ASSESSEE ONLY ON 03.02.2014 (PB PAGE 556 & 557). ASSESSEE HAD ON 14.02.2014 FURNISHED ALL DETAILS THAT WERE CALLE D FOR, BUT REGRETFULLY THE IT(TP)A.245/BANG/2015 PAGE - 5 ASSESSMENT ORDER WAS PASSED ON 14.02.2014 GIVING NO OPPORTUNITY TO THE ASSESSEE. LD. AR SUBMITTED THAT EVEN DURING THE DR P PROCEEDINGS, THOUGH THE MATTER WAS REMANDED TO THE AO, HE REFUSED TO CONSID ER THE DETAILS AND SUBMISSIONS INCLUDING THE INVOICES SUPPORTING THE E XPENDITURE CLAIMED. THUS ACCORDING TO HIM, THERE WAS GROSS INJUSTICE, BY DE NYING A REASONABLE OPPORTUNITY TO THE ASSESSEE FOR PROVING ITS CLAIM O F EXPENDITURE. 07. PER CONTRA LD. DR SUPPORTED THE ORDERS OF THE L OWER AUTHORITIES. 08. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. WE FIND FROM THE CHRONOLOGY OF EVENTS LEADING TO THE ASSESS MENT ORDER, THAT ON THE NOTICE DT 29.01.2014 ISSUED BY THE AO, ASSESSEE HAD MADE DETAILED SUBMISSIONS ON 14.02.2014. NO DOUBT IN THE NOTICE OF THE AO TI ME GRANTED TO THE ASSESSEE WAS ONLY UP TO 10.02.2014. HOWEVER, THE INFORMATIO N CALLED FOR IN THE SAID NOTICE WAS, ACCORDING TO THE ASSESSEE, VOLUMINOUS A ND REQUIRED TIME FOR COMPILATION. ASSESSEES SUBMISSIONS FILED ON 14.02 .2014 WAS NEVER CONSIDERED BY THE AO OR THE DRP CITING A REASON THAT ASSESSEE HAD NOT FILED IT WITHIN THE TIME PERIOD ALLOWED TO IT. WE ARE CONSTRAINED TO A GREE WITH THE ARGUMENT OF THE LD. AR THAT SUFFICIENT OPPORTUNITY WAS NOT GRANTED TO THE ASSESSEE, SINCE THE ASSESSMENT ORDER WAS PASSED ON THE SAME DAY ON WHIC H THE ASSESSEE HAD FILED THE SUBMISSIONS. IN THE PROCEEDINGS BEFORE THE DRP , THOUGH THERE WAS A REMAND BY THE DRP, AO INSTEAD OF VERIFYING THE EVID ENCE TOOK A TECHNICAL VIEW THAT ASSESSEE HAD NOT AVAILED THE OPPORTUNITIES GRA NTED TO IT FOR FILING THE DETAILS AND EVIDENCE BEFORE HIM DURING THE COURSE OF ASSESS MENT PROCEEDINGS. IN THE IT(TP)A.245/BANG/2015 PAGE - 6 CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE MATTE R REQUIRES A FRESH LOOK BY THE AO. WE, THEREFORE, SET ASIDE THE ORDERS OF AUTHORI TIES BELOW AND REMIT THE ISSUE REGARDING AD HOC DISALLOWANCE OF VARIOUS EXPENDITUR E BACK TO THE FILE OF AO FOR CONSIDERATION AFRESH AFTER GIVING ADEQUATE OPPORTUN ITY TO THE ASSESSEE FOR SUBSTANTIATING ITS CLAIM. 09. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD DAY OF J UNE, 2015. SD/- SD/- (SMT. P. MADHAVI DEVI) (ABRAHAM P GE ORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER