TALENT AHEAD INDIA PVT. LTD., MUMBAI V. DCIT 1(3)(1), MUMBAI

ITA 2836/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1226 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: J
• Next Hearing Date: 04-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 18-04-2016
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Assessee Lawyers: MITHUN SHETTY
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 69C; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 2836/M/2016 (AY 2012 - 2013 ) M/S. TALENTAHEAD INDIA PVT LTD., 201, PADMINI BUILDING, TELY GALLI CROSS ROAD, ANDHERI (E), MUMBAI 400 069. / VS. DCIT - 1(3)(1), AAYAKAR BHAVAN, MUMBAI 400 007. ./ PAN : AABCT1959K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MITHUN SHETTY / RESPONDENT BY : MS. BEENA SANTOSH, DR / DATE OF HEARING : 21.02 .2017 / DATE OF PRONOUNCEMENT : 12 .04.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 18.4.2016 IS AGAINST THE ORDER OF THE CIT (A) - 3, MUMBAI DATED 21.12.2015 FOR THE ASSESSMENT YEAR 2012 - 13. IN THIS APPEAL, ASSESSEE RAISED TWO GROUNDS AND THE SAME READ AS UNDER: - 1. THE LD CIT (A) HAS ERRED IN LAW AND FACTS AND IN CIRCUMSTANCES OF THE CASE IN CONFIRMING ADDITION TO TOTAL INCOME OF RS. 6,60,000/ - UNDER SECTION 69C OF THE ACT IN RESPECT OF CONSULTANCY CHARGES PAID TO CERTAIN KEY MANAGEMENT PERSONNEL. 2. THE LD CIT (A) ERRED IN LAW AND FACTS AND IN CIRCUMSTANCES OF THE CASE BY NOT ALLOWING CREDIT OF RS. 8,111/ - FOR PAYMENT OF DIVIDEND DISTRIBUTION TAX. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RECRUITMENT OF EMPLOYEES FOR VARIOUS COMPANIES ON OUTSOURCING BASIS . ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 30,77,670/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 37,37,670/ - . IN THE ASSESSMENT, AO MADE ADDITION OF RS. 6,60,000/ - U/S 69C OF THE ACT ON ACCOUNT OF CONSULTANCY CHARGES PAID TO SMT. ANITA AGARWAL (RS. 4,80,000/ - ) AND SMT. SHAKUNTALA AGARWAL (RS. 1,80,000/ - ). ON FINDING THAT SMT. ANITA AND SMT. SHAKUNTALA ARE NOT PROPERLY QUALIFIED TO RENDER THE SERVICES, AO DISALLOWED THE SA ID AMOUNT TOTALLING TO RS. 6.6 LAKHS. IN THE PROCESS, 2 AO IGNORED THE FACT THAT OF RENDERING THE SERVICES AND ALSO THE FACT THAT SMT. ANITA IS A QUALIFIED GRADUATE. THERE IS NOTHING ON RECORD COLLECTED BY THE AO TO PROVE THAT THEY HAVE NOT RENDERED ANY SE RVICES. AO ACCORDINGLY REJECTED THE EXPLANATION GIVEN BY THE ASSESSEE. ON APPEAL, CIT (A) CONFIRMED THE SAME. AGGRIEVED, ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 3. BEFORE US, LD COUNSEL FOR THE ASSESSEE S UBMITTED THAT IN THE SAID EMPLOYEES, SMT. ANITA IS A GRADUATE AND FILED RELEVANT CERTIFICATES IN SUPPORT OF THE SAME. THE FACT THAT THE EMPLOYEES (SMT. ANITA AND SMT. SHAKUNTALA) HAVE RENDERED SERVICES WAS ALSO EXPLAINED. FURTHER, LD AR MENTIONED THAT TH E ASSESSEE DONE THE BUSINESS AMOUNTING TO RS. 3.77 CRS AND THE EXPENDITURE CLAIMED AGAINST THE SAME, AMOUNTING TO RS. 3.47 CRS, IS APPROPRIATE. LD AR FURTHER MENTIONED THAT RECIPIENTS OF THE ABOVE CONSULTANCY CHARGES ARE REGULARLY ASSESSED TO TAX. THEY A LSO PAID TAXES ON THE INCOME RECEIVED BY THE SAID RECIPIENTS SMT. ANITA AND SMT. SHAKUNTALA . ASSESSEE FILED RELEVANT COPIES OF THE ACKNOWLEDGEMENTS IN THIS REGARD BEFORE US. LD AR FURTHER SUBMITTED THAT THE SAME AMOUNT CANNOT BE TAXED TWICE IE ONCE IN TH E HANDS OF THE ASSESSEE AS WELL AS IN THE HANDS OF THE RECIPIENTS. CONSIDERING THE SAME, LD AR PRAYED FOR DELETING THE ADDITION. 4. ON HEARING BOTH THE PARTIES, WE FIND, THE CLAIM OF THE ASSESSEE IS PROPER. AO HAS NOT DEMONSTRATED THE PAYMENTS TO SMT. ANI TA AND SMT. SHAKUNTALA ARE NOT BOGUS. THERE IS NO EVIDENCE TO DEMON STRATE THAT MONEY PAID TO THEM W AS RECEIVED BACK BY THE ASSESSEE. NO CASE IS MADE OUT BY THE ASSESSING OFFICER TO DEMONSTRATE THAT THE RELEVANT PROVISIONS OF SECTION 40A(2)(B) ARE APPLICAB LE IN THE PRESENT CASE. IT IS NOT UNDERSTOOD AS TO WHY THE PROVISIONS OF SECTION 69C WERE INVOKED BY THE ASSESSING OFFICER IN THIS CASE. CONSIDERING THE OVERALL FACTUAL MATRIX OF THE ASSESSEE, WE ARE OF THE OPINION, IT IS NOT A FIT CASE FOR MAKING DISALL OWANCE ON THIS ACCOUNT. ACCORDINGLY, GROUND NO.1 IS ALLOWED. 5. GROUND NO.2 (SIC) RAISED BY THE ASSESSEE RELATES TO THE AOS FAILURE TO GIVE CREDIT TO THE DIVIDEND DISTRIBUTION TAX OF RS. 8,111/ - . IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE SUBMITTED THA T THIS ISSUE MAY BE SET ASIDE TO THE FILE OF THE AO FOR CONSIDERING THE PAGE 55 OF THE PAPER BOOK IE CYBER RECEIPT FOR CBDT E - TAX PAYMENT VIDE AXIX BANK CHALLAN NO.ITNS 280 EVIDENCING THE TDS OF RS. 8,111/ - IN FAVOUR OF THE ASSESSEE. AFTER HEARING BOTH TH E PARTIES, WE DIRECT THE ASSESSING OFFICER TO 3 EXAMINE THE SAID PAYMENT AND DECIDE THE ISSUE AFRESH AFTER GIVING CREDIT TO THE SAME. AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. ACCOR DINGLY, GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN COURT O F 1 2 T H APRIL, 2017. S D / - S D / - ( PAWAN SINGH) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 12.04.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI