ACIT (OSD) 8(3), MUMBAI V. WELSET PLAST EXTRUCIONS P. LTD, MUMBAI

ITA 3138/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56191 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 20-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: K SHIVARAM

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI D.K.AGARWAL, JM ITA NO.3138/MUM/2010 : ASST. YEAR 2006-2007 THE ASSTT.COMMISSIONER OF INCOME-TAX (OSD) 8(3) MUMBAI. M/S.WELSET PLAST EXTRUSIONS PVT.LTD. 8 METALAGE INDL. COMPLEX SUBHASH ROAD, OFF CAVES ROAD JOGESHWARI (E), MUMBAI 400 059. PAN :AAACW0614K. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI V.V.SHASTRI RESPONDENT BY : SHRI K.SHIVARAM DATE OF HEARING : 20.12.2011 DATE OF PRONOUNCEMENT :23.12.2011 O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 05.02.2010 IN RELATION TO THE ASSESSMENT YEAR 2006-2007. 2. THE ONLY GROUND IS AGAINST THE DELETION OF DISAL LOWANCE OF PROFESSIONAL FEES OF ` 13,78,309. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD CLAIMED DED UCTION TOWARDS PROFESSIONAL FEES PAID TO (I) ASK QUALITY CONSULTANCY SERVICES P RIVATE LIMITED ` 3,03,050, (II) AJIT SHAH ` 4,17,567, (III) JAI PRAKASH MEHENDALE ` 99,180 AND (IV) B.B.DCOSTA ` 5,58,512. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE ASSESSEE WAS CALLED UPON TO PROVIDE THE DETAILS AND SUBSTANTIATE THE EXPENDITURE WITH DOCUMENTARY EVIDENCES FOR RECEIVING SERVICES P ROVIDED BY THE ABOVE FOUR PARTIES. THE ASSESSEE FURNISHED COPIES OF INVOICES RAISED BY THESE PARTIES. THE ASSESSING OFFICER OPINED THAT THERE IS A SUSPICION THAT WHETHER THE ASSESSEE HAD RECEIVED ANY SERVICES FROM THESE PARTIES OR NOT . HE, THEREFORE, DISALLOWED THE ENTIRE PROFESSIONAL FEES OF ` 13,78,309. THE LEARNED CIT(A) GOT CONVINCED WITH THE ASSESSEES SUBMISSION AND ORDERED FOR THE DELETION OF ADDITION. ITA NO.3138/MUM/2010. M/S.WELSET PLAST EXTRUSIONS PRIVATE LIMITED. 2 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS OBSERVED FROM PARA 3.3 OF THE IMPUGNED ORDER THAT THE ASSESSEE FURNISHED ALL THE DETAILS CALLED FOR BY TH E A.O. DURING THE ASSESSMENT PROCEEDINGS WHICH WERE AGAIN PROVIDED TO THE LEARNE D FIRST APPELLATE AUTHORITY. COMPLETE DETAILS ABOUT THE NATURE OF SERVICES ETC. HAVE BEEN SET OUT IN PARA 3.3 OF THE IMPUGNED ORDER. THE LEARNED CIT(A) REQUIRED THE ASSESSEE TO FURNISH THE REASONS FOR INCREASE IN THE AMOUNT OF PROFESSIONAL FEES IN COMPARISON WITH THAT PAID IN THE PRECEDING YEARS. THE ASSESSEE FURNISHED SUCH REASONS WHICH HAVE BEEN TABULATED IN PARA 3.5 OF THE IMPUGNED ORDER. A PART FROM THAT, THE ASSESSEE PRODUCED CONFIRMATIONS FROM THESE FOUR PARTIES. THE ASSESSEE MADE PAYMENTS THROUGH BANKING CHANNELS AND THE TAX WAS DULY DEDUC TED AT SOURCE FROM SUCH PAYMENTS, WHICH WAS DEPOSITED WITH THE EXCHEQUER. IN OUR CONSIDERED OPINION THERE IS NO BASIS WHATSOEVER ON THE PART OF THE ASS ESSING OFFICER TO REJECT THE ENTIRE CLAIM FOR EXPENSES IN SUCH AN ARBITRARY MANN ER. IF HE HAD ANY SUSPICION IN HIS MIND, HE COULD HAVE VERY WELL CONDUCTED FURT HER INQUIRY ABOUT THE GENUINENESS OF THE EXPENDITURE AS COPIES OF THE REL EVANT INVOICES WERE FURNISHED BEFORE HIM. HAVING NOT DONE SO, IT IS NOT OPEN TO D ISALLOW ANY EXPENDITURE WITHOUT ANY REASONABLE BASIS. IN OUR CONSIDERED OPI NION THE LEARNED CIT(A) WAS JUSTIFIED IN ORDERING FOR THE DELETION OF ADDITION. WE UPHOLD THE SAME. 4. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 23 RD DAY OF DECEMBER, 2011. SD/- SD/- (D.K.AGARWAL) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 23 RD DECEMBER, 2011. DEVDAS* SD/- (R.K.PANDA) AM (NOMINATED) ITA NO.3138/MUM/2010. M/S.WELSET PLAST EXTRUSIONS PRIVATE LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A)-XVIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.