DCIT, CHENNAI V. Sundaram Asset Management Co. Ltd., CHENNAI

ITA 354/CHNY/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9030 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARATHI KRISHNAPRASAD
• Assessee Lawyers: A SUNDARARAJAN
• Keywords: Tax effect
• Section: 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO .338 /CHNY/ 201 8 / ASSESSMENT YEAR: 20 05 - 06 M/S. SUNDARAM ASSET MANAGEMENT COMPANY LIMITED, [FORMERLY SUNDARAM B NP PARIBAS ASSET MANAGEMENT CO., LTD.,] SUNDARAM TOWERS, II FLOOR, NO.46, WHITES ROAD, CHENNAI 600 0 34. [PAN: A AICS 4257J ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX LARGE TAX PAYER UNIT - 1, AAYAKAR BHAWAN, NO.121, MAHATMA GANDHI ROAD, CHENNAI 600 0 34 ( /APPELLANT) ( /RESPONDENT) ./ ITA NO.3 54 /CHNY/2018 / ASSESSMENT YEAR: 2005 - 06 THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAX PAYER UNIT - 1, AAYAKAR BHAWAN, NO.121, MAHATMA GANDHI ROAD, CHENNAI 600 034 VS. M/S. SUNDARAM ASSET MANAGEMENT COMPANY LIMITED, PARRY HOUSE, VI FLOOR, NO.43, MOORE STREET, CHENNAI 600 001. [PAN: AAICS 4257J] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MS. BHARATHI KRISHNAPRASAD, CA /RESPONDENT BY : MR. A. SUNDARARAJAN, ADDL.CIT / DATE OF HEARING : 02.01.2020 / DATE OF PRONOUNCEMENT : 02.01.2020 I TA NO.338 / CHNY / 201 8 & ITA. NO.354/CHNY/2018 : - 2 - : / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO.338/CHNY/2018 IS AN A PPEAL FILED BY THE ASSESSEE AND ITA NO.354/CHNY/2018 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 1 7 , CHENNAI I N ITA NO. 2 1 / 2010 - 11/LTU(A) - 17 DATED 02 . 11 .201 7 FOR THE ASSESSMENT YEAR 20 05 - 06 . 2. MS . BHARATHI KRISHNAPRASAD, CHARTERED ACCOUNTANT REPRESENTED ON BEHALF OF THE ASSESSEE AND MR. A. SUNDARARAJAN, ADD ITIONAL CIT REPRE SENTED ON BEHALF OF THE R EVENUE . 3 . AT THE TIME OF HEARING, IT WAS FAIRLY AGREED THAT THE APPEAL OF THE REVENUE IN ITA NO.354 /CHNY/2018 WAS BELOW THE TAX EFFECT. CONSEQUENTLY, THE APPEAL FILED BY THE REVENUE IS DISMISSED ON ACCOUNT OF L OW TAX EFFECT. 4. IN RESPECT OF THE ASSESSEES APPEAL IN ITA NO.338/CHNY/2018, IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT S HE DID NOT WANT TO PRESS GROUND NOS. 1, 2 AND 3 IN RESPECT OF THE ISSUE OF REOPENING AND GROUND NO.5 WHICH WAS THE ALTERNATIVE PRAYER IN RESPECT OF THE CLAIM OF DEDUCTION REPRESENTING THE INCENTIVES PAID TO THE I TA NO.338 / CHNY / 201 8 & ITA. NO.354/CHNY/2018 : - 3 - : EMPLOYEES. CONSEQUENTLY, GROUND NOS. 1, 2 3 AND 5 OF THE ASSESSEES APPEA L STANDS DISMISSED AS WITHDRAWN. THE LEARNED AUTHORIZED REPRESENTATIVE HAS MADE ENDORSEMENT TO THIS EFFECT. IN RESPECT OF GROUND NO.4, IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ISSUE WAS AGAINST THE A CTION OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF THE EXPENDITURE OF RS.30,80,000/ - REPRESENTING THE INCENTIVES PAID TO THE EMPLOYEES BY CONSIDERING THE SAME AS PRIOR PERIOD EXPENDITURE. IT WAS A SUBMISSION THAT THE SAID EXPENDITURE WAS THE AC TUAL INCENTIVE PAID TO THE EMPLOYEES DURING THE RELEVANT A SSESSMENT Y EAR. IT WAS A SUBMISSION THAT THIS WAS PERFORMANCE INCENTIVES WHICH HAD BEEN PAID DURING THE RELEVANT ASSESSMENT YEAR. IT WAS A PRAYER THAT THE SAID EXPENDITURE MAY BE DIRECTED TO BE AL LOWED AS THE SAME ARE NOT PRIOR PERIOD EXPENDITURE. 5. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT HE HAD NO OBJECTION IF THE ISSUE WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINATION AS TO WHETHER THE SAID AMOUNTS HAVE BEEN PAID DURING THE YEAR. IT WAS A SUBMISSION THAT IF THE AMOUNTS HAVE BEEN PAID DURING THE YEAR, HE HAD NO OBJECTION IF THE SAME WAS ALLOWED TO THE ASSESSEE SUBJECT TO VERIFICATION. I TA NO.338 / CHNY / 201 8 & ITA. NO.354/CHNY/2018 : - 4 - : 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. 7. IT HAS BEEN CLAIMED BY THE ASSESSEE THAT THE SAID EXPENDITURE REPRESENTING THE PERFORMANCE INCENTIVES TO THE EMPLOYEES ARE NOT PRIOR PERIOD EXPENDITURE. IT HAS ALSO BEEN CLAIMED BY THE ASSESSEE THAT THE SAID EXPENDITURE HAS BEEN PAID DURING THE YEAR. THIS BEING SO, IN THE INTEREST OF JUSTICE, THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AS TO WHETHER THE SAID AMOUNTS IN THE FORM OF PERFORMANCE INCEN TIVES HAVE BEEN PAID TO THE EMPLOYEES DURING THE RELEVANT ASSESSMENT YEAR. IF THE AMOUNTS HAVE BEEN PAID DURING THE RELEVANT ASSESSMENT YEAR, THEN THE SAME IS LIABLE TO BE ALLOWED. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.338/CHNY/2018 IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IN ITA NO.354/CHNY/2018 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JANUARY , 20 20 IN CHENNAI. SD/ - ( ) (INTURI RAMA RAO) / ACCOUNTANT MEMBER / CHENNAI, / DATED: 2 ND JANUARY , 2 020 IA, SR. PS SD/ - ( ) (GEORGE MATHAN) /JUDICIAL MEMBER / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF I TA NO.338 / CHNY / 201 8 & ITA. NO.354/CHNY/2018 : - 5 - :