Corbus (India) Private Ltd., New Delhi V. ACIT, New Delhi

ITA 3603/DEL/2011

• Counselvise Citation: 360320114 RSA 2011
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 21-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K MITTAL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH B DELHI ] BEFORE SHRI RAJPAL YADAV, JM AND SHRI K. D. RAN JAN, AM I. T. APPEAL NO. 3603 (DEL) OF 2011. ASSESSMENT YEAR : 2005-06. CORBUS (INDIA) PRIVATE LTD., DY. COMMISSION ER OF INCOME-TAX, 164 K A I L A S H H I L L S, VS. CIR CLE : 3 (1), N E W D E L H I 110 065. N E W D E L H I. PAN / GIR NO. AAA CM 2026 P. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI S. K. MITTAL, C. A.; DEPARTMENT BY : SHRI ROHIT GARG, SR. D. R. O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 05-06 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS)IV, NEW DELHI. THE GROUND OF APPE AL RAISED BY THE ASSESSEE IS REPRODUCED AS UNDER :- THAT THE LD. CIT (APPEALS) HAS ERRED BOTH IN FACT AND IN LAW IN REJECTING THE GROUND OF THE APPELLANT ON DISALLOWANCE OF LEGA L & PROFESSIONAL EXPENSES OF RS.2,91,845/- BEING 50 PER CENT OF EXPENDITURE U NDER THIS HEAD. 2.. THE ONLY ISSUE FOR CONSIDERATION RELATES TO CON FIRMING THE DISALLOWANCE OF RS.2,91,845/- ON ACCOUNT OF LEGAL AND PROFESSIONAL EXPENSES. THE ASSESSEE CLAIMED LEGAL AND PROFESSIONAL EXPENSES OF RS.5,83,691/-. THE ASSESSING OFFICER R EQUIRED THE ASSESSEE TO PRODUCE DETAILS ALONG 2 I. T. APPEAL NO. 3603 (DEL) OF 2011. WITH JUSTIFICATION OF THOSE EXPENSES. SINCE NO REPL Y WAS RECEIVED FROM THE ASSESSEE THE ASSESSING OFFICER DISALLOWED 50 PER CENT OF RS.5,83,691/- BEI NG RS.2,91,845/-. 3. ON APPEAL IT WAS SUBMITTED THAT THE ASSESSING OF FICER DID NOT MAKE ANY REQUISITION OF DETAILS OF EXPENDITURE ON 28/10/2008. THE LIST OF EXPENSES WAS GIVEN AS A PART OF PAPER BOOK. THEREFORE, THE ASSESSING OFFICER SHOULD NOT HAVE DI SALLOWED THE AMOUNT. THE LD. CIT (APPEALS) OBTAINED THE COMMENTS OF THE ASSESSING OFFICER. TH E ASSESSING OFFICER REPORTED THAT NO BILLS/VOUCHERS WERE FILED BY THE ASSESSEE TO SUBSTA NTIATE ITS CLAIM. THE LD. CIT (APPEALS) ON CONSIDERATION OF ARGUMENTS OF THE ASSESSEE AND FACT S OF THE CASE OBSERVED THAT THE REFERENCE TO THE ASSESSING OFFICER WAS MADE BY HIM UNDER RULE 46A(1) NOT UNDER SECTION 46-A(4) READ WITH SECTION 250(4) OF THE ACT. THEREFORE, THE AO WAS N OT COMPETENT TO ASK FOR FRESH EVIDENCES. HE WAS ONLY COMPETENT TO GIVE HIS COMMENTS ON THE ADDI TIONAL EVIDENCE FILED. THE ASSESSING OFFICER HAD OFFERED HIS COMMENTS AND HAD RIGHTLY STATED THA T THE BILLS AND VOUCHERS WERE NOT PRODUCED. THEREFORE, THE ASSESSEE COULD NOT TAKE THE PLEA THA T NO OPPORTUNITY WAS TO PRODUCE THE EVIDENCE. THE LD. CIT (APPEALS) RELYING ON DECISION OF HONBL E DELHI HIGH COURT IN THE CASE OF CIT VS. MOTOR GENERAL FINANCE LTD. [2002] 254 ITR 449 (DEL. ) HELD THAT FAILURE OF THE ASSESSEE TO PRODUCE DOCUMENTS DURING THE COURSE OF HEARING CAN LEAD TO AN ADVERSE INFERENCE TO THE EFFECT THAT IF PRODUCED THEY WOULD HAVE GONE AGAINST THE A SSESSEE IN TERMS OF SECTION 114 OF THE EVIDENCE ACT, 1872. THE LD. CIT (APPEALS) THEREFOR E, UPHELD THE DISALLOWANCE. 4. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT BILLS AND VOUCHERS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER AS THE SAME WERE NOT A SKED BY HIM. BEFORE THE LD. CIT (APPEALS) BILLS AND VOUCHERS WERE PRODUCED. THE LD. AR OF TH E ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE HAD INCURRED EXPENDITURE ON LEGAL AND PROFESSIONAL CHARGES AND THESE EXPENSES ARE SUPPORTED BY VOUCHERS. THEREFORE, NO DISALLOWANCE COULD HAVE BE EN MADE BY THE ASSESSING OFFICER. THE LD. CIT (APPEALS) HAD NOT TAKEN COGNIZANCE OF THE BILLS AND VOUCHERS PRODUCED BEFORE HIM. HE, THEREFORE, SUBMITTED THAT THE MATTER MAY BE SET ASI DE TO THE FILE OF THE ASSESSING OFFICER FOR RE- ADJUDICATION OF THE ISSUE. ON THE OTHER HAND, THE LD. SR. DR SUPPORTED THE ORDER OF THE LD. CIT (APPEALS). 3 I. T. APPEAL NO. 3603 (DEL) OF 2011. 5. WE HAVE HEARD BOTH THE PARTIES. WE HAVE GONE TH ROUGH THE BILLS AND VOUCHERS RAISED BY DIFFERENT PROFESSIONALS. THESE BILLS AND VOUCHERS WERE PRODUCED BEFORE THE LD. CIT (APPEALS) BUT THE SAME HAVE NOT BEEN CONSIDERED ON THE GROUND THA T ASSESSEE FAILED TO PRODUCE THE SAME BEFORE THE ASSESSING OFFICER. IN VIEW OF ABOVE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSIN G OFFICER WITH THE DIRECTION TO EXAMINE THE CASE OF THE ASSESSEE IN THE LIGHT OF BILLS AND VOUCHERS PRODUCED BEFORE THE LD. CIT (A) AND DECIDE WHETHER THE EXPENDITURE CLAIMED BY THE ASSESSEE IN RESPECT OF LEGAL AND PROFESSIONAL CHARGES IS JUSTIFIED OR NOT. THE ASSESSING OFFICER WILL PASS A SPEAKING ORDER AFTER AFFORDING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED, FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 23 RD SEPTEMBER, 2011. [ RAJPAL YADAV ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD SEPTEMBER, 2011 . *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.