M/s. G.K. Dairy & Milk Products Pvt. Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 3664/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4686 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 05-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHISKEK KUMAR
• Assessee Lawyers: GARVIT BATRA
• Keywords: Business income; TDS
• Section: 40(a)(ia); 201(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI B BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER, AND SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO. 3664 /DEL/201 5 [ASSESSMENT YEAR: 20 11 - 12 ] M/S G.K. DAIRY & MILK PRODUCTS P VT LTD. VS. THE ADDL . C.I.T B - 5, PRAGATI CHAMBERS, RANJIT NAGAR RANGE - 1 2 NEW DELHI NEW DELHI PAN: AAACG 3118 J [APPELLANT] [RESPONDENT] DATE OF HEARING : 1 6 . 0 5 .201 9 DATE OF PRONOUNCEMENT : 1 6 .0 5 .201 9 ASSESSEE BY : SHRI GARVIT BATRA, CA . REVENUE BY : S HRI ABHISKEK KUMAR , SR . DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] - 4 , NEW DELHI DATED 3 1 .0 3 .201 5 PERTA INING TO ASSESSMENT YEAR 20 11 - 12 . 2 2. THE GRIEVANCE RAISED BY THE ASSESSEE IS TWO - FOLD, VIZ, (I) RELATES TO DISALLOWANCE U/S 40(A)(IA) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' ] FOR ALLEGED NON - DEDUCTION OF TDS ON INTEREST PAYMENT TO KOTAK MAHINDRA BANK ; (II) DISALLOWANCE OF RS. 4,61,558/ - MADE BY THE ASSESSING OFFICER FOR PRIOR PERIOD EXPENSES. 3. IN SO FAR AS GROUND NO. 1 IS CONCERNED, T HE LD. AR FURNISHED A CERTIFICATE OF THE ACCOUNTANT UNDER FIRST PROVISO TO SECTION 201(1) OF THE ACT. IT IS THE SAY OF THE LD. AR THAT THE PAYEE, I.E. KOTAK MAHINDRA BANK HAS SHOWN INCOME IN ITS RETURN OF INCOME AND HENCE , AS PER DECISIONS OF VARIOUS HIGH COURTS AND TRIBUNAL, THE DISALLOWANCE SHOULD BE DELETED. 4. WE HAVE GONE THROUGH THE CERTIFICATE OF THE ACCOUNTANT. WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CERTIFICATE AND DECIDE THE I SSUE AS PER THE PROVISIONS OF LAW. GROUND NO. 1 IS ALLOWED FOR STATISTICAL PURPOSES. 3 5. FACTS RELATING TO GROUND NO. 2 ARE THAT DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE AUDITORS OF THE APPELLANT HAVE OB SERVED THAT PRIOR PERIOD EXPENSES AMOUNTING TO RS. 4,61,558/ - HAVE BEEN REPORTED AND NOT DISALLOWED IN THE RETURN OF INCOME . THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE SAME SHOULD NOT BE DISALLOWED. 6. IN ITS REPLY DATED 07.02.2014, THE ASSESSEE CONTENDE D THAT SINCE THE ASSESSEE IS HAVING BUSINESS OPERATIONS FROM SEVERAL PLACES, IT WAS NOT POSSIBLE TO ACCOUNT FOR THE WHOLE EXPENDITURE INCURRED AT ALL BUSINESS PLACES AND PERTAINING TO A PARTICULAR YEAR IN SAID PARTICULAR YEAR. IT WAS ALSO CONTENDED THAT S OMETIMES, THE BILLS WERE NOT RECEIVED FROM EMPLOYEES AT THE END OF THE YEAR REGARDING EXPENDITURE INCURRED BY THEM OR IT MAY BE THE CASE WHERE THE SUPPLIER HAS NOT SENT THE BILL. THEREFORE, SUCH EXPENDITURE SHOULD NOT BE ACCOUNTED FOR IN THE YEAR OF SERVI CE RECEIVED BY THE ASSESSEE COMPANY. 4 7. THE EXPLANATION OF THE ASSESSEE DID NOT FIND ANY FAVOUR WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER WAS OF THE OPINION THAT AS REGARDS THE CLAIM OF EXPENDITURE, THE ONUS IS ON THE ASSESSEE TO ESTABLISH WITH NECESSARY DOCUMENTARY EVIDENCE THAT SUCH EXPENSES HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING BUSINESS INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. ON RECEIVING NO PLAUSIBLE REPLY, THE ASSESSING OFFICER DISALLOWED RS. 4,61,558/ - . 8 . AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. 9 . BEFORE US, THE LD. AR REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES, BUT COULD NOT SUBSTANTIATE HIS CLAIM. 1 0 . PER CONTRA, THE LD. DR STRONGLY SUPPORT ED THE FINDINGS OF THE CIT(A). 1 1 . WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE AUDITORS HAVE QUALIFIED THE REPORT BY OBSERVING THAT PRIOR 5 PERIOD EXPENSES AMOUNTING TO RS. 4,61,558/ - HAS BE EN CHARGED TO THE PROFIT AND LOSS ACCOUNT. EVEN IF THE CONTENTION OF THE ASSESSEE IS TO BE ACCEPTED THAT THE BILLS ARE SOMETIMES RECEIVED AT A LATER DATE, THEN ALSO THE ASSESSEE HAS NOT DEMONSTRATED BY BRIN G ING SUCH BILLS WHICH WERE RECEIVED AFTER THE END OF THE FINANCIAL YEAR , NOR THERE IS ANY EVIDENCE BROUGHT ON RECORD TO SUGGEST THAT THOUGH THE EXPENDITURE RELATED TO EARLIER YEAR, BUT T HE LIABILITY CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION. IN THAT VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OP INION THAT SUCH ADDITION CANNOT BE DELETED. WE, ACCORDINGLY, CONFIRM THE ADDITION OF RS. 4,61,558/ - . GROUND NO. 2 IS DISMISSED. 13 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 3664 /DEL/201 5 IS PARTLY ALLOWED . THE ORDER IS PRON OUNCED IN THE OPEN COURT ON 1 6 . 0 5 .201 9 . S D / - S D / - [ K.N. CHARY ] [N.K. BILLAIYA] J UDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 6 T H MA Y , 2019. VL/ 6 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT ASST. REGISTRAR 4. CIT( A) ITAT, NEW DELHI 5. DR , DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER