M/S COMPUTER SOCIETY OF INDIA, MUMBAI V. INCOME TAX OFFICER (EXEMPTIONS)-1(2), MUMBAI

ITA 4138/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5086 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 11-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Opportunity of being heard; Non passing of speaking order
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO . 4138 / MUM . /2018 ( ASSESSMENT YEAR : 20 1 3 1 4 ) COMPUTER SOCIETY OF INDIA SAMRUDDHI VENTURE PARK UNIT NO.3, 4 TH FLOOR, MIDC ANDHERI (E), MUMBAI 400 093 PAN AAATC1710F . APPELLANT V/S INCOME TAX OFFICER (EXEMP.) WARD 1( 2 ), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI CHAITANYA ANJARIA DATE OF HEARING 19 .0 8 .2019 DATE OF ORDER 06.11.2019 O R D E R THIS IS IN APPEAL BY THE ASSESSEE WHEREIN THE ASSESSEE IS AGGRIEVED THAT THE LEARNED CIT (A) 3, MUMBAI, VIDE ORDER DATED 19 TH MARCH 2018, PERTAINING ASSESSMENT YEAR 2013 - 14 , HAS UPHELD THE ACTION OF THE ASSESSING OFFICER IN DENYING EXEMPTION UNDER SECTION 11 OF THE INCOME T AX ACT, 1961 (FOR SHORT 'THE ACT' ) ON ACCOUNT OF THE FOLLOWING : 2 COMPUTER SOCIETY OF INDIA PRIOR PERIOD EXPENSES ` 5,55,920 AMOUNT TRANSFERRED TO EARMARKED FUNDS ` 38,43,327 LOSS ON SALE OF FIXED ASSETS ` 1,238 RECEIVABLES WRITTEN OFF ` 89,500 2. WITHOUT PREJUDICE, THE ASSESSEE HAS ALSO CONTENDED THAT WHILE UPHOLDING THE DENIAL OF EXEMPTION ON THE ISSUE OF PRIOR PERIOD EXPENSES, THE LEARNED CIT(A) HAS ERRED IN IGNORING THE FACT THAT THERE IS ALSO PRIOR PERIOD INCOME OF 4,89,023, AND, HENCE, THE N ET PRIOR PERIOD EXPENDITURE WAS ` 66,897 . 3. B RIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER, INTER ALIA , MADE THE DISALLOWANCES AS MENTIONED IN THE AFORESAID GROUNDS OF APPEAL . B Y A LACONIC AND NON SPEAKING ORDER , T HE LEARNED CIT (A) UPHELD THE SAME BY HOLDING AS UNDER : I HAVE CONSIDERED THE APPELLANT SUBMISSION. I AGREE WITH THE AOS CONTENTION THAT EXPENSES RELATED TO PRIOR PERIOD CANNOT BE BOOKED IN THE CURRENT YEAR. THE APPELLANT S RELIANCE ON THE CASE CITED BY THE AR IS MISPLACED BECAUSE IN THOSE CASES THE HONBLE C OURT HAS HELD THAT EXCESS OF EXPENDITURE BOOKED IN A PARTICULAR YEAR CAN BE CARRIED FORWARD AND CAN BE TREATED AS APPLICATION OF INCOME OF SUCH SUBSEQUENT YEAR. BUT IN THIS CASE, THE APPELLANT DID NOT BOOK THE EXPENSES IN THE PREVIOUS YEAR IN WHICH THEY WERE INCURRED. THEREFORE , THE FACTS OF THIS CASE ARE DIFFERENT FROM THE FACTS OF THE CASES CITED BY THE APPELLANT. I THEREFORE I HOLD THAT PRIOR PERIOD EXPENSES IS NOT AL LOWABLE. AGAINST THIS ORDER , THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 3 COMPUTER SOCIETY OF INDIA 4. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE . NONE APPEARED ON BEHALF OF THE ASSESSEE . FROM THE ABOVE , IT IS APPARENT THAT LEARNED CIT(A) HAS NOT ADJUDICATED THE ISSUES RAISED PROPERLY. IN FACT , HE HAS NOT CONSIDERED ANY ISSUE OTHER THAN PRIOR PERIOD EXPENDITURE. EVEN WHILE CONSIDERING THE PRIOR PERIOD EXPENDITURE , HE HAS IGNORED THE ASSESSEE S SUBMISSION THAT THE PRIOR PERIOD INCOME WAS TO B E CONSIDERED AGAINST THE PRIOR PERIOD EXPENDITURE . MOREOVER, THE LEARNED CIT(A) HAS MENTIONED THAT CASE LAWS RELIED UPON BY THE ASSESSEES C OUNSEL ARE NOT APPLICABLE WITHOUT EVEN MENTIONING THE NAME OF THE CASE LAWS. ACCORDINGLY , I REMIT THE ISSUES RAISED TO THE FILE OF THE LEARNED CIT(A) AND DIRECT HIM TO CONSIDER THE ISSUE AFRESH AND PASS A DETAILED SPEAKING ORDER AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD . 5. IN THE RESULT , ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 06.11.2019 SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER MUMBAI, DATED: 06.11.2019 4 COMPUTER SOCIETY OF INDIA COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI