CREDIT ANALYSIS AND RESEARCH LTD, MUMBAI V. ADDL CIT RG 6(2), MUMBAI

ITA 4153/MUM/2013

• Counselvise Citation: 415319914 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 23-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI , BEFORE SHRI H. L. KARWA , PRESIDENT & SHRI R.C.SHARMA , A M ( / ITA NO. 4153 /MUM/201 3 ) ( ASSESSMENT YEAR :200 9 - 20 10 ) M/S CREDIT ANALYSIS AND RESEARCH LTD., 4 TH FLOOR, GODREJ COLISEUM SOMAIYA HOSPITAL ROAD, SION(E), MUMBAI - 400 022 VS. ADCIT, RG.6(2), MUMBAI PAN/GIR NO. : A AACC 4587 F ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. TEJAS SODHA /REVENUE BY : MR. PREMANAND J. DATE OF HEARING : 9 TH DEC EMBER 201 4 DATE OF PRONOUNCE MENT : 31 ST DECEMBER, 201 4 O R D E R PER R.C.SHARMA ( A .M.) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), DATED 5 - 2 - 2013 FOR ASSESSMENT YEAR 200 9 - 10 , IN THE MATTER OF ORDER PASSED U/S. 143(3) OF THE IT ACT. 2 . THE FIRST GRIEVANCE OF THE ASSESSEE RELATES TO THE DISALLOW ANCE OF PROVISIONS FOR EXPENSES OF RS. 10,37,000/ - . 3 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS MADE PROVISIONS OF RS. 10.37 LAKHS O N ACCOUNT OF EXPENSES RELATING TO TRAVELLING EXPENSES, ELECTRICITY CHARGES, LOCAL CONVEYANCE, TELEPHONE EXPENSES, MISCELLANEOUS EXPENSES, MOTOR CAR EXPENSES, OFFICE SUPPLY ETC. EVEN ITA NO. 4 153 /201 3 2 THOUGH ASSESSEE HAD ALREADY RECEIVED SERVICES AGAINST THIS OUTSTANDING PA YMENT, BUT SINCE NO BILLS WERE RECEIVED ACTUAL QUANTIFICATION OF THE SAME COULD NOT BE MADE AND, THEREFORE, PROVISIONS WAS MADE. FROM THE RECORD, WE FOUND THAT OUT OF THE PROVISIONS OF RS. 10,37,000/ - IN THE IMMEDIATELY SUBSEQUENT YEAR, THE ASSESSEE HAS ACT UALLY PAID RS. 8, 87,91 6 / - AND BALANCE OF RS. 1,49,084/ - WAS ACCOUNTED FOR ITS INCOME. THIS PROVISIONS SO MADE WAS ON THE BASIS OF ACTUAL CRYSTALLIZATION OF EXPENSES AND, THEREFORE, NO JUSTIFIABLE REASON TO DISALLOW THE SAME. 4 . LEARNED AR ALSO PLACED ON RECO RD THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE, WHEREIN EXACTLY SIMILAR DISALLOWANCE WAS DELETED BY THE TRIBUNAL AFTER HAVING THE FOLLOWING OBSERVATION : - 9. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS. ON PERUSAL OF THE LD. CIT(A)S ORDER WE FIND THAT IN PRINCIPLE LD. FIRST APPELLATE AUTHORITY UPHELD THE CONTENTION OF ASSESSEE WHILE DELETING THE DISALLOWANCE OF MAJOR PROVISION OF EXPENSES WHICH HAVE BEEN OTHERWISE ACTUALLY UTILIZED. THE LD. CIT(A) ONLY UPHELD THE DISALLOWANCE OF EXCESS PROVISION. IT I S TO BE SEEN THAT PROVISION WAS MADE LOOKING TO THE NATURE AND QUAN T IT Y OF EXPENSES ON A BONA FIDE ESTIMATE. HAD THE ASSESSEE WAS HAVING EXACT DETAILS OF EXPENSES THEN IT COULD HAVE QUANTIFIED THE EXPENSES. IT HAS MADE T HE PROVISION BECAUSE IT WAS DIFFICUL T TO QUANTIFY THE EXPENSE WITH SUPPORTING DETAILS. THUS N OUR OPINION THE ASSESS E E MADE THE PROVIS I ON ON A BONA FIDE BELIEF, WHILE SE T TING OFF THE PROVISION WITH THE ACTUAL, CERTAIN AMOUNTS RESULTED TO BE EXCESS. THE MOMENT SUCH EXCESS AMOUNT RESULTED ASSE SSEE HAS RETURNED IT BACK AND OFFERED IT FOR TAXATION. IF THIS A M OUNT IS DISALLOWED HERE THEN IT WILL BE TAXED TWICE, ONCE IN THIS ASSESSMENT YEAR AND AGAIN IN THE YEAR IN WHICH ASSESSEE HAS OFFERED IT. WHE NEVER ANY PROVISION IS MADE FOR THE EXPENSES SOME PLUS AND MINUS IS POSSIBLE BECAUSE PROVISION CANNOT BE MADE WITH EXACTNESS. AS FAR AS THE OTHER ASPECT IS CONCERNED THAT ASSESSEE HAS OFFERED IT FOR THE NEXT YEAR , WE ARE OF THE VIEW THAT AFTER ADJUSTING THE ACCOUNT WHEN ASSESSEE REALIZED THE REAL FACTS IT OFFERED THE EXCESS PROVISION FOR TAXATION IMMEDIATELY IN THE SUBSEQUENT YEAR. THUS, LOOKING INTO THE ENTIRE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT THE DISALLOWANCE OF RS.6,82,626/ - DOES NOT CALL FOR AND WE DELETE THE SAME. ITA NO. 4 153 /201 3 3 5. AS THE FACTS AND CI RCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE EXACTLY SAME, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL VIS - - VIS OUR OBSERVATION MADE HEREINABOVE, WE DO NOT FIND ANY MERIT IN THE ORDER OF THE LOWER AUTHORITIES FOR DISALLOWING ASSESSEES CLAIM O F EXPENSES AT RS. 10,37,000/ - . 6. THE NEXT GROUND RELATES TO DISALLOWANCE U/S.14A, WHICH WAS NOT PRESSED BY LEARNED AR. ACCORDINGLY, THE GROUND NO.2 IS DISMISSED AS NOT PRESSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED I N THE OPEN COURT ON THIS 31 ST DEC. 201 4 . 31 ST DEC. ,2014 SD/ - SD/ - ( ) ( H.L.KARWA ) ( ) ( R.C.SHARMA ) / PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED 31 /12 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//