DCIT, CHENNAI V. N.K.V.Krishna, CHENNAI

ITA 435/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77264 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-04-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 19-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB ADD
• Assessee Lawyers: S DEEPA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI . , , ! ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 435/MDS/2014 / ASSESSMENT YEAR : 2010-11 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-XIII, ROOM NO.608, 6 TH FLOOR, 121, N.H. ROAD, CHENNAI-600 034 ( # /APPELLANT) VS SHRI N.K.V.KRISHNA, 27, CHELLAMAL STREET, SHENOY NAGAR, CHENNAI-600 030 [PAN: AGIPK 3079 R] ( $% # /RESPONDENT) / APPELLANT BY : SHRI SHAJI P.JACOB, ADD.CIT / RESPONDENT BY : MS. S.DEEPA, C.A., / DATE OF HEARING : 17-04-2014 ! / DATE OF PRONOUNCEMENT : 30-04-2014 & / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE REVENUE ASSAILING THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-VI I, CHENNAI DATED 31-10-2013. 2. THE ASSESSEE IS IN THE BUSINESS OF PURCHASE AND SALE OF MUSIC CASSETTES, LAMINATION OF PHOTOGRAPHS, LOCKETS ETC., THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY. 201 0-11 ON 13-10-2010 DECLARING HIS TOTAL INCOME AS ` 1,72,75,190/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTIC E U/S. 143(2) OF ITA. NO. 435/MDS/2014 2 THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE. DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE HAS CLAIMED EXPENSES TO THE TUNE OF ` 1,42,61,935/- ON E-STORE MAINTENANCE. THE ASSESSEE HAS FURTHER CLAIMED BUSIN ESS PROMOTION EXPENSES OF ` 31,17,569/-. THE ASSESSEE COULD NOT PRODUCE INVOICES, VOUCHERS OR ANY OTHER DOCUMENTS I N SUPPORT OF THE EXPENSES CLAIMED. IN THE ABSENCE OF SUPPORTING DOCUMENTS, THE ASSESSING OFFICER DIS-ALLOWED 40% OF E-STORE MA INTENANCE EXPENSES AND 20% OF BUSINESS PROMOTION EXPENSES. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 26-09- 2012, THE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS) BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY.2009-10, ALLOWED THE ENTIRE EXP ENDITURE OF E- STORE MAINTENANCE AND RESTRICTED THE ADDITION MADE ON ACCOUNT OF BUSINESS PROMOTION EXPENSES TO 10%. NOT SATISFIED WITH THE ORDER OF THE CIT(APPEALS), THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI SHAJI P.JACOB, APPEARING ON BEHALF OF THE R EVENUE SUBMITTED THAT THE INVOICES AND VOUCHERS ON THE BAS IS OF WHICH THE ASSESSEE IS CLAIMING EXPENDITURE WERE NEVER PRODUCE D BEFORE THE ITA. NO. 435/MDS/2014 3 ASSESSING OFFICER. THIS FACT HAS BEEN RECORDED BY THE CIT(APPEALS) IN HIS ORDER. SO FAR AS THE ALLOWABIL ITY OF THE EXPENDITURE IS CONCERNED, THERE IS NO DISPUTE. THE ONLY ISSUE IS WHETHER THE ASSESSEE HAS INCURRED EXPENDITURE UNDER THE HEAD IT IS CLAIMING AND TO WHAT EXTENT. THESE QUESTIONS CA N BE ANSWERED ONLY AFTER VERIFICATION OF THE INVOICES AND THE VOU CHERS. 4. ON THE OTHER HAND, MS. DEEPA, APPEARING ON BEHAL F OF THE ASSESSEE SUBMITTED THAT THE EXPENDITURE HAS INDEED BEEN INCURRED ON E-STORE MAINTENANCE AND BUSINESS PROMOTION EXPEN SES. THE ACCOUNTS OF THE ASSESSEE ARE SUBJECT TO AUDIT U/S.4 4AB, THE EXPENSES ARE FULLY SUPPORTED BY THE BILLS AND VOUCH ERS. THE LD.AR PLACED ON RECORD PHOTOCOPIES OF THE INVOICES ON THE BASIS OF WHICH E-STORE MAINTENANCE EXPENSES HAVE BEEN CLAIMED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE RIVAL SIDES. WE HAVE ALSO PERUSED THE ORDERS OF THE AUTHORITIES BEL OW AS WELL AS THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO.1642/MDS/2012 FOR THE AY.2009-10 IN THE CASE OF THE ASSESSEE. IN THE PRESENT CASE, ALLOWABILITY OF THE EXPENDITURE IS NOT IN DISPUTE. THE ONLY ISSUE IS THE QUANTUM OF E XPENDITURE. FROM THE RECORDS, IT IS EVIDENT THAT THE ASSESSEE H AS NOT PRODUCED RELEVANT VOUCHERS AND INVOICES TO SUBSTANTIATE THE SAID ITA. NO. 435/MDS/2014 4 EXPENDITURE. THE AR OF THE ASSESSEE HAS FILED A PA PER BOOK CONTAINING PHOTOCOPIES OF INVOICES IN SUPPORT OF E- STORE MAINTENANCE EXPENDITURE. WE DEEM IT APPROPRIATE TO REMIT THE FILE BACK TO TH E ASSESSING OFFICER TO DECIDE BOTH THESE ISSUES AFRES H AFTER TAKING INTO CONSIDERATION RELEVANT INVOICES, VOUCHERS ETC. , AND ALLOW THE SAME AFTER VERIFICATION. THE ASSESSEE IS ALSO DIRE CTED TO PRODUCE BEFORE ASSESSING OFFICER NECESSARY DOCUMENTS IN SUP PORT OF HIS CLAIM TOWARDS E-STORE MAINTENANCE AND BUSINESS PROM OTION EXPENSE. THE APPEAL OF THE REVENUE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH APRIL, 2014 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ( . ) / ACCOUNTANT MEMBER (VIKAS AWASTHY) ( ) ! / JUDICIAL MEMBER '# /CHENNAI, $% /DATED: 30 TH APRIL, 2014 TNMM %& '()( /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. *+, /CIT(A) 4. * /CIT 5. (-. / /DR 6. .01 /GF