ACIT 9(1), MUMBAI V. AHUJA PLATINUM PROPERTIES P.LTD, MUMBAI

ITA 4384/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75536 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: REEPAL TRALSHAWALA
• Keywords: Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 4384 /M/1 2 ASSESSMENT YEAR: 200 9 - 20 10. D CIT RG.9(1), ROOM NO. 223, AAYAKAR BHAVAN, M.K. ROAD, MU MBAI 20 VS. M/S AHUJA PLATINUM PROPERTIES P VT . LTD., A/1, RAIPIPLA, LINKING R OAD, SANTACRUZ (W) MUMBAI 400 05 4 PAN : AA B CA4138L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI REEPAL TRALSHAWALA RE VENUE BY : SHRI M.L. PERUMAL DATE OF HEARING : 22.0 1. 2014. DATE OF PRONOUNCEMENT : 12.02.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 16.0 4 . 2012 RELEVANT TO ASSESSMENT YEAR 200 9 - 10 . THROUGH ITS SOLE GROUND OF APPEAL, THE REVENUE HAS CONTESTED DELETION OF THE DISALLOWANCE BY THE CIT(A) OF RS.5861147/ - WHICH WAS MADE BY THE AO U/S 40A(2)(B) OF THE INCOME TAX ACT RELATING TO THE SHARING OF COMMON POOL EXPENSE S. 2. THE ASSESSEE CLAIMED RS.1, 95,37,158/ - BY WAY OF DEBIT TO ITS PROFIT AND LOSS ACCOUNT TOWARD REIMBURSEMENT OF ADMINISTRATIVE/CONSULTANCY CHARGES TO THE GROUP CONCERN M/S AHUJA RESOURCE MANAGEMENT SERVICES. THE A.O. OBSERVED THAT THE ASSESSEE HAD FAI LED TO EXHIBIT THE BASIS OF THE ALLOTMENT OF THE EXPENDITURE STATED TO BE INCURRED FOR THE GROUP CONCERN . FURTHER, THE ASSESSE COMPANY COULD NOT SHOW THAT THE SAID GROUP CONCERN WAS EQUIPPED WITH ANY ITA NO. 4384 /M/1 2 M/S AHUJA PLATINUM PROPERTIES PVT. LTD. 2 PARTICULAR SKILL OR A HIGHER CALIBRE IN THE RELEVANT ARE A, I.E., VIS - - VIS THE ASSESSEE - COMPANY. THE COMMERCIAL EXPEDIENCY OF THE EXPENDITURE WAS ALSO NOT PRODUCED. HE, ACCORDINGLY, DISALLOWED A SUM OF RS.5861147/ - BEING 30% OF THE EXPENDITURE SO CLAIMED. 3. THE LD. CIT(A) ALLOWED THE ASSESSEE'S CLAIM RELYING ON THE DECISION BY HIS PREDEC ESSOR FOR A.YS. 2003 - 04 AND 2007 - 0 8 AND FURTHER ON THE DECISION OF ITAT FOR A.Y. 2003 - 04 (ITA NO. 4558/M/2007 VIDE ORDER DATED 24.6.2011) AND THUS DELETED THE DISALLOWANCE SO MADE BY THE A.O. 4 . WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. AS OBSERVED BY THE CIT(A), T HE IDENTICAL ISSUE CAME INTO CONSIDERATION BEFORE THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR A.Y.2003 - 04. THE TRIBUNAL UPHELD THE ORDER OF THE FIRST APPELLATE AUTHORITY OBSERVING THAT GROU P CONCERNS HAD ENTERED INTO MOU FOR CREATION OF COMMON POOL COMPANY TO FUNCTION ON NO PROFIT NO LOSS BASIS IN PROVIDING ADMINISTRATIVE AND MANAGERIAL REQUIREMENTS OF THE CONSTITUENT MEMBERS. THE AMOUNT WAS TO BE REIMBURSED IN PROPORTION TO THE COST OF CONS TRUCTION INCURRED BY EACH OF THE CONSTITUENT MEMBER. THE PAYMENT MADE BY THE ASSESSEE AND THE CONSTITUENT MEMBERS WAS JUST THE REIMBURSEMENT OF ACTUAL EXPENSES INCURRED. UNDER SUCH CIRCUMSTANCES, IT COULD NOT BE SAID THAT THE PAYMENT WAS NOT MADE FOR THE P URPOSE OF BUSINESS OR WAS EXCESSIVE OR UNREASONABLE. 5. THE DECISION OF THE TRIBUNAL FOR A.Y. 2003 - 04 HAS BEEN FOLLOWED BY THE CO - ORDINATE BENCHES OF THE TRIBUNAL FOR A.Y. 2005 - 06 ( ITA NO. 7153/M/2010, A.Y. 2007 - 08 (ITA NO. 2953/M/2011) BOTH DECIDED VID E COMMON ORDER DATED 30.10.2013, AND ALSO FOR A.Y. 2006 - 07 (ITA NO. 2590/M/2009 ) VIDE ORDER DATED 28.7.2011. THE FAC TS AND CIRCUMSTANCES OF CASE FOR THIS YEAR ALSO REMAINS ITA NO. 4384 /M/1 2 M/S AHUJA PLATINUM PROPERTIES PVT. LTD. 3 IDENTICAL . UNDER THE CIRCUMSTANCES, WE, THEREFORE, FIND NO REASON TO TAKE ANY DIFF ERENT VIEW OF THE MATTER AND, ACCORDINGLY, UPHOLD THE ORDER OF THE CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF FEBRUARY, 2014. SD/ - SD/ - (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 12 .02.2014 PKM COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR A BENCH //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI.