DCIT, New Delhi V. M/s. Maruti Insurance Distribution Service Ltd., New Delhi

ITA 5194/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3803 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 18-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Assessee Lawyers: ROHIT JAIN CA MS TEJASWI JAIN
• Keywords: Wholly owned subsidiary

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 5194/DEL/2015 (ASSESSMENT YEAR: 2006 - 07 ) DCIT, CIRCLE - 16(1), ROOM NO. 312, CR BUILDING. IP ESTATE, NEW DELHI VS. MARUTI INSURANCE DISTRIBUTION SERVICE LTD, (NOW MERGED WITH MARUTI SUZUKI INDIA LIMITED ) PLOT NO. 1, NELSON MANDELA ROAD, VASANT KUNJ, NEW DELHI PAN:AADCM3497P (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHRAVAN GOTRU, SR. DR ASSESSEE BY: SHRI ROHIT JAIN, CA MS TEJASWI JAIN, CA DATE OF HEARING 24/08 / 2017 DATE OF PRONOUNCEMENT 26 / 1 0 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT ( A) - 6, NEW DELHI DATED 27.05.2015 FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LC CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 8998913/ - MADE ON ACCOUNT OF EXCESSIVE PAYMENT OF REMUNERATION TO DEALERS. 2. THAT THE ORDER OF THE LD CIT(A) IS ERRONEOUS AND IS NOT TE NABLE ON FACTS AND IN LAW. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF VEHICLE INSURANCE AS CORPORATE INSURANCE AGENT OF INSURANCE COMPANY. IT CONDUCTS ITS BUSINESS THROUGH THE EXTENSIVE MARUTI DEALER NETWORK CONSIST ING OF OVER 300 SALES OUTLETS AND 400 DEALER WORKSHOPS SPREAD ALL OVER THE COUNTRY. THE ASSESSEE IS 100% WHOLLY OWNED SUBSIDIARY OF MARUTI SUZUKI INDIA LTD AND HAS TIED UP WITH NATIONAL INSURANCE COMPANY LIMITED AS THEY ARE LICENSED CORPORATE INSURANCE AGE NT AND IS ACTIVELY INVOLVED IN INSURANCE BUSINESS. PURSUANT TO THE ORDER OF THE HONBLE NATIONAL COMPANY LAW TRIBUNAL DATED 27/06/2017 THIS COMPANY IS MERGED WITH MARUTI SUZUKI INDIA LTD W.E.F. 01/04/2016. PAGE 2 OF 3 4. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FO R RS. 2 662 6206 ON 24/11/2006 AND CONSEQUENTLY THE ASSESSMENT UNDER SECTION 143 (3) WAS PASSED ON 15/12/2008 AT RS. 3 562 5120/ CONSISTING OF DISALLOWANCE OUT OF REMUNERATION TO MIBL BUSINESS ASSOCIATES OF RS. 8 998913/ . THE COMPANY CARRIED THE MATTER B EFORE THE LD. COMMISSIONER OF INCOME TAX APPEALS IX, NEW DELHI, WHO DELETED THE ABOVE ADDITION. BUT ON APPEAL BY THE REVENUE. THE COORDINATE BENCH SET ASIDE THE ORDER OF THE LD. CIT (A) AND RESTORED TO THE ISSUE BACK TO THE FILE OF THE LD. AO FOR FRESH A DJUDICATION. THEREFORE IN VIEW OF THIS, THE PRESENT ASSESSMENT WAS PASSED UNDER SECTION 143 (3) READ WITH SECTION 254 OF THE INCOME TAX ACT, 1961 ON 25/2/2014. THE LD. ASSESSING OFFICER IN THE ABOVE ASSESSMENT ORDER ALSO REPEATED THE SIMILAR DISALLOWANCE O F IDENTICAL SUM. 5. AGGRIEVED BY THE ORDER OF THE LD. ASSESSING OFFICER ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A) WHO WIDE ORDER DATED 27/05/2015 ALLOWED THE APPEAL OF THE ASSESSEE FOR THE REASON THAT THE ORDER OF THE TRIBUNAL, WHICH SET ASIDE THE M ATTER BACK TO THE FILE OF THE ASSESSING OFFICER HAS BEEN REVERSED BY THE HONBLE DELHI HIGH COURT ALLOWING THE APPEAL OF THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT (A) REVENUE PREFERRED APPEAL BEFORE US. 7. THE LD. DEPARTMENTAL REPRESENTATIVE IS RELI ED UPON THE ORDER OF THE LD. ASSESSING OFFICER, WHEREAS THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THAT THE HONBLE DELHI HIGH COURT IN ITA NO. 242 OF 2014 DATED 30/05/2014 HAS RIVERS THE ORDER OF THE COORDINATE BENCH. THEREFORE THIS APPEAL DOES NOT SUSTAIN. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDER OF THE LOWER AUTHORITY AS WELL AS THE ORDER OF THE HONBLE DELHI HIGH COURT DATED 30/05/2014 IN ITA NO. 242 OF 2014. THE HONBLE DELHI HIGH COURT. WIDE THAT ORDER HAS RE VERSED THE ORDER OF THE COORDINATE BENCH BY WHICH THE MATTER WAS SET ASIDE TO THE FILE OF THE LD. ASSESSING OFFICER AND THE PRESENT APPEAL HAS ALSO ARISE IN BECAUSE OF THAT. IN VIEW OF THIS FACT, ACCORDING TO ASK THESE APPEAL OF THE REVENUE BECOMES INFRUCT UOUS AND HENCE DISMISSED. 9. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 6 / 1 0 / 2017 . - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 6 / 1 0 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT PAGE 3 OF 3 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI