Texas Instruments (India) Private Limited, Bangalore V. Joint Commissioner Of Income Tax, Large Tax Payers Unit, Bngalore

ITA 592/BANG/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0013 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-07-2021
• Assessment Year: 2006-2007
• Appeal Filed On: 26-06-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 40(a)(ia); 22; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER IT A NO. 592/BANG/2020 ASSESSMENT YEAR: 2006 - 07 TEXAS INSTRUMENTS (INDIA) PVT. LTD., BAGMANE TECH PARK, NO.66/3, ADJACENT TO LRDE, BYRASANDRA, C.V. RAMAN NAGAR, BANGALORE 560 093. PAN: AAACT 5445M VS. THE JOINT COMMISSIONER OF INCOME TAX, LTU, BANGALORE. APPELLANT RESPONDENT APPELLANT BY : S HRI SHARATH RAO, CA RESPONDENT BY : MRS. NEER A MALHOTRA, CIT(DR)(ITAT), B E NGALURU. DATE OF HEARING : 22 . 07 .202 1 DATE OF PRONOUNCEMENT : 22 .07 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS) DATED 28.01.2020 OF THE CIT(APPEALS)-2, BENGALURU FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS:- 2. DISALLOWANCE OF AMOUNT CLAIMED UNDER SECTION 40 (A)(I)/ (IA) OF THE ACT 2.1. THE LEARNED CIT(A) AND THE LEARNED AO HAVE ER RED IN LAW AND ON FACTS IN DISALLOWING THE AMOUNT OF INR 5,53, 12,436 ITA NO.592/BANG/2020 PAGE 2 OF 4 UNDER SECTION 40(A)(IA) OF THE ACT, REPRESENTING DE DUCTION CLAIMED IN AY 2006-07 WITH RESPECT TO DISALLOWANCE MADE IN EARLIER ASSESSMENT YEARS ('AY'). 2.2. THE LEARNED CIT(A) AND THE LEARNED AO HAVE ERR ED IN LAW AND ON FACTS IN DISALLOWING THE AMOUNT OF INR 5,53, 12,436 UNDER SECTION 40(A)(I)/(IA) OF THE ACT WITHOUT APPR ECIATING THE FACT THAT THE SAID AMOUNT REPRESENTED REVERSAL OF EXPENSES CREDITED TO PROFIT & LOSS ACCOUNT, WHICH W AS EARLIER DISALLOWED BY THE APPELLANT WHILE FILING TH E RETURN OF INCOME FOR AY 2005 06. THE LEARNED CIT(A) AND THE LEARNED AO ERRED IN NOT APPRECIATING THAT NON-ALLOW ANCE OF THE SAME WOULD LEAD TO DOUBLE TAXATION OF THE SAME AMOUNT IN TWO YEARS. 2.3. NOTWITHSTANDING AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LEARNED CIT(A) ERRED IN DISREGARDING T HE REMAND REPORT FURNISHED BY THE LEARNED AO WHEREIN T HE LEARNED AO, AFTER VERIFICATION OF RECORDS, HAD CATE GORICALLY MENTIONED AN AMOUNT OF INR 4,38,44,566 MAY BE ALLOW ED. 2.4. THE CIT(A) HAS ERRED IN LAW IN DISREGARDING TH E REMAND REPORT FURNISHED BY AO EVEN WHEN NO ADVERSE OPINION WAS FORMED IN RELATION TO THE DETAILS FURNISHED BY THE APPELLANT TO THE EXTENT OF INR 4,38,44,566. 2.5. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED C IT(A) ERRED IN DISALLOWING THE REMAINING AMOUNT OF INR 1,14,67,870 OUT OF THE TOTAL CLAIM OF INR 5,53,12,436, ON BASIS OF LACK OF EVIDENCE EVEN WHEN NO ADVERSE OPINION WAS FORMED BY THE LEARNED AO IN RELATION TO THE DETAILS FURNISHED TO THE EXTENT OF INR 4,38,44,566. 3. THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS. 11,15, 58,254/- AS A DEDUCTION IN AY 2006-07 UNDER SECTION 40(A)(I) OF T HE INCOME-TAX ACT, 1961 [THE ACT] WHICH WAS SUO MOTU DISALLOWED BY THE ASSESSEE ITSELF IN THE AY 2005-06. DURING THE ASSESSMENT PROCEEDINGS THE AO F OUND THAT THE APPELLANT WAS ABLE TO PRODUCE THE EVIDENCE FOR RS. 5,62,45,818/- ONLY, THUS THE BALANCE OF RS. 5,53,12,437/- WAS ADDED TO THE T OTAL INCOME. ITA NO.592/BANG/2020 PAGE 3 OF 4 4. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT CONTENDED THAT THE COMPANY HAS CREATED YEAR END PROVISIONS ON ACCRUAL BASIS FOR WHICH SERVICES WERE UTILIZED BUT INVOICES WERE NOT RECEIV ED TILL THE END OF THE FINANCIAL YEAR, THUS THE SAME WAS REVERSED BUT CLAI MED IN SUBSEQUENT YEAR I.E., YEAR UNDER CONSIDERATION. THE APPELLANT SUBMI TTED COPIES OF SCREENSHOTS (ON SAMPLE BASIS) CAPTURING THE ENTRY P ASSED FOR REVERSAL AND ARGUED THAT THE EVIDENCE OF 80% OF EXPENSES IN THIS MANNER I.E., SCREENSHOTS OF THE ACCRUAL AND REVERSAL, ARE SUBMIT TED. THE APPELLANT ARGUED THAT SINCE THE AMOUNT WAS REVERSED IN EARLIE R YEAR, THE DEDUCTION SHOULD AUTOMATICALLY BE ALLOWED IN THE YEAR IN WHIC H IT IS CLAIMED. THE CIT(APPEALS) WAS OF THE VIEW THAT THERE IS NO DISCR EPANCY IN THE LOGIC BUT THE EXPENSES NEED TO BE EXAMINED TO ASCERTAIN THEIR AUTHENTICITY AND GENUINENESS WHICH THE APPELLANT HAS FAILED TO PROVE . THE AO HAS ALLOWED ALL THE EXPENSES FOR WHICH THE EVIDENCES WERE PRODU CED TO THE EXTENT OF RS. 5,52,43 318, OUT OF THE TOTAL CLAIM OF RS. 11,1 5,58.254. THE ASSESSEE FURTHER SUBMITTED THAT SINCE THE MATTER IS VERY OLD IT WAS DIFFICULT TO PRODUCE THE SAME AND SINCE A MAJOR PORTION OF THE EXPENSES ARE BACKED WITH SUPPORTING DOCUMENTS, THE BALANCE MAY ALSO BE ALLOW ED. THE CIT(APPEALS) OBSERVED THAT THIS PLEA WAS NOT TENABL E AS THE MATTER WAS BROUGHT TO ASSESSEES KNOWLEDGE VIDE ORDER U/S. 143 (3) R.W.S. 263 DATED 30.3.2015 BUT THE ASSESSEE FAILED TO PRODUCE FURTHE R EVIDENCE. THEREFORE, HE CONFIRMED THE ORDER OF THE AO. AGAINST THIS, TH E ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. AS SEEN FROM THE ORDER OF CIT(APPEALS), THE ASSESSE E HAS NOT PRODUCED THE REQUISITE DETAILS BEFORE THE CIT(APPEALS) AND A LSO EXPRESSED INABILITY TO PRODUCE FURTHER EVIDENCE. BEFORE US, THE LD. AR SU BMITTED THAT THE AO IN HIS REMAND REPORT ACCEPTED THE ASSESSEES CLAIM OF RS.4,38,44,566 WHICH WAS PRODUCED DURING THE COURSE OF REMAND PROCEEDING S AND ATLEAST TO THAT ITA NO.592/BANG/2020 PAGE 4 OF 4 EXTENT IT MAY BE ALLOWED. HOWEVER, IN OUR OPINION, THIS REMAND REPORT HAS NOT BEEN CONSIDERED BY THE CIT(APPEALS) WHILE ADJUD ICATING THE ISSUE. THEREFORE, IT WOULD BE APPROPRIATE TO REMIT THE ENT IRE ISSUE IN DISPUTE TO THE CIT(APPEALS) FOR FRESH CONSIDERATION. ACCORDINGLY, THE ISSUE IS REMITTED BACK TO THE CIT(APPEALS) TO CONSIDER THE EVIDENCE A ND THE REMAND REPORT OF THE AO AND DECIDE THE ISSUE AFRESH, AFTER PROVID ING OPPORTUNING OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JULY, 2021. SD/- SD/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 22 ND JULY, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.