M/S COHNREZNICK PROFESSIONAL SERVICES PRIVATE LIMITED, CHENNAI V. DCIT CORPORATE WARD 1 (2), CHENNAI

ITA 603/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8190 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 20-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: S VIDYA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , ! ' # ' $ . ! &' , ( ) BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ ITA NO.603/CHNY/2018 ( * +* /ASSESSMENT YEAR: 2013-14 M/S.COHNREZNICK PROFESSIONAL SERVICES PVT. LTD. NO.455, AMARASRI BUILDING, 4 TH & 5 TH FLOOR, OLD NO.313, NEW NO.455, ANNA SALAI, TEYNAMPET, CHENNAI 600 018. VS. DY. COMMISSIONER OF INCOME TAX, CORPORATE WARD-1(2), CHENNAI. [PAN: AADCR 4174N] ( ,- /APPELLANT) ( ./,- /RESPONDENT) ,- 0 1 / APPELLANT BY : MS. S. VIDYA, CA ./,- 0 1 /RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL.CIT ' 0 2 /DATE OF HEARING : 04.02.2019 34+ 0 2 / DATE OF PRONOUNCEMENT : 27.03.2019 5 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -1, CHENNAI (HEREINAFTER CALLED AS CIT(A)) DATED 29.12.2017 F OR THE ASSESSMENT YEAR (AY) 2013-14. 2. THE APPELLANT RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE ORDER OF THE LEARNED ASSESSING OFFICER (AO IN SHORT) IS WITHOUT JURISDICTION, IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE ITA NO.603/CHNY/2018 (AY: 2013-14) :- 2 -: CASE AND IS OPPOSED TO THE PRINCIPLES OF NATURAL JU STICE, EQUITY AND FAIR PLAY. 2. THE LEARNED AO ERRED IN DETERMINING THE TAXABLE INCOME AT RS. 43, 67,907/- UNDER THE NORMAL PROVISIONS OF THE ACT AS AGAINST THE RETURNED INCOME OF RS. 30,15,160/- UNDER THE NORMAL PROVISIONS OF THE ACT. 3. THE LEARNED AO ERRED IN TREATING AN AMOUNT OF RS 13, 52,747/- PERTAINING TO THE AMOUNTS PAYABLE TO ITS PARENT COM PANY AS FOREX GAIN. 4. THE LEARNED AO ERRED IN CHARGING INTEREST U/S 23 4 B AND 234 C OF THE ACT. FOR THESE GROUNDS AND SUCH OTHER GROUNDS THAT MAY B E ADDUCED AT OR BEFORE THE TIME OF HEARING, IT IS HUM BLY PRAYED THAT YOUR GOOD SELVES SHALL BE PLEASED TO, DELETE THE AD DITIONS MADE IN THE ASSESSMENT TO THE EXTENT OF THE ISSUES THAT ARE UNDER APPEAL, OR, PASS SUCH OTHER ORDERS AS MAY DEEM FIT AND APPROPRI ATE AND RENDER JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSIN ESS OF PROVIDING BACK OFFICE SERVICES, ACCOUNTING TO ITS APPELLANT COMPAN Y. THE RETURN OF INCOME FOR THE AY 2013-14 WAS FILED ON 10.09.2013 D ISCLOSING TOTAL INCOME OF RS. 30,15,160/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DY. CIT, CORPORATE CIRCLE-I(2), CHENNAI VIDE ORDER DATED 30.09.2015 AT TOTAL INCOME OF RS. 43,87,130/-. WHILE DOING SO, THE AO MADE ADDITION ON ACCOUNT OF FOREIGN EXCHANGE GAIN OF RS. 13,52,747/- AND THE PAYMENT MADE TO ESI ON ACCOUNT OF DELETED PAYMENT. ITA NO.603/CHNY/2018 (AY: 2013-14) :- 3 -: 4. BEING AGGRIEVED BY THE ABOVE ADDITIONS, AN APPEA L WAS PREFERRED BEFORE LD. CIT(A) CONTENDING THAT THE ADDITION DOES NOT REPRESENT GAIN ON FOREIGN EXCHANGE FLUCTUATION BUT REPRESENTS THE AMO UNT RECEIVED FROM THE APPELLANT COMPANY BASED ON THE BUDGET AS THE AP PELLANT WAS COMPENSATED BY THE APPELLANT COMPANY ON COST PLUS M ODEL. BUT, THE LD. CIT(A) HAD NOT ACCEPTED THE ABOVE CONTENTION. HOWE VER, GRANTED RELIEF IN RESPECT OF ADDITION OF DELETED PAYMENT OF ESI CO NTRIBUTION. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. THE LD. AR REITERATED THE SAME SUBMISSIONS AS MADE BEFO RE THE LD. CIT(A). 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 6. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION WHE THER OR NOT THE AMOUNT RECEIVED FROM PARENT COMPANY CONSTITUTES INC OME IN THE HANDS OF THE APPELLANT. IT IS NOT THE CASE OF THE APPELL ANT THE SERVICES ARE NOT RENDERED IN RESPECT OF THE MONEY RECEIVED THEREFORE , WHATEVER AMOUNT RECEIVED FROM THE COMPANY, I.E., CUSTOMER CONSTITUT ES THE INCOME IN THE HANDS OF THE APPELLANT, AS IT FORM PART TRADING REC EIPT IN THE LIGHT OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CHOWRINGHEE SALES BUREAU (P.) LTD. V. CIT [1973] 87 ITR 542 (SC) AND SINCLAIR MURRAY & CO. P. LTD. V. CIT [1974] 97 ITR 615 (SC) THEREFORE, THE AO RIGHTLY BROUGHT THIS AMOUNT TO TAX IN THE HANDS OF THE APPE LLANT, WE DO NOT FIND ITA NO.603/CHNY/2018 (AY: 2013-14) :- 4 -: ANY MERIT IN THE APPEAL FILED BY THE ASSESSEE. HEN CE, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED ON THE 27 TH DAY OF MARCH, 2019 IN CHENNAI. SD/- SD/- ( . ) (DUVVURU RL REDDY) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER /CHENNAI, 6 /DATED: 27 TH MARCH, 2019. EDN, SR. P.S 5 0 .(278 98+2 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. ' :2 ( )/CIT(A) 4. ' :2 /CIT 5. 8;< .(2( /DR 6. <'* = /GF