ACIT, New Delhi V. M/s. Genpact Mobility Services India Pvt. Ltd., Gurgaon

ITA 6087/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4916 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWETA NAKRA DATTA
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA.NO.6087/DEL./2015 ASSESSMENT YEAR 2010-2011 THE DCIT CIRCLE-10(1) NEW DELHI. VS. M/S. GENPACT MOBILITY SERVICES INDIA PVT. LTD., GENPACT TOWER, SECTOR ROAD, SECTOR-53, PH-V, GURGAON, HARYANA 122 002 PAN AACCG4036D (APPELLANT) (RESPONDENT) FOR REVENUE : MS. SWETA NAKRA DATTA, SR. D.R. FOR ASSESSEE : SHRI TARANDEEP SINGH, ADVOCATE DATE OF HEARING : 29.08.2017 DATE OF PRONOUNCEMENT : 01 .0 9 .2017 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-4, NEW DELHI, DATED 02 ND SEPTEMBER, 2015 FOR A.Y. 2010-2011, CHALLENGING THE ORDER OF THE LD. CI T(A) IN DELETING THE ADDITION OF RS.84,40,328 MADE BY THE A.O. ON AC COUNT OF PRIOR PERIOD EXPENSES. 2 ITA.NO.6087/DEL./2015 M/S. GENPACT MOBILITY SERVICES INDIA PVT. LTD., PH-V, GURGAON, HARYANA 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME OF RS.53,86,908. THE A.O. ASSESSED THE IN COME OF THE ASSESSEE AT RS.1,38,27,240 AFTER MAKING THE ADDITIO N ON ACCOUNT OF PRIOR PERIOD EXPENSES OF RS.84,40,328. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A). THE A.O. HIMSELF QU OTED THE REPLY OF THE ASSESSEE WITH REGARD TO INCOME AND EXPENDITURE OF THE PRIOR PERIOD WHICH IS AS UNDER : DURING THE FINANCIAL YEAR 2009-10, A NET PROFIT IN COME OF RS.2,53,210/- (PRIOR PERIOD INCOME RS.86,93,538/- A ND PRIOR PERIOD EXPENSES RS.84,40,328/-) RELATING TO FINANCI AL YEAR 2008- 09 WAS RECOGNIZED IN THE BOOKS OF ACCOUNTS. SINCE T HE INCOME DID NOT PERTAIN TO THE YEAR UNDER CONSIDERATION THIS AM OUNT WAS APPROPRIATELY ADJUSTED IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11. 3. THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) TH AT PRIOR PERIOD EXPENSES OF RS.84,40,328, COMPRISE OF FOREIG N EXCHANGE LOSS ON PROVISIONS RELATING TO PRIOR YEARS AND EMPLOYEE RELATED INSURANCE EXPENSES RELATING TO PRIOR YEARS. PRIOR PERIOD INCO ME REPRESENTS THE INCOME RECOGNIZED ON ABOVE PRIOR PERIOD EXPENSES. I N FACT, THE PRIOR 3 ITA.NO.6087/DEL./2015 M/S. GENPACT MOBILITY SERVICES INDIA PVT. LTD., PH-V, GURGAON, HARYANA PERIOD INCOME TOTAL OF RS.86,93,538 AND AFTER REDUC ING THE PRIOR PERIOD EXPENSES OF RS.84,40,328, THE ASSESSEE HAD O FFERED THE AMOUNT OF RS.2,53,210 AS NET PRIOR PERIOD INCOME IN THIS YEAR. 3. THE LD. CIT(A) ACCEPTED THE CONTENTION OF ASSES SEE AND FOUND THAT ACTION OF THE A.O. IS ARBITRARY WHILE HE HAS DISALLOWED THE PRIOR PERIOD EXPENSES, HE HAS TAKEN THE INCOME OF P RIOR PERIOD INTO ACCOUNT, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND ACCORDINGLY, DELETED THE ADDITION. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE A.O. IN HIS F INDINGS NOTED THAT THE EXPENSES PERTAIN TO F.Y. 2008-2009 I.E., PRECED ING A.Y. 2009- 2010. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 64 OF THE PAPER BOOK TO SHOW THAT AFTER PROFIT ADJUSTMENT , PRIOR PERIOD (EXPENSES) INCOME OF RS.2,53,210 HAVE BEEN SHOWN IN THE ACCOUNTS OF ASSESSEE WHICH HAVE ALSO BEEN DISCLOSED IN THE C OMPUTATION OF INCOME. PAGE-80 OF THE PAPER BOOK IS SCHEDULE-10 EX PLAINING THE PRIOR PERIOD EXPENSES/INCOME WHICH SHOWS THE ABOVE ADJUSTMENT MADE BY THE ASSESSEE. LEARNED COUNSEL FOR THE ASSES SEE DEMONSTRATED THAT IT WAS NEITHER THE INCOME OR EXPE NSES OF THE YEAR 4 ITA.NO.6087/DEL./2015 M/S. GENPACT MOBILITY SERVICES INDIA PVT. LTD., PH-V, GURGAON, HARYANA UNDER CONSIDERATION WHICH WERE COMING-UP FROM THE E ARLIER YEAR AND ONLY SET-OFF HAS BEEN GIVEN IN THE ASSESSMENT YEAR UNDER APPEAL. LEARNED COUNSEL FOR THE ASSESSEE ALSO EXPLAINED THA T IT WAS NOT PRIOR PERIOD EXPENSES OF THIS YEAR. THEREFORE, THERE IS N O QUESTION OF DISALLOWANCE OF THIS EXPENSES OR MAKING ANY ADDITIO N. NO ERROR HAVE BEEN POINTED OUT IN THE ORDER OF THE LD. CIT(A). WE , THEREFORE, CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 5. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (O.P. KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 01 ST SEPTEMBER, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT E BENCH, DELHI 6. GUARD FILE.