ACIT 18)(1), MUMBAI V. CHOUDHARY EXPORTS, MUMBAI

ITA 6195/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55813 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 13-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Keywords: Business expenditure
• Section: 10(10D)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 6195/MUM/2010 (ASSESSMENT YEAR: 2007-08) A C I T - 18(1) M/S. CHOUDHARY EXPORTS 1ST FLOOR, PIRAMAL CHAMBERS A-BLOCK (BASEMENT), SHI V NAGAR LALBAUG, MUMBAI 400012 VS. ESTATE, DR. A.B. ROAD, WORLI MUMBAI 400018 PAN - AACEC 6777 E APPELLANT RESPONDENT APPELLANT BY: SHRI V.V. SHASTRI RESPONDENT BY: SHRI NIKHIL TIWARI DATE OF HEARING: 29.11.2011 DATE OF PRONOUNCEMENT: 29.11.2011 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL IS FILED AT THE INSTANCE OF THE REVENUE AND IT PERTAINS TO ASSESSMENT YEAR 2007-08. 2. IT IS WELL SETTLED PRINCIPLE THAT AN APPEAL CAN BE FILED BY THE PARTIES BEFORE THE APPELLATE TRIBUNAL BY VIRTUE OF THE PROV ISIONS OF SECTION 253 OF THE INCOME TAX ACT; 253(1) EMPOWERS THE AGGRIEVED A SSESSEE TO PREFER AN APPEAL AGAINST THE ORDERS OF THE TAX AUTHORITIES WH EREAS THE REVENUE (IN THE INSTANT CASE - THE ASSESSING OFFICER) CAN PREFER AN APPEAL IF AN AUTHORISATION IS ISSUED UNDER SECTION 253(2) OF THE ACT BY THE CO MMISSIONER OF INCOME TAX. IN THE INSTANT CASE THE LEARNED COMMISSIONER A UTHORISED THE ASSESSING OFFICER TO PREFER AN APPEAL ON THE FOLLOWING GROUND S: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE INSURANCE PREMIUM PAID ON THE LIFE OF PARTNERS OF THE FIRM AS BUSINESS EXP ENDITURE WITHOUT APPRECIATING THE FACT THE PREMIUM PAID FOR PARTNERS LIFE IN KEYMAN INSURANCE POLICY IS ALLOWABLE ONLY ON THE LIFE OF ONE PARTNER AS PER CBDT CIRCULAR NO. 762 DT. 18 TH FEBRUARY, 1988. ITA NO. 6195/MUM/2010 M/S. CHOUDHARY EXPORTS 2 2. THE CIT(A) HAS ERRED IN ALLOWING THE INSURANCE P REMIUM PAID AS BUSINESS EXPENDITURE WITHOUT APPRECIATING THE FACT THAT CBDTS CIRCULAR NO. 762 CLARIFIES THE SCOPE AND PURPOSE OF THE PROVISIONS FOR ALLOWING SUCH DEDUCTIONS. 3. THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FAC TS THAT EXPLANATION TO SECTION 10(10D) STATES THAT FOR THE PURPOSE OF THIS CLAUSE, KEYMAN INSURANCE POLICY MEANS A LIFE INSU RANCE POLICY TAKEN BY A PERSON ON THE LIFE OF ANOTHER PERSON WHO IS OR WAS THE EMPLOYEE OF THE FIRST MENTIONED PERSON OR IS OR WAS CONNECTED IN ANY MANNER WHATSOEVER WITH THE BUSINES S OF THE FIRST-MENTIONED PERSON EMPHASIZING THEREBY THE SI NGULARITY OF THE PERSON ON WHOM SUCH INSURANCE POLICY COULD BE T AKEN. 3. HOWEVER, THE ASSISTANT COMMISSIONER OF INCOME TAX F ILED THE APPEAL ON AN ALTOGETHER DIFFERENT CAUSE, WHICH WAS NOT AUT HORISED BY THE COMMISSIONER OF INCOME TAX. IN THE GROUND ANNEXED T O FORM NO. 36 THE FOLLOWING GROUNDS WERE RAISED: - I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN OBSERVING THAT THE A.O. HAS NOT RAISED ANY QUESTION DURING THE ASSESSMENT PROCEEDINGS REGARDIN G THE CORRECTNESS OF THE ACCOUNT. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ESTIMATION OF THE NET PROFIT T 5.5% OF THE TOTAL PROFIT COST MADE BY THE A.O. III) THE CIT(A) ERRED IN DELETING THE DISALLOWANCE OF COMPUTER SOFTWARE EXPENSES TO THE EXTENT OF RS.1,11,52,455/- IV) THE CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A.O. ON ACCOUNT OF COST OF HARDWARE. V) THE CIT(A) ERRED IN DIRECTING THE A.O. TO ALLOW CREDIT FOR TAX DEDUCTED AT SOURCE ON MOBILIZATION ADVANCE. 4. IN ITEM NO. 12 OF FORM NO. 36 IT IS NOT MENTIONED A S TO WHAT IS THE RELIEF CLAIMED IN THE APPEAL. THOUGH THE REVENUE HA S FILED A REVISED FORM NO. 36, NEITHER PROPER GROUNDS WERE ANNEXED TO FORM NO. 36 NOR THE COLUMN WITH REFERENCE TO REVISED CLAIM WAS DULY FIL LED IN TO INDICATE AS TO WHAT ARE THE ISSUES ON WHICH REVENUE SEEKS TO FILE AN APPEAL CHALLENGING THE ORDER PASSED BY THE LEARNED CIT(A). UNDER THESE CIRCUMSTANCES, UPON HEARING THE LEARNED D.R. AS WELL AS THE LEARNED COU NSEL FOR THE ASSESSEE, WE ARE OF THE VIEW THAT THE APPEAL IS FILED WITHOUT AU THORISATION AND HENCE TO BE DISMISSED IN LIMINE AS THE SAME IS CONTRARY TO THE AUTHORIZATION ISSUED BY ITA NO. 6195/MUM/2010 M/S. CHOUDHARY EXPORTS 3 THE COMMISSIONER OF INCOME TAX AND THUS BEYOND THE PROVISIONS OF SECTION 253(2). AS DECLARED IN THE OPEN COURT THE APPEAL FI LED BY REVENUE IS DISMISSED IN LIMINE WITH THE LIBERTY TO THE REVENUE TO FILE A PROPER APPEAL, IF SO ADVISED BY THE CONCERNED COMMISSIONER. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER 2011. SD/- SD/- (J. SUDHAKAR REDDY) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 29 TH NOVEMBER 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXIX, MUMBAI 4. THE CIT XVIII, MUMBAI CITY 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.