M/s. Maple IT Services Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 6243/DEL/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4939 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKHI VIMAL SENIOR
• Assessee Lawyers: R S AHUJA
• Keywords: Opportunity of being heard; Rule of consistency; Additional evidence; Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE VICE PRESIDENT, SHRI G.S. PANNU AND SHRI KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.6243/DEL./2016 (ASSESSMENT YEAR : 2011-12) M/S. MAPLE IT SERVICES PVT. LTD., VS. ACIT, C 160, OKHLA INDUSTRIAL AREA, PHASE-I, CENTRAL C IRCLE 11, NEW DELHI 110 020. (PAN : AAECM4273E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. AHUJA, CA REVENUE BY : MS. RAKHI VIMAL, SENIOR DR DATE OF HEARING : 30.09.2020 DATE OF ORDER : 07.10.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. MAPLE IT SERVICES PVT. LTD. (HEREIN AFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 30.09.2016 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-24, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA T HAT :- ITA NO.6243/DEL./2016 2 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED ITO ERRED IN MAKING AN ADDITION AND THE CIT (A) IN CONFIRMING THE SAME OF THE SUM OF RS.29,23,8 04/- HAVING INTEREST & FINANCE EXPENSES U/S 36(1)(III) O F THE INCOME TAX ACT. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE, M/S. MAPLE IT S ERVICES PVT. LTD., HAS COME UP BEFORE THE TRIBUNAL CHALLENGING T HE IMPUGNED DISALLOWANCE OF RS.29,23,804/- I.E. 15% OF THE INTE REST EXPENSES OF RS.1,94,92,033/- DEBITED TO THE PROFIT & LOSS ACCOU NT UNDER SECTION 36(1)(III) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) AND MADE ADDITION THEREOF TO THE TOTAL INCOME OF THE AS SESSEE FOR ASSESSMENT YEAR 2011-12 ON THE GROUND THAT ASSESSEE HAS NOT FURNISHED ANY DETAIL REGARDING INTEREST EXPENSES PA ID DURING THE YEAR TO WORK OUT IF SUCH INTEREST AND FINANCIAL EXP ENSES PAID WERE EXCLUSIVELY UTILIZED FOR THE PURPOSE OF ASSESSEES BUSINESS ONLY AND THEREBY FRAMED ASSESSMENT AT RS.251,93,905/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING THE APPEAL WHO HAS PARTLY ALLOWED THE SAME B UT CONFIRMED THE IMPUGNED ADDITION OF RS.29,23,804/- MADE BY THE AO. FEELING AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT (A), T HE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PR ESENT APPEAL. ITA NO.6243/DEL./2016 3 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ADDITION CONTENDED INTER ALIA THAT ASSESSEE HAS NOT BEEN GRA NTED ANY OPPORTUNITY BY THE AO WHO HAS FRAMED THE ASSESSMENT EX-PARTE AND AT THE SAME TIME, LD. CIT (A) HAS ALSO NOT MADE ENQUIRY BY CALLING THE REMAND REPORT FROM THE AO WHILE ADMITTI NG THE ADDITIONAL EVIDENCE WHICH HAS NOT BEEN EXAMINED IN RIGHT PERSPECTIVE; THAT ASSESSEE COMPANY HAS TAKEN THE LO AN FROM THE SISTER CONCERN AT THE LOW RATE OF 12.60% AND 13.50% WHEREAS CHARGED THE INTEREST ON THE LOAN GIVEN TO THE SISTE R CONCERN @ 14%; THAT ADDITION HAS BEEN MADE BY AO AND CONFIRMED BY THE LD. CIT(A) MERELY ON THE BASIS OF GUESSWORK WITHOUT DIS PUTING THE AUDITED FINANCIALS; THAT TURNOVER OF THE ASSESSEE C OMPANY DURING THE YEAR UNDER ASSESSMENT HAS GONE UP TO RS.23.41 C RORES FROM RS.9.92 CRORES IN THE PREVIOUS YEAR; THAT ASSESSEE COMPANY HAS EXPLAINED EACH AND EVERY ENTRY IN ITS ACCOUNT BOOK QUA PAYMENT OF INTEREST ON THE LOAN DEBITED TO THE PROFIT & LOSS A CCOUNT; AND THAT NO SUCH ADDITION HAS BEEN MADE IN THE EARLIER YEARS I. E. AY 2009-10 & ITA NO.6243/DEL./2016 4 2010-11 WHEREIN ASSESSMENT HAS BEEN FRAMED U/S 143 (3) BY MAKING ANY SUCH DISALLOWANCE U/S 36(1)(III) OF THE ACT. 6. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVEN UE TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSES SEE CONTENDED INTER ALIA THAT SUFFICIENT OPPORTUNITY HAS BEEN GIV EN TO THE ASSESSEE COMPANY BY THE AO AS WELL AS LD. CIT (A); THAT RULE OF CONSISTENCY IS NOT APPLICABLE TO THE CASE AT HAND AS IT IS TO B E DECIDED ON THE BASIS OF ITS OWN FACTS AND HAS ALSO FILED WRITTEN S UBMISSIONS OPPOSING THE APPLICABILITY OF RULE OF CONSISTENCY A ND CASE LAWS APPLICABLE TO THE PROPOSITION AT HAND, WHICH HAS BE EN MADE PART OF THE JUDICIAL RECORD. 7. UNDISPUTEDLY, AO HAS FRAMED ASSESSMENT U/S 144 O F THE ACT ON ACCOUNT OF NON-APPEARANCE OF THE ASSESSEE COMPAN Y BY MAKING AD HOC DISALLOWANCE OF RS.29,23,804/-, EQUIVALENT T O 15% OF RS.1,94,92,033/-, OF INTEREST EXPENDITURE DEBITED T O THE PROFIT & LOSS ACCOUNT MERELY ON THE BASIS OF GUESSWORK. IT IS ALSO NOT IN DISPUTE THAT ASSESSEE COMPANY HAS BEEN GIVEN ADEQUA TE OPPORTUNITY BY THE LD. CIT (A) TO PROVE ITS CASE. IT IS ALSO N OT IN DISPUTE THAT ASSESSEE COMPANY HAS PAID INTEREST TO THE TUNE OF R S.1,94,92,033/- AND HAS RECEIVED THE INTEREST TO THE TUNE OF RS.1,6 7,06,953/- HAVING DIFFERENCE OF RS.27,85,080/- DURING THE YEAR UNDER ASSESSMENT. IT ITA NO.6243/DEL./2016 5 IS ALSO NOT IN DISPUTE THAT FINANCIALS OF THE ASSES SEE COMPANY ARE AUDITED ONE AND HAVE NOT BEEN DISPUTED AT ANY STAGE OF THE PROCEEDINGS BY THE REVENUE. 8. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, WHEN WE EXAMINE PARA 4.5.2 OF THE IMPUGNE D ORDER PASSED BY THE LD. CIT (A), IT APPEARS THAT CASE OF THE ASSESSEE COMPANY HAS NOT BEEN EXAMINED IN ENTIRETY. THOUGH LD.CIT (A) HAS ADMITTED THE ADDITIONAL EVIDENCE BUT THE SAME H AS ALSO NOT BEEN DISCUSSED AS TO HOW THE SAME IS OF NO SUPPORT TO TH E ASSESSEE COMPANY. BOTH AO AS WELL AS LD. CIT (A) HAVE MADE AD HOC DISALLOWANCE ON THE REASON THAT THE BANK STATEMENT HAS NOT BEEN FURNISHED BY THE ASSESSEE COMPANY TO PROVE THE UTIL IZATION OF THE LOAN ON WHICH INTEREST HAS BEEN PAID FOR THE PURPOS E OF ITS BUSINESS. EVEN IT IS DIFFICULT TO MAKE OUT THE NATURE OF THE ADDITIONAL EVIDENCE, PRESUMABLY ENTERTAINED BY CIT (A) FOR THE REASON THAT IT IS NECESSARY FOR DECIDING THE ISSUE, FROM THE IMPUG NED ORDER. ENTIRE FINDINGS RETURNED BY CIT (A) CONFIRMING THE ADDITION ARE BEREFT OF PLAUSIBLE REASONING. 9. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT TO ENHANCE THE CAUSE OF JUSTICE, THE ISSUE IS REQUIRED TO BE FACTUALLY EXAMINED IN ENTIRETY BY THE AO BY EXAMINING AUDITED FINANCIALS OF ITA NO.6243/DEL./2016 6 THE ASSESSEE COMPANY AND KEEPING IN VIEW THE FACT T HAT THIS IS A CASE OF LOAN ADVANCED AND AVAILED OF BY THE ASSESSE E COMPANY TO AND FROM ITS SISTER CONCERN AND DURING THE YEAR UND ER ASSESSMENT, ITS TURNOVER HAS GONE UP TO RS.23.41 CRORES FROM RS .9.92 CRORES. AO SHALL PROVIDE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE COMPANY TO PROVE UTILIZATION OF THE LOAN IN QUESTIO N FROM ITS EVIDENCE AS WELL AS FROM THE BANK STATEMENTS. CONS EQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATIST ICAL PURPOSES AND THE CASE IS REMITTED BACK TO THE AO TO DECIDE AFRES H AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ORDER PRONOUNCED IN OPEN COURT ON THIS 7 TH DAY OF OCTOBER , 2020. SD/- SD/- (G.S. PANNU) (KULDIP SINGH) VICE PRESIDENT JUDICIAL MEMBER DATED THE 7 TH DAY OF OCTOBER, 2020 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-24, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.