M/s. Mentor Knowledge Management Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-4(1), Baroda

ITA 64/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6119 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 09-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO.64/AHD/2014 (ASSESSMENT YEAR:2010-11) M/S. MENTOR KNOWLEDGE MANAGEMENT PVT. LTD., 11-B, SAMPATRAO COLONY, ALKAPURI, BARODA APPELLANT VS. INCOME TAX OFFICER, WARD 4(1), BARODA RESPONDENT PAN: AAGCM0536J /BY ASSESSEE : SHRI ANIL R SHAH WITH MS. KIN JAL SHAH, A.R. /BY REVENUE : SHRI S. K. DEV, SR. D.R. /DATE OF HEARING : 17.04.2017 /DATE OF PRONOUNCEMENT : 19.04.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 ARISES AGAINST CIT(A)-III, BARODAS EX PARTE ORDER DATED 27.11.201 3, IN APPEAL NO. CAB/III- 243/2012-13, THEREBY UPHOLDING THE ASSESSING OFFICE RS ACTION DISALLOWING/ADDING EXPENDITURE TOWARDS REFUND OF FE ES OF RS.1,58,000/- AND THE ONE U/S.40(A)(IA) OF THE ACT AMOUNTING TO RS.61 ,759/-, IN PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961, IN SHORT T HE ACT. ITA NO. 64/AHD/2014 (M/S. MENTOR KNOWLEDGE MANAGEME NT PVT. LTD. VS. ITO) A.Y. 2010-11 - 2 - 2. WE COME TO THE FORMER ISSUE OF DISALLOWANCE OF R EFUND CLAIM OF RS.1.58LACS. THE ASSESSEE IS A COMPANY IMPARTING V ARIOUS EDUCATIONAL COURSES OF NIS SPARTA LTD., NEW DELHI. THERE IS NO DISPUTE THAT IT HAS SHOWN TOTAL COMMISSION INCOME OF RS.80,48,297/- ALONGWITH NET PROFIT OF RS.5,23,151/-. IT CLAIMED TO HAVE REFUNDED THE IMP UGNED SUM OF RS.1.58LACS TO VARIOUS STUDENTS WHOSE DETAILS ARE GIVEN IN PAGE 78 OF THE PAPER BOOK. NECESSARY MODE OF PAYMENT IS BY WAY OF BANKING CHAN NEL. BOTH THE LOWER AUTHORITIES DENY THIS REFUND AS AN EXPENDITURE CLAI MED AFTER CONCLUDING THAT THERE WAS NO SUCH OBLIGATION ON THE ASSESSEE TO INC UR THE SAID HEAD AS PER ITS AGREEMENT WITH THE ABOVE ENTITY. THEY ARE FAIR ENO UGH IN NOT DISPUTING GENUINENESS OF THE REFUND CLAIM. IT IS VERY MUCH E VIDENT FROM PERUSING THE CASE FILE THAT THE EIGHT STUDENTS IN QUESTION SUBMI TTED THEIR REFUND REQUEST TO ASSESSEE ONLY AT BARODA INSTEAD OF THE ABOVESTATED NEW DELHI BASED ENTITY. IT HAS ALREADY COME ON RECORD THAT IT IS THE ASSESSEE IN FACT WHO IMPARTED THE EDUCATIONAL COURSE IN QUESTION TO THE SAID STUDENT AFTER RECEIVING INCOME. WE OBSERVE IN THESE PECULIAR FACTS THAT THE ABOVE REFU ND AMOUNTS TO EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR ASSESSEES BUSI NESS SO AS TO BE ALLOWED U/S.37 OF THE ACT SINCE IT WAS AN EFFORT TO GARNER MORE AND MORE MARKET GOODWILL. WE THEREFORE DELETE THIS FORMER DISALLOW ANCE OF REFUND CLAIM AMOUNTING TO RS.1.58LACS. 3. THIS LEAVES US WITH THE LATTER ISSUE OF SECTION 40(A)(IA) DISALLOWANCE OF RS.61,759/-. BOTH THE LOWER AUTHORITIES INVOKE THE IMPUGNED DISALLOWANCE ON THE GROUND THAT THE ASSESSEE FAILED TO DEDUCT TD S ON REPAIR AND MAINTENANCE CHARGES ABOVESAID. PAGE 79 OF THE PAPE R BOOK HOWEVER REVEALS THAT THE ASSESSEE HAD IN FACT PURCHASED DISTEMPERS, OIL PAINTS, TEXTURE PAINTS AND OTHER PAINTS TOTALING TO ABOVESTATED AMOUNT INS TEAD OF HAVING MADE PAYMENTS FOR REPAIRS AND MAINTENANCE SO AS TO BE EX IGIBLE TO SECTION 194C TDS PROVISO. THIS CRUCIAL EVIDENCE VERY MUCH FORMS PART OF RECORDS BEFORE ITA NO. 64/AHD/2014 (M/S. MENTOR KNOWLEDGE MANAGEME NT PVT. LTD. VS. ITO) A.Y. 2010-11 - 3 - THE LOWER AUTHORITIES WHICH WAS NOWHERE REJECTED. WE THEREFORE CONCLUDE THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HA VE ERRED IN MAKING THE IMPUGNED DISALLOWANCE IN FACTS OF THE INSTANT ISSUE . THE SAME STANDS DELETED. 4. THE ASSESSEE SUCCEEDS IN ITS INSTANT APPEAL. [PRONOUNCED IN THE OPEN COURT ON THIS THE 19 TH DAY OF APRIL, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 19/04/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )* + ,--. . /0 / DR, ITAT, AHMEDABAD 1 + 23 / GUARD FILE. BY ORDER / . // . /0