Leo PrimeComp (Private) Limited, CHENNAI V. DCIT, CHENNAI

ITA 640/CHNY/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6521 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 15-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Section: 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , ! , ' !# BEFORE SHRI N.R.S. GANESAN , JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBE R ./ ITA NO.640/CHNY/2017 $ %$ /ASSESSMENT YEAR: 2012-13 M/S. LEO PRIME COMP (PRIVATE) LTD., 61 & 62, LAKSHMANAN NAGAR, KANDANCHAVADI, CHENNAI 600 096. VS. THE DY. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-4(1), CHENNAI. [PAN : AAACL 1901E ] ( &' /APPELLANT) ( ()&' /RESPONDENT) &' * + / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ()&' * + /RESPONDENT BY : DR. S. PANDIAN, JCIT , * -' /DATE OF HEARING : 25.07.2019 ./% * -' / DATE OF PRONOUNCEMENT : 16.10.2019 / O R D E R PER SHRI S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-8, CHENNAI IN ITA NO.51/2015- 16 DATED 03.02.2017 FOR THE ASSESSMENT YEAR (AY) 20 12-13. 2. M/S. LEO PRIME COMP (PRIVATE) LTD., THE ASSESSEE , IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF AUTO COMPONENTS RE QUIRED FOR VARIOUS ITA NO.640/CHNY/2017 :- 2 -: INDUSTRIES. WHILE MAKING THE ASSESSMENT FOR AY 201 2-13, THE ASSESSING OFFICER (AO), INTER ALIA, DISALLOWED RS. 1,37,61,00 0/- CLAIMED TO HAVE BEEN INCURRED FOR BUSINESS PROMOTION EXPENSES. AGGR IEVED AGAINST THAT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE CIT(A). THE LD. CIT(A) DISMISSED THIS ISSUE. AGGRIEVED AGAINST THAT ORDER OF THE LD. CIT(A), THE ASSESSEE FILED THIS APPEAL. 3. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE LD. CIT(A) ERRED IN SUSTAINING THE BUSINESS OF PROMOTION EXPEN SES WITHOUT APPRECIATING THAT THE VARIOUS EXPENSES WERE INCURRE D WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND WITHOUT CONSIDERING THE SUBMISSION MADE BY THE ASSESSEE BEFORE THE AO AS WE LL AS THE LD. CIT(A). PER CONTRA, THE LD. DEPARTMENTAL REPRESENT ATIVE (DR) SUBMITTED THAT THE ASSESSEE HAS FILED VARIOUS DATA, GROSS VAL UE OF BUSINESS PROMOTION EXPENDITURE ETC. FOR THE LAST THREE YEARS ETC. HOWEVER, IT DID NOT EXPLAIN THE NATURE OF THE EXPENDITURE AND HOW IT IS RELEVANT TO THE BUSINESS ACTIVITY ETC. THEREFORE, THE AO DISALLOWE D THE ABOVE SUM, WHICH HAS BEEN RIGHTLY DISMISSED BY THE LD. CIT(A). THE LD. AR REBUTTED STATING THAT THE ASSESSEES COMPANY IS PRIMARILY IN CUSTOMER AND PRODUCT SPECIFIC MARKET, MANUFACTURING CUSTOMIZED PRODUCTS AS THE REQUIREMENTS OF THE CUSTOMER, IT WAS HAVING SIX MANUFACTURING PL ANTS AT VARIOUS LOCATIONS OF TAMIL NADU AND PONDICHERRY. CONSIDERI NG THE SIZE OF THE ITA NO.640/CHNY/2017 :- 3 -: COMPANY AND THE INDUSTRY IN WHICH IT OPERATES, THE SCALE OF BUSINESS ETC. IT IS NECESSARY FOR THE COMPANY TO INCUR BUSINESS P ROMOTION EXPENSES. THE ASSESSEE HAS INCURRED BUSINESS PROMOTION TO THE EXTENT OF 1.61% OF THE TURNOVER, WHICH IS REASONABLE AND ACCEPTABLE AN D HENCE, PLEADED TO ALLOW THE APPEAL. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THOUGH THE ASSESSEE HAS PROVIDE D STATISTICAL DATA ETC, IT IS SEEN THAT IT HAS NOT FURNISHED THE BASIC REQUIREMENTS LIKE THE NATURE OF THE EXPENDITURE, THE RELEVANCY OF BUSINES S EXPENDITURE ETC. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DEEM IT FIT TO REMIT THIS ISSUE BACK TO THE FILE OF AO FOR A FRESH EXAMINATION. SIN CE, THE ASSESSEE IS CLAIMING THE EXPENDITURE, THE ONUS IS ON THE ASSESS EE TO LAY ALL MATERIAL IN SUPPORT OF ITS CONTENTION AND EXPLAIN THE NATURE OF EXPENDITURE AND THE BUSINESS EXPEDIENCY ETC. BEFORE THE AUTHORITIES CON CERNED. THEREFORE, THE ASSESSEE SHALL LAY ALL MATERIAL IN SUPPORT OF I TS CONTENTION BEFORE THE AO AND COMPLY WITH THE REQUIREMENTS OF THE AO IN AC CORDANCE WITH LAW. THE AO IS AT LIBERTY TO CONDUCT APPROPRIATE ENQUIRY AS DEEMED FIT, HOWEVER, HE SHALL AFFORD ADEQUATE OPPORTUNITY TO TH E ASSESSEE ON THE MATERIAL ETC. TO BE USED AGAINST IT AND AFTER CONSI DERING THE ASSESSEES REPLY ETC. SHALL PASS AN ORDER IN ACCORDANCE WITH L AW. ITA NO.640/CHNY/2017 :- 4 -: 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2019 IN CHENNAI. SD/ - SD/ - ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, 4 /DATED: 16 TH OCTOBER, 2019 . EDN, SR. P.S * (-56 76%- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 8- ( )/CIT(A) 4. , 8- /CIT 5. 69 (- /DR 6. $ : /GF