DCIT, New Delhi V. M/s. Jubilant Capital Pvt. Ltd., Noida

ITA 6544/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97632 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIR LAMJEET SINGH
• Assessee Lawyers: M K GUPTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI C.M.GAR G, JM ITA NO. 6544/DEL./2013 : ASSTT. YEAR : 2009-10 DCIT CIRCLE-4(1), C.R.BUILDING NEW DELHI VS JUBILANT CAPITAL PVT. LTD. PLOT NO. 1A, SECTOR 16A, INSTITUTIONAL AREA NOIDA (APPELLANT) (RESPONDENT) PAN NO. AAACG4198G APPELLANT BY : SH. NIR LAMJEET SINGH, SR. DR RESPONDENT BY : SH. M.K.GUPTA, ADV. DATE OF HEARING : 1.10.2015 DATE OF PRONOUNCEMENT :14 .10.2015 ORDER APPEAL BY THE REVENUE DIRECTED AGAINST THE ORDERS O F THE COMMISSIONER OF INCOME TAX (APPEALS)- VIII, NEW DELHI DATED 19.9.20 13 FOR THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING DISALLOWA NCE OF RS. 26,83,576/- MADE BY THE AO OUT OF SERVICE CHARGE PA ID TO GROUP COMPANY? 2. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 2. AFTER HEARING THE RIVAL CONTENTIONS, WE FIND T HAT A SIMILAR ISSUE OF APPORTIONMENT OF EXPENDITURE HAS ARISEN IN THE CASE OF AGGRIEVED COMPANY M/S JUVILANT SECURITY PVT. LTD. IN ITA NO. 1245/DEL/2013 FOR THE ASSESSMENT YE AR 2009-10 AND THE D BENCH VIDE ORDER DATED 09.01.2014 HAS UPHELD BY THE HONB LE DELHI HIGH COURT IN ITA NO. 490/DEL/2014 JUDGMENT DATED 27 NOVEMBER, 2014 WHERE AS PARA 4 IT IS HELD AS FOLLOWS :- ITA NO.6544/DEL/2013 JUBILANT CAPITAL PVT. LTD. : A.Y : 2009-10 2 4. THE SAID FINDING HAS BEEN REVERSED BY THE TRIB UNAL IN THE IMPUGNED ORDER. THE TRIBUNAL, ACCEPTING THE PLEA OF THE ASSESSEE, HAS OBSERVED THAT THE SERVICES RENDERED BY M/S. JUBILAN T ENPRO PVT. LTD. WERE IN THE NATURE OF ASSISTANCE AND SUPPORT SERVIC ES LIKE ASSISTANCE IN RELATION TO OBTAINING WORK, SUBMISSIONS OF BIDS AND SUBSEQUENT NEGOTIATIONS, ADVISING CURRENT DEVELOPMENTS, ADIVIS NG REGARDING VISAS AND LABOUR PERMITS, ADVICE ON IMPORTATION AND EXPOR TATION OF MATERIAL VESSELS EQUIPMENTS RIGS ETC. THE AFORESAID WORK AND OBLIGATION UNDERTAKEN BY M/S. JUBILANT ENPRO PVT. LTD. WAS DEP ENDANT UPON THE NUMBER OF RIGS AND THIS WOULD DETERMINE COST APPORT IONMENT OF THE SUPPORT SERVICES WHICH WERE GIVEN AND PROVIDED TO T HE RECIPIENTS. THE SERVICES WERE NOT DEPENDENT UPON THE SIZE OF THE RI GS OR THE TURNOVER. THE CONTENTION OF THE RESPONDENT ASSESSEE THAT THE APPORTIONMENT OF COST SHOULD NOT BE MADE ON THE BASIS OF THE TURNOVE R, BUT, ON THE BASIS OF NUMBER RIGS WAS ACCEPTED. THE AFORESAID FINDINGS ARE FINDINGS OF FACT AND THERE IS NO REASON OR GROUND TO HOLD THAT THE SAID FINDINGS ARE PERVERSE. NOTICEABLY, M/S. JUBILANT ENPRO PVT. LTD. HAD PROVIDED SERVICES TO OTHER SISTER CONCERNS OF THE RESPONDENT ASSESSEE. THE AMOUNT AND QUANTUM PAID BY THE ASSESSEE AND OTHER G ROUP COMPANIES IS NOT IN DISPUTE. ANY DISALLOWANCE IN THE HANDS OF THE RESPONDENT ASSESSEE WOULD NECESSARILY MEAN INCREASE OF EXPENDI TURE INCURRED BY THE SISTER CONCERN, AS THERE IS NO DISPUTE ABOUT TH E COST INCURRED BY M/S. JUBILANT ENPRO PVT. LTD. OTHERWISE ALSO, IT W OULD RESULT IN REDUCTION OR LOWER INCOME EARNED BY M/S. JUBILANT E NRPO PVT. LTD. THE ASSESSING OFFICER DID NOT INVOKE SECTION 40A(2) OF THE ACT, OR HOLD THAT THE PAYMENT MADE WERE DISPROPORTIONATE TO THE MARKET VALUE OF THE SERVICES RENDERED. ENGAGING SERVICES OF M/S. JUBILANT ENRPO PVT. LTD. HAD HELPED THE ASSESSEE AND OTHER GROUP C OMPANIES TO REDUCE COSTS, AS FOR THE COMMON SERVICES THEY DID N OT ENGAGE EMPLOYEES OR CONSULTANTS SEPARATELY. THIS IS CLEAR FROM THE SUBMISSION MADE AND FINDINGS OF THE TRIBUNAL THAT THERE4 WAS C OMMONALITY IN THE NATURE OF SERVICES AND THEREFORE, THE RESPONDENT AS SESSEE AND TOEHR SISTER CONCERNS HAD ESTABLISHED AND TAKEN SERVICES FROM ONE COST CENTRE I.E. M/S. JUBILANT ENRPO PVT. LTD. THE RESPO NDENT COMPANY AND OTHERS HAD AGREED TO PAY FOR THE SERVICES BY WAY OF REIMBURSEMENT OF EXPENSES. IN VIEW OF THE AFORESAID POSITION, WE DO NOT THINK, IN THE PRESENT APPEALS, THE FIRST ISSUES REQUIRES ADMISSIO N. ITA NO.6544/DEL/2013 JUBILANT CAPITAL PVT. LTD. : A.Y : 2009-10 3 3. THUS, THE ISSUE AS TO WHETHER THE APPORTIONMENT OF EXPENDITURE SHOULD BE MADE BETWEEN THE TWO COMPANIES ON THE BASIS OF PER RIG MONTH BASIS OR IN THE RATIO OF REVENUE GENERATION, IS NOT MORE RES INTEGRA. 4. IN THE RESULT, WE UPHOLD THE ORDERS OF THE FIR ST APPELLATE AUTHORITY AND DISMISS THIS APPEAL OF REVENUE. (ORDER PRONOUNCED IN THE COURT ON 14/1 0/2015). SD/- SD/- (C.M.GARG) (J.SUDHAKAR REDDY) (JUDICIAL MEMBER) (AC COUNTANT MEMBER) DATED:14 /10/2015 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGIS TRAR ITA NO.6544/DEL/2013 JUBILANT CAPITAL PVT. LTD. : A.Y : 2009-10 4 DATE INITIAL 1. DRAFT DICTATED ON 1.10.2015 2. DRAFT PLACED BEFORE AUTHOR 1.10.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.