ACIT-16(1), MUMBAI V. M/S.GLAMOUR ENTERTAINMENT PRIVATE LIMITED, MUMBAI

ITA 6609/MUM/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8942 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 15-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N PADMANABHANLD
• Assessee Lawyers: AJAY R SINGH; RAVINDRA POOJARYLD ARS
• Keywords: Additional evidence; Assessment record; Onus to prove; TDS; Set aside
• Section: 144

Judgement Text

ITA NO.6609/MUM/2017 M/S. GLAMOUR ENTERTAINMENT PRIVATE LIMITED ASSESSMENT YEAR :2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI MANOJ KUMAR AGGARWAL, AM AND HONBLE SHRI RAVISH SOOD, JM ./ I.T.A. NO.6609/MUM/2017 ( / ASSESSMENT YEAR: 2008-09) A CIT - 16 ( 1 ) AAYKAR BHAVAN ROOM NO.439, M.K. ROAD MUMBAI -400 020. / VS. M/S. GLAMOUR ENTERTAINMENT P .LTD. 3 RD FLOOR, SHAMROCK MAIN AVENUE ROAD SANTACRUZ (W), MUMBAI- 400 054. ./ ./PAN/GIR NO. AACCG-1659-A ( ! /APPELLANT ) : ( '#! / RESPONDENT ) ASSESSEE BY : S/SHRI AJAY R. SINGH & RAVINDRA POOJARY-LD. ARS REVENUE BY : MR. N. PADMANABHAN-LD. DR / DATE OF HEARING : 08/01/2020 / DATE OF PRONOUNCEMENT : 14/01/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2008-09 CONTEST THE ORDER OF LD. COMMI SSIONER OF INCOME- TAX (APPEALS)-4, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO.CIT(A)-4/TR-9/ACIT-11(1)/2014-15 DATED 14/06/2017 ON FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE HAD DISC HARGED THE BURDEN OF PROOF ITA NO.6609/MUM/2017 M/S. GLAMOUR ENTERTAINMENT PRIVATE LIMITED ASSESSMENT YEAR :2008-09 2 REGARDING THE GENUINENESS OF EXPENSES WHEN THE ASSE SSEE HAD FAILED TO CO-OPERATE DURING THE ASSESSMENT PROCEEDINGS AS WELL AS REMAND PROCEEDINGS. 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. WE HAVE CAREFULLY HEARD THE ARGUMENTS ADVANCED B Y BOTH THE REPRESENTATIVES. WE HAVE ALSO PERUSED RELEVANT MATE RIAL ON RECORD INCLUDING DOCUMENTS PLACED IN THE PAPER-BOOK. OUR A DJUDICATION TO THE SUBJECT-MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCE EDING PARAGRAPHS. 3. FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE B EING RESIDENT CORPORATE ASSESSEE STATED TO BE ENGAGED IN THE BUSI NESS OF MOTION PICTURE PRODUCTION WAS ASSESSED FOR YEAR UNDER CONS IDERATION ON BEST JUDGEMENT BASIS U/S 144 VIDE ORDER DATED 16/12/2010 IN VIEW OF THE FACT THAT THE ASSESSEE FAILED TO COMPLY WITH VARIOUS HEA RING NOTICES ISSUED BY LD. AO. CONSEQUENTLY, IN THE ABSENCE OF ANY DETAILS / DOCUMENTARY EVIDENCES TO SUPPORT THE EXPENSES OF RS.2113.45 LAC S, LD. AO MADE ESTIMATED DISALLOWANCE OF 40% AGAINST THE SAME. THE LD. AO ALSO NOTED THAT THE ASSESSEE FAILED TO COMPLY WITH THE REQUIRE MENTS OF SECTION 285B SINCE IT HAS FAILED TO FURNISH A STATEMENT IN FORM NO. 52A, GIVING DETAILS OF PAYMENT OVER RS.50,000/- MADE BY HIM DURING THE COURSE OF PRODUCTION OF FILMS. THE PERUSAL OF QUANTUM ASSESSM ENT ORDER WOULD REVEAL THAT THE ASSESSEE HAS BEEN DENIED SET-OFF OF BROUGHT FORWARD OF LOSSES OF RS.74.31 LACS ALSO SINCE THE SAID CLAIM C OULD NOT BE VERIFIED. 4. BEFORE LEARNED CIT(A), THE ASSESSEE TOOK A STAND THAT SUFFICIENT TIME WAS NOT PROVIDED TO THE ASSESSEE TO SUBSTANTIA TE THE CLAIMS MADE BY THE ASSESSEE. IT WAS ALSO ALLEGED THAT THE FACTS WERE NOT PROPERLY APPRECIATED BY LD. AO SINCE ALL THE INFORMATION WAS AVAILABLE IN FORM ITA NO.6609/MUM/2017 M/S. GLAMOUR ENTERTAINMENT PRIVATE LIMITED ASSESSMENT YEAR :2008-09 3 NO. 52A. AT THE SAME TIME, THE ASSESSEE PLEADED FOR ADMISSION OF ADDITIONAL EVIDENCES AGAINST WHICH A REMAND REPORT WAS SOUGHT FROM LD. AO ON 16/09/2011. IT EMANATES FROM IMPUGNED ORDER T HAT ALTHOUGH VARIOUS REMINDERS WERE SENT TO LD. AO TO SUBMIT THE REPORT, HOWEVER, THE SAME WAS NOT FORTHCOMING. THE LAST OF SUCH REMINDER WAS SENT ON 13/02/2017, WHICH MET THE SAME FATE AND NO REMAND R EPORT WAS FURNISHED DESPITE A LAPSE OF MORE THAN 5 YEARS. ULT IMATELY, LEFT WITH NO OPTION, IT WAS OBSERVED BY LD. CIT(A) THAT THE ASSE SSMENT BASED ON PURE GUESS WORK WOULD BE BAD IN LAW AND THEREFORE, THE DISALLOWANCE OF 40% AS MADE BY LD. AO, WAS DELETED. REGARDING SET-O FF OF LOSSES, A DIRECTION WAS ISSUED TO LD. AO TO VERIFY THE CORREC TNESS OF CLAIM FROM ASSESSMENT RECORD AND ACCEPT THE SAME, IT FOUND IN ORDER. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) PLEADED THAT THE ESTIMATED ADDITIONS AS MADE BY LD. AO WERE DELETED WITHOUT CARRYING OUT ANY VERIFICATIONS DESPITE THE FACT THAT THE ASS ESSEE FAILED TO APPEAL BEFORE LD. AO. AU CONTRAIRE, LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE (AR), TAKING US THROUGH THE DOCUMENTS PLAC ED IN THE PAPER- BOOK, SUBMITTED THAT THE EXPENDITURE WAS WELL DOCUM ENTED AND DUE TDS COMPLIANCE WAS MADE, WHEREVER APPLICABLE. IT HAS BE EN SUBMITTED THAT BOOKS OF ACCOUNTS WERE DULY AUDITED AND ACCEPTED BY THE DEPARTMENT IN ALL PREVIOUS YEARS. THE LD. AR ALSO RAISED A PLEA T HAT IN COMPLIANCE OF SEC. 285B, FORM NO. 52A WAS DULY FILED BY THE ASSES SEE ON 28/08/2007 AND COMPLETE DETAIL OF EXPENDITURE WAS ALREADY AVAI LABLE ON RECORD AT THE TIME OF ASSESSMENT PROCEEDINGS AND THEREFORE, T HERE COULD BE NO ITA NO.6609/MUM/2017 M/S. GLAMOUR ENTERTAINMENT PRIVATE LIMITED ASSESSMENT YEAR :2008-09 4 OCCASION TO MAKE DISALLOWANCE OF 40%. IN THE ABOVE BACKGROUND, LD. AR SOUGHT DISMISSAL OF APPEAL. 6. UPON CAREFUL CONSIDERATION OF FACTUAL MATRIX AS ENUMERATED ABOVE, WE FIND THAT THE ASSESSEE WAS UNDER DEFAULT BY NOT ATTENDING THE ASSESSMENT PROCEEDINGS WHICH LED LD. AO TO FRAME TH E ASSESSMENT ON BEST JUDGMENT BASIS U/S 144. IT WAS ONLY BEFORE LD. CIT(A), THE ASSESSE E CHOSE TO SUBMIT THE DOCUMENTARY EVIDENCES AND PLEAD ED FOR ADMISSION OF THE SAME. UNFORTUNATELY, DESPITE MULTIPLE REMIND ERS, THE REMAND REPORT WAS NOT FORTHCOMING EVEN AFTER LAPSE OF MORE THAN 5 YEARS. IN OUR CONSIDERED OPINION, THE POWERS OF LD. CIT(A) WERE C O-TERMINUS WITH THAT OF LD. AO AND LD. CIT(A) COULD, HIMSELF, PROCEED WI TH THE VERIFICATION OF EXPENDITURE. HOWEVER, PRIMA-FACIE NO SUCH EXERCISE APPEARS TO BE CARRIED OUT BY LD. CIT(A) WHO SIMPLY CHOSE TO DELET E THE PRIMARILY CONSIDERING THE FACT THAT REMAND REPORT WAS NOT FOR THCOMING. SUCH AN APPROACH ADOPTED BY LD. CIT(A), IN OUR CONSIDERED O PINION, COULD NOT BE HELD TO BE JUSTIFIED PARTICULARLY WHEN THE ASSESSEE CHOSE NOT TO ATTEND THE ASSESSMENT PROCEEDINGS WITHOUT ANY COGENT REASO NS. 7. KEEPING IN VIEW THE ENTIRETY OF FACTS AND CIRCUM STANCES, WE SET- ASIDE THE CONCLUSION OF LD. CIT(A) AND REMIT BACK T HE ISSUE OF DISALLOWANCE OF EXPENDITURE TO THE FILE OF LD. AO F OR RE-ADJUDICATION IN THE LIGHT OF THE DOCUMENTARY EVIDENCES SUBMITTED BY THE ASSESSEE. THE ASSESSEE IS DIRECTED TO SUBSTANTIATE THE SAME FALLI NG WHICH LD. AO SHALL BE AT LIBERTY TO PROCEED WITH ADJUDICATION ON THE B ASIS OF MATERIAL ON RECORD. THE LD. AR HAS PLEADED THAT VERIFICATION SH OULD BE LIMITED TO EXPENDITURE INCURRED BY THE ASSESSEE DURING THE IMP UGNED AY ONLY AND NOT BEYOND THAT SINCE THE EXPENDITURE INCURRED IN E ARLIER YEARS AND ITA NO.6609/MUM/2017 M/S. GLAMOUR ENTERTAINMENT PRIVATE LIMITED ASSESSMENT YEAR :2008-09 5 REFLECTED IN THE BOOKS OF ACCOUNTS HAVE BEEN ACCEPT ED BY THE DEPARTMENT. WE FIND THE SAME TO BE LOGICAL ONE AND THEREFORE, DIRECT LD. AO TO RESTRICT VERIFICATION OF EXPENDITURE INCURRED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ONLY. 8. SO FAR AS THE SET-OFF OF BROUGHT FORWARD LOSSES IS CONCERNED, LD. AO HAS ALREADY BEEN DIRECTED TO VERIFY THE RECORDS AND GRANT THE SAME, IF FOUND IN ORDER. THE SAID DIRECTIONS DO NOT REQUIRE ANY FURTHER INDULGENCE ON OUR PART EXCEPT TO THE EXTENT OF DIRECTIONS TO T HE ASSESSEE TO FILE THE REQUISITE DETAILS, IN SUPPORT OF THE SAME. 9. RESULTANTLY, THE APPEAL STANDS ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JANUARY, 2020. SD/- SD/- (RAVISH SOOD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 14/01/2020 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !/ THE APPELLANT 2. '#!/ THE RESPONDENT 3. O ( ) / THE CIT(A) 4. O / CIT CONCERNED 5. WX'%Y, Y, / DR, ITAT , MUMBAI 6. X[\] / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.