ACIT 10(1)(2), MUMBAI V. KDD INDIA P. LTD, MUMBAI

ITA 6685/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6048 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2013-2014
• Appeal Filed On: 23-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LALCHAND CHOUDHARY
• Keywords: Tax effect; Set aside
• Section: 37(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H , MUMBAI BEFORE S HRI RAJESH KUMAR (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 6685 /MUM/2017 ASSESSMENT Y EAR: 2013 - 14 THE A.C.I.T. 10(1)(2), R. NO. 209, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S KDD (INDIA) PVT. LTD., C/O REGUS SUBURB CENTRE PVT. LTD., LEVEL 4, DYNASTY BUSINESS PARK, ANDHERI KURLA ROAD, ANDHERI (EAST), MUMBAI 400059 PAN: AADCK5691B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI MANOJ KUMAR SINGH (DR) ASSESSEE BY : SH RI LALCHAND CHOUDHARY ( A R ) DATE OF HEARING: 02/01 /201 9 DATE OF PRONOUNCEMENT: 02 / 01 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 2 0.09.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 17 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2013 - 14 , WHEREBY THE LD. CIT(A) HAS ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143 (3) ) OF THE INC OME TAX ACT, 1961 (FOR SHORT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF TRADING AND MARKETING FRUIT PULP AND FRUIT JUICE, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARIN G THE TOTAL LOSS OF RS. 11,79,73,977/ - . THE ASSESSMENT WAS COMPLETED U/S 143 (3) OF THE ACT DETERMINING THE TOTAL LOSS AT RS. 9,41,67,746/ - , AFTER MAKING DISALLOWANCE U/S 37(1) OF THE ACT IN RESPECT OF BRAND BUILDING EXPENSES OF RS. 3,03, 77,326/ - 2 ITA NO. 6685 / MUM/2017 ASSESSMENT YEAR: 2013 - 14 AND DI SALLOWANCE ON ACCOUNT OF LISTING AND DISPLAY CHARGES OF RS. 34,87,321/ - AND FURTHER DISALLOWING 1/5 TH OF THE TOTAL EXPENDITURE , UNDER THE PROVISIONS OF SECTION 35(D) OF THE ACT . IN THE FIRST APPEAL, THE LD. CIT (A) SET ASIDE THE FINDINGS OF THE AO AND ALLO WED THE DEDUCTION CLAIMED BY THE ASSESSEE. 3 . AGGRIEVED BY THE ORDER OF LD. CIT (APPEAL S ), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT (A) ERRED IN NOT TREATING THE LISTING AND DISPLAY CHARGES AS CAPITAL IN NATURE IGNORING THE FACT THAT THIS EXPENDITURE IS GOING TO GIVE ENDURING BENEFITS TO THE ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) ERRED IN NOT TREATING TH E LIST AND DISPLAY CHARGES AS CAPITAL IN NATURE IGNORING THE FACT THAT THE ASSESSEE ITSELF CONSIDERED THE LISTING & DISPLAY CHARGES AS DEFERRED EXPENDITURE IN ITS BOOKS OF ACCOUNT BUT CHANGED ITS STAND SUBSEQUENTLY AND CLAIMED THE SAID EXPENDITURE AS REVEN UE EXPENDITURE. 4. AT THE OUTSET, THE LD. COUNSEL FOR THE RESPONDENT/ASSESSEE POINTED OUT THAT THE TAX EFFECT OF THE RELIEF GRA NTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS BELOW RS.20 LACS AND AS PER THE CBDT CIRCULAR NO. 3/2018, F. NO. 279/M ISC.142/2007 - ITJ (PT) DATED 11 TH JULY, 2018 ISSUED BY CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA LIMIT FIXED BY THE CBDT FOR FILING THE APPEAL BEFORE THE ITAT IS 20 LACS . 5. THE LD. DEPARTMENTAL REPRESEN TATIVE (DR) FAIRLY CONCEDED THAT TH IS APPEAL IS NOT MAINTAINABLE IN LIGHT OF THE ABOVE SAID CBDT CIRCULAR. THE LD. DR ALSO DID NOT POINT OUT THAT TH IS APPEAL FALL S IN ANY OF THE EXCEPTIONS CARVED OUT IN THE ABOVE SAID CIRCULAR. 3 ITA NO. 6685 / MUM/2017 ASSESSMENT YEAR: 2013 - 14 6. WE HAVE GONE THROUGH TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE GROUNDS OF APPEALS. WE FIND THAT THE TAX EFFEC T IN THE ABOVE REFERRED APPEAL IS LESS THAN RS. 20 LACS. ACCORDINGLY, W E DISMISS THE AFORESAID APPEAL FILED BY THE REVENUE. IN THE RESULT, APPE AL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2013 - 2014 IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JANUARY , 2019 . SD/ - SD/ - ( RAJESH KUMAR ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 02 / 01 / 201 9 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI