DELOITEE TOUCHE TOHMATSU INDIA P.LTD, MUMBAI V. DCIT 1(1), MUMBAI

ITA 6787/MUM/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3235 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Opportunity of being heard; Rule of consistency; Additional evidence; Revenue expenditure; Capital expenditure; TDS
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER ITA NO. 6787 / MUM . /2014 ( ASSESSMENT YEAR : 20 07 08 ) DELOITTE TOUCHE TOHMATSU INDIA P. LTD. 12, DR. A.B. ROAD, OPP. SHIV SAGAR ESTATE WORLI, MUMBAI 400 018 PAN AABCD1147R . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 1(1), MUMBAI . RESPONDENT ITA NO. 6489 /MUM. /2014 ( ASSESSMENT YEAR : 20 07 08 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 1(1), MUMBAI . APPELLANT V/S DELOITTE TOUCHE TOHMATSU INDIA P. LTD. 12, DR. A.B. ROAD, OPP. SHIV SAGAR ESTATE WORLI, MUMBAI 400 018 PAN AABCD1147R . RESPONDENT ASSESSEE BY : SHRI P.J. PARDIWALA A/W SHRI NIRAJ SHETH AND SHRI NINAD PATADE REVENUE BY : SHRI D.G. PANSARI DATE OF HEARING 30 . 1 1 .201 8 DATE OF ORDER 27.02.2019 2 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. O R D E R PER SAKTIJIT DEY, J.M. A FORESAID CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST ORDER DATED 6 TH AUGUST 2014, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 4, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2007 08. ITA NO.6489/MUM./2014 REVENUES APPEAL 2 . IN GROUND NO.1, THE REVENUE HAS CHALLENGED DELETION OF ADDITION OF ` 47,92,500. 3 . BRIEF FACTS ARE, THE ASSESSEE COMPANY, AS STATED BY THE ASSESSING OFFICER, IS ENGAGED IN THE BUSINESS OF PROVIDING CONSULTANCY SERVICES RELATING TO OPERATIONS, FINANCE, HUMAN RESOURCE AND INFORMATION TECHNOLOGY. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 6 TH NOVEMBER 20 07, DECLARING NIL INCOME. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ON VERIFYING THE AUDITED FINANCIAL STATEMENTS OF THE ASSESSEE NOTICED THAT AGAINST PROFESSIONAL FEES SHO WN OF ` 31,84,59,835, THE ASSESSEE HAS INCURRED SUBSTANTIAL EXPENSES ON ACCOUNT OF SALARY, BONUS, ETC., AMOUNTING TO ` 1 6,37,40,274, COMPARED TO PRECEDING YEARS EXPENDITURE OF ` 3 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. 8,55,96,230. BEING OF THE VIEW THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE IS DISPROPORTIONATE TO THE INCREASE IN INCOME, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN THE DETAILS OF INCOME AND EXPENSES. ON VERIFYING THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER NOTICED THAT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD VARIOUS ON GOING PROJECTS, WHEREAS THE ASSESSEE HAS NOT SHOWN ANY WORK IN PROGRESS. ON CROSS VERIFYING THE BILL REGISTER FOR THE PERIOD 1 ST APRIL 2007 TO 30 TH APRIL 2007, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS RAISED BILL S OF ` 84,07,964, IN THE MONTH OF MARCH 2007, WHICH CONSISTS OF THE BILL FOR AN AMOUNT OF ` 47,92,500, RAISED ON DIAGEO INDIA PVT. LTD., ON 13 TH APRIL 2007. IN VIEW OF THE AFORESA ID FACTS, THE A SSESSING OFFICER WAS OF THE OPINION THAT THE UNBILLED PORTION OF THE WORK RELATING TO VARIOUS PROJECTS EXECUTED DURING THE RELEVANT PREVIOUS YEAR WAS REQUIRED TO BE ACCOUNTED FOR BY THE ASSESSEE AS WORK IN PROGRESS. SINCE , THE ASSESSEE HAS N OT DONE SO, THE ASSESSING OFFICER TREATED THE SALES OF ` 47,92,500, ACCOUNTED FOR BY THE ASSESSEE IN APRIL 2007, AS THE UNACCOUNTED VALUE OF WORK IN PROGRESS FOR THE IMPUGNED ASSESSMENT YEAR AND ACCORDINGLY, ADDED BACK TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED WITH SUCH ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. 4 . IN THE COURSE OF HEARING BEFORE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE FURNISHED VARIOUS DOCUMENTARY EVIDENCES TO DEMONSTRATE THAT THE AMOUNT OF ` 47,9 2,500 WAS NEITHER BILLED NOR ACCRUED AS INCOME IN THE IMPUGNED ASSESSMENT YEAR. ON THE BASIS OF SUBMISSIONS MADE AND EVIDENC ES PRODUCED BY THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. AFTER CONSIDERING THE REMAND REPORT FURNISHED BY THE ASSESSING OFFICER AS WELL AS THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF F ACTS AND MATERIAL ON RECORD, LEARNED COMMISSIONER (APPEALS) OBSERVED THAT NOT ONLY THE AMOUNT OF ` 47,92,500, WAS BILLED BY THE ASSESSEE IN APRIL 2007, I.E., FINANCIAL YEAR 2007 08, BUT THE ASSESSEE HAS ALSO OFFERED IT AS INCOME IN ASSESSMENT YEAR 2008 09. HE OBSERVED , THE SAID INCOME HAS AL SO BEEN ASSESSED AT THE HANDS OF THE ASSESSEE IN THE ASSESSMENT YEAR 2008 09. HE OBSERVED , SINCE THE RATE OF TAX ON THE INCOME ASSESSED AT THE HANDS OF THE ASSESSEE IS SAME BOTH FOR ASSESSMENT YEAR 2007 08 AND 2008 09 , IT WILL NOT AFFECT THE INTEREST OF RE VENUE. FURTHER, HE OBSERVED , IF THE INCOME OF ` 47,92,500, IS ASSESSED IN THE IMPUGNED ASSESSMENT YEAR, THE SAID AMOUNT HAS TO BE EXCLUDED FROM THE INCOME OF THE ASSESSEE IN ASSESSMENT YEAR 2008 09. THEREFORE, FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN CIT V/S EXCEL INDUSTRIES LTD., [2013] 358 ITR 295 (SC) AND THE DECISION OF THE HONBLE DELHI HIGH COURT IN CIT V/S VISHNU INDUSTRIAL 5 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. GASSES PVT. LTD., ITR NO.229/1988, DAED 6 TH MAY 2008, AS WELL AS THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH C OURT IN CIT V/S NAGRI MILLS CO. LTD., [1958] 33 ITR 681, LEARNED COMMISSIONER (APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 5 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELYING UPON THE OBSERVATIONS OF THE ASSESSING OFFICER SUBMITTED , SINCE THE MAJOR PORTION OF THE WORK WAS COMPLETED IN THE IMPUGNED ASSESSMENT YEAR , IT SHOULD HAVE BEEN SHOWN AS WORK IN PROGRESS IN THE ACCOUNTS OF THE ASSESSEE AND OFFERED AS INCOME. HE SUBMITTED , WITHOUT OFFERING THE INCOME IN TH E ASSESSMENT YEAR WHEREI N IT ACCRUED, THE ASSESSEE HAS DEFERRED IT TO THE NEXT ASSESSMENT YEAR. THEREFORE, HE SUBMITTED , THE ASSESSING OFFICER WAS JUSTIFIED IN ADDING THE AMOUNT TO THE INCOME OF THE ASSESSEE. 6 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE ASSESSEE IS PROV IDING CONSULTANCY SERVICES, HENCE, THERE CANNOT BE ANY WORK IN PROGRESS. IN ANY CASE OF THE MATTER, H E SUBMITTED , THE BILL FOR THE SERVICES RENDERED WAS RAISED IN APRIL 2007, THE ASSESSEE HAS CORRECTLY OFFERED IT TO TAX IN ASSESSMENT YEAR 2008 09 AND THE A SSESSING OFFICER HAS ALSO ASSESSED IT AS INCOME IN ASSESSMENT YEAR 2008 09. HE SUBMITTED , THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE ASSESSEE HAS OFFERED THE UNBILLED AMOUNT OF ` 47,92,500, AS INCOME IN 6 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. ASSESSMENT YEAR 2008 09. THAT BEING THE CASE, TH E SAME AMOUNT CANNOT BE TAXED IN TWO ASSESSMENT YEARS SINCE IT AMOUNTS TO DOUBLE ASSESSMENT OF THE SAME INCOME. HE SUBMITTED , SINCE THE TAX RATE AT WHICH THE INCOME IS ASSESSED IN ASSESSMENT YEAR 2007 08 AND 2008 09 IS SAME, THERE IS NO PREJUDICE CAUSED TO THE REVENUE AND THERE IS ABSOLUTELY NO EFFECT ON THE REVENUE IF IT IS TAXED IN ASSESSMENT YEAR 2008 09 INSTEAD OF ASSESSMENT YEAR 2007 08. IN THIS CONTEXT, HE RELIED UPON THE DECISIONS OF THE HON'BLE SUPREME COURT IN CIT V/S EXCEL INDUSTRIES LTD. (SUPRA) AND OTHER DECISIONS REFERRED TO BY THE LEARNED COMMISSIONER (APPEALS). THUS, HE SUBMITTED , THERE IS NO NEED TO DISTURB THE OR DER OF LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS RELIED UPON. IT IS EVIDENT FROM THE FACTS AND MATERIAL ON RECORD THAT THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION PURELY ON THE REASONING THAT THE BILL DATED 18 TH APRIL 2007, RAISED BY THE ASSESSEE ON DIAGEO INDIA PVT. LTD., FOR THE AMOUNT OF ` 47,92,500, S HOULD HAVE BEEN ACCOUNTED FOR BY THE ASSESSEE AS WORK IN PROGRESS FOR THE IMPUGNED ASSESSMENT YEAR AND OFFERED TO TAX. HOWEVER, THE ASSESSING OFFICER HAS NOT DISPUTED THE FACT THAT THE AFORESAID AMOUNT REMAINED UNBILLED IN ASSESSMENT YEAR 2007 08 AND BILL FOR THE SAID AMOUNT WAS RAISED BY 7 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. THE ASSESSEE ON 18 TH APRIL 2007, I.E., I N THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2008 09. IT IS ALSO NOT DISPUTED BY THE DEPARTMENT THAT THE AMOUNT IN DISPUTE WAS NOT ONLY OFFERED AS INCOME BY THE ASSESSEE IN ASSESSMENT YEAR 2008 09, BUT IT WAS ALSO ASSESSED AT THE HANDS OF THE ASSESSEE IN THE SAID ASSESSMENT YEAR. THIS FACT HAS NOT ONLY BEEN VERIFIED BY THE LEARN ED COMMISSIONER (APPEALS) IN COURSE OF PROCEEDINGS BEFORE HIM BUT ON A QUERY FROM THE BENCH, THE LEARNED AUTHORISED REPRESE NTATIVE HAS FURNISHED BEFORE US RELEVANT DOCUMENT ARY EV IDENCES WHICH DEMONSTRATE THAT NOT ONLY THE ASSESSEE HAS OFFERED THE DISPUTED AMOUNT AS INCOME IN ASSESSMENT YEAR 2008 09, BUT HAS ALSO CLAIMED THE CORRESPONDING TDS IN THE SAID ASSESSMENT YEAR. IT IS ALSO A FACT ON RECORD THAT THE TAX RATE FOR ASSESSMENT YEAR 2007 08 AND 2008 09 ARE THE SAME. THAT BEING THE CASE, WHETHER THE AMOUNT IS TAXED IN THE IMPUGNED ASSESSMENT YEAR OR IN ASSESSMENT YEAR 2008 09, WILL HAVE NO E FFECT ON THE REVENUE. ON THE CONTRARY, IF THE AMOUNT IS TAXED IN THE IMPUGNED ASSESSMENT YEAR, IT HAS TO BE EXCLUDED FROM THE INCOME OF THE ASSESSEE IN ASSESSMENT YEAR 2008 09 , SINCE , IT HAS ALREADY BEEN ASSESSED IN THAT ASSESSMENT YEAR. THIS IS DUE TO THE SETTLED LEGAL PRINCIPLE THAT THE SAME INCOME CANNOT BE ASSESSED IN TWO ASSESSMENT YEARS. 8 . ON E MORE INTERESTING FACT RELATING TO THE IMPUGNED ADDITION 8 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. WHICH HAS COME TO OUR NOTICE IS, AS PER THE FACTS NARRATED BY THE ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT ORDER, IN THE MONTH OF APRIL 2007, THE ASSESSEE HAD RAISED A NUMBER OF BILLS TOTAL ING TO ` 84,07,964=28. WHEREAS, OUT OF THOSE BILLS, THE ASSESSING OFFICER HAS PICKED UP ONLY ONE BILL RAISED ON 18 TH APRIL 2007, TO DIAGEO INDIA PVT. LTD. FOR THE AMOUNT OF ` 47,92,500, WHILE IGNORING REST OF THE BILLS RAISED IN APRIL 2007. EVEN TWO OTHER BILLS RAISED BY THE ASSESSEE ON DIAGEO INDIA PVT. LTD. ON 18 TH APRIL 2007 AND 23 RD APRIL 2007, HAVE BEEN IGNORED BY THE ASSESSING OFFICER. WE DO NOT FIND ANY RATIONAL E / LOGIC BEHIND SUCH SELECTIVE APPROACH OF THE ASSESSING OFFICER. BE THAT AS IT MAY, SINC E THE AMOUNT IN DISPUTE HAS ALREADY BEEN OFFERED AS INCOME BY THE ASS ESSEE IN ASSESSMENT YEAR 2008 09 AND ASSESSED TO TAX, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF THE FIRST APPELLATE AUTHORITY ON THE ISSUE. GROUND RAISED IS DISMISSED. 9 . IN GROUND NO.2, THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF ` 17,66,393, MADE BY THE ASSESSING OFFICER. 10 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, ON VERIFYING THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE , THE ASSESSING OFFICER NOTICING THAT AN AMOUNT OF ` 31,84,59,835, HAS BEEN SHOWN AS PROFESSIONAL FEE RECEIVED , CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS OF PROFESSIONAL FEE RECEIVED ALONG WITH ITS NATURE. ON VERIFYING 9 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. THE INFORMATION FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS PASSED REVERSAL ENTRIES IN RESPECT OF INCOME ALREADY ACCOUNTED FOR ON EARLIER DATES. HOWEVER, HE WAS OF THE VIEW THAT A NUMBER OF REVERSAL ENTRIES COULD NOT BE CO RELATED / RECONCILED BY THE ASSESSEE. ACCORDINGLY, HE CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE UN RECONCILED DIFFERENCE OF ` 80,94,715, SHOULD NOT BE ADDED AS INCOME. THOUGH, THE ASSESSEE OBJECTED TO THE PROPOSED DISALLOWANCE, HOWEVER, REJECTING THE EXPLANATION OF THE ASSESSEE , THE ASSESSING OFFICER ADDED BACK TH E AMOUNT OF ` 80,94,715. THE ASSESSEE CHALLENGED THE AFORESAID DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHORITY. 11 . IN COURSE OF PROCEEDINGS BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE FURNISHED SOME MORE MATERIAL RECONCILING THE DIFFERENCES POINTED OUT BY THE ASSESSING OFFICER. ON THE BASIS OF SUBMISSI ONS MADE AND EVIDENCES FILED, LEARNED COMMI SSIONER (APPEALS) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. AFTER VERIFYING THE REMAN D REPORT AND CONSIDERING THE SUBMISSIONS OF THE AS SESSEE IN THE CONTEXT OF FA CTS AND MATERIALS ON RECORD, LEARNED COMMISSIONER (APPEALS) OBSERVED THAT OUT OF THE DIFFERENCE OF ` 80,94,715, POINTED OUT BY THE ASSESSING OFFICER, THE ASSESSEE COULD RECONCILE / CO RELATE THE DIFFERENC E OF ` 17,66,983 AND COULD NOT CO 10 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. RELATE / RECONCILE THE REVERSAL OF ENTRIES FOR AN AMOUNT OF ` 54,00,000 IN RESPECT OF RUCHI SOYA INDUSTRIES LTD. THUS, HE SUSTAINED DISALLOWANCE TO THE EXTENT OF ` 63,28,322. 12 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMIT TED , SINCE THE ASSESSEE COULD NOT RECONCILE THE DIFFERENCES POINTED OUT BY THE ASSESSING OFFICER , THE ADDITION MADE SHOULD HAVE BEEN SUSTAINED . IN THIS CONTEXT, HE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT. 13 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE DEPARTMENT SHOULD NOT HAVE ANY GRIEVANCE SINCE LEARNED COMMISSIONER (APPEALS) AFTER VERIFYING THE FACTUAL DETAILS HAS FOUND THAT THERE IS NO DIFFERENCE / DISCREPANCY WITH REGARD TO T HE AMOUNT OF ` 17,66,393. FURTHER, HE SUBMITTED , SINCE THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE, NO DISALLOWANCE COULD BE MADE. 14 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, THE ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF ` 80,74,715 DUE TO FAILURE ON THE PART OF THE ASSESSEE TO CO RELATE THE REVERSAL OF ENTRIES, H OWEVER, BEFORE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE HAS FILED FRESH 11 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. MATERIAL RECONCILING THE DIFFERENCES POINTED OUT BY THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE REMAND REPORT, THE SUBMISSIONS MADE BY THE ASSESSEE AND EVIDENCES FILED WAS SATISFIED THAT THE ASSESSEE HAS PROPERLY RECONCILED / CO RELATE D THE REVERSAL OF ENTRIES FOR AN AMOUNT OF ` 17,66,393. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT BROUGHT BEFOR E US ANY MATERIAL TO CONTROVERT THE FACTUAL FINDING OF THE LEARNED COMMISSIONER (APPEALS) INSOFAR AS IT RELATES TO THE AMOUNT OF ` 17,66,393. THEREFORE, TO THAT EXTENT WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS). GROUND RAISED IS DISMISSED . 15 . IN GROUND NO.3, THE DEPARTMENT HAS CHALLENGED VIOLATION OF RULE 46A OF T HE INCOME TAX RULE, 1963, BY LEARNED COMMISSIONER (APPEALS). 16 . WE HAVE CONSIDERED RIVAL CONTENTIONS ON THE ISSUE AND PERUSED MATERIAL ON RECORD. IT IS EVIDENT FROM THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER (APPEALS), EVERY SINGLE PIECE OF EVIDENCE FURNISHED BY THE ASSESSEE IN THE COURSE OF APPEAL PROCEEDINGS WERE SENT FOR VERIFICATION / EXAMINATION OF THE ASSESSING OFFICER AND THE ASSESSING OFFICER AFTER VERIFYING THE SE EVI DENCES HA S FURNISHED A REMAND REPORT. THE REMAND REPORT FURNISHED BY THE ASSESSEE WAS 12 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. TAKEN NOTE OF BY THE LEARNED COMMISSIONER (APPEALS) WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE. THEREFORE, IT IS EVIDENT , LEARNED COMMISSIONER (APPEALS) HAS STRICTLY COMPLIED TO THE PROVISIONS OF RULE 46A OF THE RULES INSOFAR AS IT RELATES TO ADMISSION OF ADDITIONAL EVIDENCE. THEREFORE, WE DO NOT FIND MERIT IN THE GROUND RA ISED. ACCORDINGLY, IT IS DISMISSED. 17 . IN GROUND NO.4, THE REVENUE HAS CHALLENGED DELETION OF ADDITION OF ` 72,34,00 MADE ON ACCOUNT OF DISALLOWANCE OF DELOITTE TOUCHE TOHMATSU ( DTT ) SUBSCRIPTION. 18 . BRIEF FACTS ARE, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ` 72,34,000 TO THE PROFIT & LOSS AC COUNT ON ACCOUNT OF PAYMENT TOWARDS DTT SUBSCRIPTION. WHEN THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN THE NATURE OF EXPENDITURE AND JUSTIFY THE CLAIM OF DEDUCTION , IT WAS SUBMITTED BY THE ASSESSEE THAT THE SAID AMOUNT REPRESENTIN G DTT SUBSCR IPTION WAS ASSESSEES SHARE IN THE EXPENSES COMPRISING OF ` 55,75,396, BEING DTT SUBSCRIPTION AND ` 16,59,189, BEING DTT TECHNOLOGY SUBSCRIPTION. IT WAS SUBMITTED , THERE ARE SEVERAL ADVANTAGES IF ONE BECOMES MEMBER OF THE SAID SUBSCRIPTION AS IT CAN USE TH E DELOITTE BRAND, HENCE, HELPS IN DEVELOPING IN GOOD BRAND IMAGE AND CONSEQUENTLY GETTING MORE BUSINESS. IT WAS SUBMITTED BY 13 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. THE ASSESSEE THAT SINCE THE EXPENDITURE INCURRED WAS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS IT HAS TO BE ALLOWED AS EXP ENDITURE UNDER SECTION 37(1) OF THE ACT. THE ASSESSING OFFICER, HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE. HE OBSERVED , BY CONTRIBUTING TOWARDS DTT SUBSCRIPTION, THE ASSESSEE HAS DERIVED ENDURING BENEFIT, THEREFORE, THE EXPENDITURE IS OF CAPITAL NATURE. ACCORDINGLY, HE DISALLOWED ASSESSEES CLAIM. THE ASSESSEE CHALLENGED THE AFORESAID DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHORITY. 19 . THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD AS WELL AS THE REMAND REPORT FURNISHED BY THE ASSESSING OFFICER OBSERVED THAT THE EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR ENABLING THE PROFIT MAKING STRUCTURE TO WORK MORE EFFICIENTLY . HE OBSERVED , SUBSCRIPTION MADE BY TH E ASSESSEE FOR FINE TUNING BUSINESS OPERATION TO ENABLE THE MANAGEMENT TO RUN ITS BUSINESS EFFECTIVELY, EFFICIENTLY AND PROFITABLY LEAVING THE FIXED ASSET UNTOUCHED , WOULD BE IN THE NATURE OF REVENUE EXPENDITURE. FURTHER, THE LEARNED COMMISSIONER (APPEALS) OBSERVED , SINCE SIMILAR PAYMENT MADE TOWARDS DTT SUBSCRIPTION WAS NOT DISALLOWED IN ANY OF THE EARLIER OR SUBSEQUENT ASSESSMENT YEARS , IT SHOULD NOT BE DISALLOWED IN THE 14 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. IMP UGNED ASSESSMENT YEAR. ACCORDINGLY, HE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 20 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELYING UPON THE OBSERVATIONS OF THE ASSESSING OFFICER SUBMITTED , SINCE THE ASSESSEE HAS PAID THE DTT SUBSCRIPTION FOR AVA ILING A BRAND I T IS A CAPITAL EXPENDITURE AS THE ASSESSEE W OULD BE DERIVING ENDURING BENEFIT. THUS, HE SUBMITTED , THE DEDUCTION CLAIMED BY THE ASSESSEE CANNOT BE ALLOWED. 21 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , ASSESSEE MAKES THE DTT SUBSCRIPTIO N ANNUALLY ON THE BASIS OF TURNOVER ACHIEVED. HE SUBMITTED , NEITHER IN ANY EARLIER ASSESSME NT YEAR NOR IN THE SUBSEQUENT ASSESSMENT YEAR SUCH DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER THOUGH THE ASSESSEE HAS BEEN CONTRIBUTING TOWARDS THE DTT SUBSCRIPT ION. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE ASSESSMENT ORDERS PASSED UNDER SECTION 143(3) OF THE ACT IN RESPECT OF ASSESSMENT YEARS 2006 07, 2009 10, 2010 11 AND 2011 12. HE SUBMITTED , THOUGH , THE ASSESSING OFFICER DISALLOWED THE DTT SUBSCRIPTION IN ASSESSMENT YEAR 2008 09 ALSO, HOWEVER, LEARNED COMMISSIONER (APPEALS) DELETED SUCH DISALLOWANCE. THUS, HE SUBMITTED , APPLYING RULE OF CONSISTENCY ALSO, ASSESSEES CLAIM HAS TO BE ALLOWED. WITHOUT PREJUDICE T O THE AFORESAID SUBMISSIONS, LEARNED 15 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. AUTHORISED REPRESENTATIVE SUBMITTED , IN ANY CASE OF THE MATTER, THE ASSESSE E HAS NOT ACQUIRED ANY BRAND BUT HAS MADE SUBSCRIPTION FOR UTILIZING IT. THEREFORE, IT CANNOT BE SAID THAT THE AMOUNT PAID BY THE ASSESSEE IS A CAPITAL EXPENDITURE INCURRED FOR ACQUIRING A BRA ND FOR GOODWILL. IN SUPPORT OF SUCH CONTENTION, HE RELIED UPON THE FOLLOWING DECISIONS: I ) DCIT, V/S HINDUSTAN ZINC LTD., [1972] 84 ITR 277 (SC); AND II ) HARRISONS MALAYALAM LTD. V/S ACIT, [2008] 19 SOT 363 (COCHIN) 22 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. IT IS OBSERVED THAT THE ASSESSEE HAS BEEN PAYING THE DTT SUBSCRIPTION ANNUALLY FOR UTILIZING THE DELOITTE BRAND ALONG WITH CERTAIN TECHNOLOGY. THERE IS NOTHI NG ON RECORD TO SUGGEST THAT A SSESSEE HAS ACQUIRED THE B RAND OR THE TECHNOLOGY FOR GOOD . THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS INCURRED THE EXPENDITURE FOR ACQUIRING AN ASSET OF ENDURING BENEFIT. ON THE CONTRARY, AS RIGHTLY OBSERVED BY THE LEARNED COMMISSIONER (APPEALS), T HE ASSESSEE HAS PAID THE SUBSCRIPTION TO RUN AND MANAGE ITS BUSINESS ACTIVITY MORE EFFECTIVELY, EFFICIENTLY AND PROFITABLY. MOREOVER, IT IS A FACT ON RECORD THAT SIMILAR SUBSCRIPTION WAS PAID BY THE ASSESSEE IN THE PRECEDING AS WELL AS SUCCEEDING A SSESSMEN T YEARS. NOTABLY, ON VERIFYING THE SCRUTINY ASSESSMENT ORDER S PASSED UNDER SECTION 143(3) OF THE ACT FOR THE 16 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. ASSESSMENT YEAR S 2006 07, 2009 10 AND 2010 11 AND 2011 12, COPIES OF WHICH HAVE BEEN SUBMITTED BEFOR US , IT IS OBSERVED THAT NO SUCH DISALLOWANCE W AS MADE BY THE ASSESSING OFFICER IN THE AFORESAID ASSESSMENT YEAR S . THERE BEING NO DIFFERENCE IN FACTS BROUGHT TO OUR NOTICE IN THE IMPUGNED ASSESSMENT YEAR, APPLYING THE RULE OF CONSISTENCY ALSO, THE EXPENDITURE CLAIMED BY THE ASSESSEE HAS TO BE ALLOWED , SINCE , THE NATURE OF EXPENDITURE AS REVENUE HAS BEEN ACCEPTED BY THE DEPARTMENT IN ALL OTHER ASSESSMENT YEARS EXCEPT THE IMPUGNED ASSESSMENT YEAR. THAT BEING THE CASE, WE UPHOLD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUND RAISED IS DISMISSED. 23 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.6787/MUM./2014 ASSESSEES APPEAL 24 . THE ONLY ISSUE IN ASSESSEES APPEAL RELATES TO DISALLOWANCE OF ` 63,28,322, OUT OF THE PROFESSIONAL FEES. 25 . FACTUAL ASPECT RELATING TO THE AFORESAID ISSUE HAS ALREADY BEEN DISCUSSED HEREIN BEFORE WHILE DECIDING GROUND NO.2 OF ITA NO.6489/ MUM./2014. AS COULD BE SEEN, OU T OF THE TOTAL DISALLOWANCE OF ` 80,94,715, MA DE BY THE ASSESSING OFFICER, LEARNED COMMISSIONER (APPEALS) HAS SUSTAINED DISALLOWANCE OF ` 63,28,322. THE AFORESAID 17 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. AMOUNT BASICALLY REPRESENTS A BILL RAISED TO RUCHI SOYA INDUSTRIES LTD. ON 28 TH SEPTEMBER 2006 TOWARDS PROFESSIONAL SERVICES FOR ACQUISITION OF TARGET BRAND AND OTHER RELATED SERVICES. IT IS THE CONTENT ION OF THE LEARNED AUTHORISED REPRESENTATIVE BEFORE US THAT THIS BILL WAS RAISED WRONGLY MENTIONING THE AMOUNT OF ` 67,34,400 INSTEAD OF ` 6,73,440. HE SUBMITTED , AFTER NOTICING THE MISTAKE THE ASSESSEE REVERSED THE ENTRY IN THE BOOKS OF ACCOUNT AND ISSUED A CREDIT NOTE TO RUCHI SOYA INDUSTRIES LTD. ON 5 TH OCTOBER 2006 FOR THE AMOUNT OF ` 67,34,400 AND SUBSEQUENTLY ON 6 TH OCTOBER 2006, ISSUE A FRESH BILL TO RUCHI SOYA INDUSTRIES LTD. FOR AN AMOUNT OF ` 6,73,440. THUS, HE SUBMITTED , THE DIFFERENCE WAS DUE TO A CLERICAL ERROR WHICH WAS SUBSEQUENTLY RECTIFIED. THEREFORE, HE SUBMITTED , THE DISALLOWANCE SHOULD BE DELETED. 26 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER ON THIS ISSUE. 27 . W E HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. IT IS EVIDENT, AFORESAID ADDITION WAS SUSTAINED BY LEARNED COMMISSIONER (APPEALS) BASICALLY FOR THE REASON THAT THE FAILED TO LEAD PROPER EVIDENCE TO RECONCILE THE REVERSAL OF ENTRIES. IT APPEARS, BEFORE LEARNED COMMISSIONER (APPEALS) ALSO ASSESSEE HAD PLEADED THAT DUE TO TYPOGRAPHICAL ERROR THE AMOUNT OF RS.6,00,000 WAS MENTIONED AS RS.60,00,000 BY PUTTING AN EXTRA ZERO. IT ALSO NEEDS TO BE OBSERVED, 18 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. THE ASSESSEE HAS ENCLOSED IN THE PAPER BOOK A CREDIT NOTE ISSU ED IN FAVOUR OF RUCHI SOYA INDUSTRIES LTD FOR RS.67,34,400 AS WELL AS BILL RAISED SUBSEQUENTLY FOR RS.6,73,440 TO PROVE ITS CLAIM. HOWEVER, THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY ACCOUNT CONFIRMATION FROM RUCHI SOYA INDUSTRIES LTD. THEREFORE, I N OUR VI EW, THE CLAIM OF THE ASSESSEE HAS TO BE CROSS VERIFIED BY MAKING NECESSARY ENQUIRY WITH RUCHI SOYA INDUSTRIES LTD. THAT BEING THE CASE, WITHOUT EXPRESSING ANY OPINION ON THE MERITS OF THE ISSUE, WE RESTORE IT TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. 28 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 29 . TO SUM UP, DEPARTMENTS APPEAL IS DISMISSED AND ASSESSEES APPEAL I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 19 DELOITTE TOUCHE TOHMATSU INDIA P. LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI