ITO 9(2)(2), MUMBAI V. LAKOZY MOTORS P.TLD, MUMBAI

ITA 7004/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7926 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Keywords: Gift; Opportunity of being heard
• Section: 43B; 142(1); 14A; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G.S PANNU, AM AND SHRI AMARJIT SINGH , JM I.T.A. NO . 7004 /M/201 4 ASSESSMENT YEAR : 2010 - 11 ITO - 9(2)(2) R. NO. 225 AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 4000 20. VS. M/S. LAKOZY MOTORS P. LTD. 167, VIDHYANAGARI MARG, KALINA, SANTACRUZ (E), MUMBAI - 400098 ./ ./ PAN/GIR NO. : AAACL 1889 K (APPELLANT ) .. (RESPONDENT ) I.T.A. NO . 7087 /M/201 4 ASSESSMENT YEAR : 2010 - 11 M/S. LAKOZY MOTORS P. LTD. 167, VIDHYANAGARI MARG, KALINA, SANTACRUZ (E), MUMBAI - 400098 VS. ITO - 9(2)(2) R. NO. 225 AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 4000 20. ./ ./ PAN/GIR NO. : AAACL 1889 K ( APPELLANT ) .. ( RESPONDENT ) DATE OF HEARING : 14 .0 9 .2017 DATE OF PRONOUNCEMENT : 13.12. 2017 ASSESSEE BY: SHRI SATYA PRAKASH SINGH (AR) DEPARTMENT BY: SHRI SAURABH DESHPANDE ( DR) ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 2 O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE AS WELL AS REVENUE HA VE FILED THE ABOVE MENTIONED APPEA LS AGAINST THE ORDER DATED 12 . 09 .201 4 PASSED BY THE COMMIS S IONER OF INCOME TAX (APPEALS) - 20 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 2010 - 11 . ITA NO.7004 /M/201 4 : - 2. THE REVENUE HAS FILED THE PRESENT A PPEAL AGAINST THE ORDER DATED 12 . 09 .201 4 PASSED BY THE COMMISSIONER OF INCOME TAX ( APPEALS) - 20 MUMBAI, [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE ASSESSMENT YEAR 2010 - 11 . 3 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE INTEREST EXPENDITURE AMOUNTING TO RS.35,46,337/ - U/S 43B(E) READ WITH EXPLANATION 3D DESPITE THE FACT THAT INTEREST WAS NOT ACTUALLY PAID. 2 ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)HAS CORRECT IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE INTEREST EXPENDITURE U/S 43B BY HOLDING THAT THE SECTION APPLIES TO TERM LOAN DESPITE THE SPECIFIC AMENDMENT IN SECTION 43B(E) TO INCLUDE INTEREST ON ANY LOAN OR ADVANCES FROM SCHEDUL3ED BANK W.E.F. 01.04.2004. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 3 4 . YOUR APPELLANT CRAVES LEAVE TO ALLOW TO ADD/ALTER/AMEND/WITHDRAW ANY GROUND OF APPEAL. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 24 . 09 .2010 DECLARING TOTAL I NCOME TO THE TUNE OF RS.8,70,359 / - . THE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961. THE CASE WAS SELECTED FOR SCRUTINY, THEREFORE, THE NOTIC E U/S 143(2) OF THE ACT DATED 25 .08.2011 WAS ISSUED AND SERVED UPON THE ASSESSEE. SUBSEQUENTLY, THE NOTICE U/S 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ALSO ISSU ED AND SERVED UPON THE ASSESSEE . THE A SSESSEE IS THE DEALER OF AUTOMOBILE VEHICLES BRANDS LIKE PREMIER AND SWARAJ MAZDA, CARRYING AND RUNNING A PETROL PUMP AT URBAN AND RUNNING SERVICE CENTRE AT MUMBAI AND DELHI. THE ASSESSEE CLAIMED THE INTEREST EXPENSES TO THE TUNE OF RS.43,36,650/ - WHI CH WAS DISALLOWANCE U/S 43B(E) OF THE ACT AND ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE HAS ALSO GIVEN THE INTEREST FREE LOAN TO THE VARIOUS CORPORATE AMOUNTING TO RS.1,99,15,814/ - . THE NOTICE WAS GIVEN AND AFTER THE GETTING THE REPLY THE INTEREST TO THE TUNE OF RS. 11,41,095/ - WAS DISALLOWED IN VIEW OF THE PROVISION OF SECTION36(1)(III) OF THE ACT . THE ASSESSEE DID NOT DEDUCT TAX AT THE SOURCE U/S 40(A)(IA) OF THE ACT ON THE PAYMENT OF SALES PROMOT ION EXPENSES AMOUNTING TO RS.34,20,736/ - , WORK SHOP EXPENSES AMOUNTING TO RS.48,41,693/ - AND LEGAL & PROFESSIONAL FEES AMOUNTING TO RS.13,84,065/ - . THE NOTICE WAS ISSUED AND AFTER THE VERIFICATION OF THE CLAIM AN AMOUNT TO THE TUNE OF RS. 23,07,279/ - ON ACC OUNT OF SALES ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 4 PROMOTION EXPENSES AND THE CLAIM AMOUNTING OF RS.34,20,736/ - AND THE CLAIM AMOUNTING OF RS. 30,000/ - ON ACCOUNT ON ACCOUNT OF LEGAL AN D PROFESSIONAL FEES WAS DECLINED AND THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. DURING THE YEAR , UNDER CONSIDERATION , THE ASSESSEE EARNED THE DIVIDEND INCOME OF RS.5,68,598/ - AND LTC GAIN OF RS.10,168/ - ON ITS INVESTMENT WHICH WAS CLAIMED AN EXEMPT U/S 10(34) & 10(38) OF THE ACT RESPECTIVELY. THE ASSESSING OFFICER APPLIED THE PROVISION U/S 14A R.W. RULE 8D OF THE ACT AND DISALLOWED THE AMOUNT OF RS.4,73,551/ - AS EXPENDITURE TO EARN THE EXEMPT EARNED THE INCOME AND THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.86,92,075/ - . FEELING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) WHO ALLOWED THE CLAIM OF INTEREST EXPENDITURE TO THE TUNE OF RS. 35,46,337/ - U/S 43B(E) OF THE ACT, THEREFORE , THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1 & 2 : - 5 . UNDER THESE ISSUES THE REVENUE HAS RAISED THE QUESTION IN CONNECTION WITH THE ALLOW ABILITY OF THE CLAIM OF THE INTEREST EXPENDITURE AMOUNTING TO RS. 35,46,337/ - U/S 43B(E) OF THE ACT READ WITH EXPLANATION 3D. THE LD. REPRESENTATIVE OF THE DEPARTMENT H AS ARGUED THAT THIS ISSUE HAS ALREADY BEEN REMANDED BEFORE THE AO IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2009 - 10 BY THE HONBLE ITAT IN THE ASSESSEES OWN CASE IN ITA. NO. 6982 & 7146/M/2012 DATED 08.05.2015 , T HEREFORE, IN THE SAID CIRCUMSTANCES, THESE ISSUES ARE ALSO ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 5 REQUIRED TO THE RESTORED BEFORE THE AO TO DECIDE THE MATTER AFRESH IN ACCORDANCE WITH LAW. THE LD. REPRESENTATIVE OF THE ASSESSEE FAIRLY ADMITTED THIS FACT THAT THE HONBLE ITAT HAS REMANDED THE ISSUE BEFORE THE AO IN THE ASSESSEE S OWN CASE FOR THE A.Y. 2009 - 10 I N ITA. NO. 6982 & 7146/M/2012 VIDE ORDER DATED 08.05.2015 . THE COPY OF THE ORDER DATED 08.05.2015 IS ON THE FILE WHICH LIES AT PAGE NO.130 TO 139 OF THE PAPER BOOK. THE RELEVANT FINDING HAS BEEN GIVEN IN PARA NO. 8 OF THE ORDER DATED 08.05.2015 WHICH IS HER EBY REPRODUCED BELOW AS UNDER: - VIDE ITS TWO GROUNDS, THE REVENUE IMPUGNS THE DELETION OF DISALLOWANCE OF BANK INTEREST IN THE SUM OF RS.32,73,421/ - , REPRESENTING THE INTEREST ON CASH CREDIT ACCOUNT WITH IT/S BANK, BANK OF INDIA. THE BASIS OF THE DISALLOWANCE BY THE AO AS A READING OF HI S ORDER WOULD SHOW, IS THE NON - PAYMENT OF THE SAID SUM, WHICH STANDS CREDITED BY THE ASSESSEE IN ITS ACCOUNTS TO THE RELEVANT BANK ACCOUNT INCREASING THE BALANCE IN THE SAID ACCOUNT TO THAT EXTENT IN AS MUCH AS THE LIABILITY TO THE BANK ON ACCOUNT OF INTER EST HAD NOT BEEN REFLECTED SEPARATELY BY THE ASSESSEE IN ITS ACCOUNTS. BANK INTEREST IS A SUM SPECIFIED HOW WOULD THAT, WE WONDER, ALTER THE REVENUES CASE, I.E., EVEN ASSUMING THAT THE AO HAS CONSIDERED THE BANK INTEREST AS ON A TERM LOAN ACCOUNT WITH BANK OF INDIA, A SCHEDULED BANK. WE SAY SO AS SECTION 4311(E) IS W.E.F. 01.04.2004, I.E., A.Y. 2004 - 05 ONWARDS, APPLICABLE EQUALLY TO A TERM LOAN OF TO ANY HER LOAN/ADVANCES BY SUCH A BANK. IN FACT, IT IS THE ID. CIT(A) WHO HAS COMMITTED A TAX PASS; THE A. O. ALL THROUGH REFERRING TO A LOAN, AND NOWHERE MENTIONS THE BANK BORROWING TO BE A TERM LOAN, WHICH WE HAVE THOUGH FOUND IRRELEVANT IN VIEW OF THE LAW ID THE REVENUE'S CASE, AS ENUMERATED ABOVE. WE MAY, NEXT, DISCUSS THE ISSUE ON MERITS. THE PROVISION REA DS AS UNDER; CERTAIN DEDUCTIONS TO BE ONLY ON ACTUAL PAYMENT. 43B. NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RESPECT OF ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 6 (A) (B) (E) ANY SUM PAYABLE BY THE ASSESSEE AS INTERES T ON ANY LOAN OR ADVANCES FROM A SCHEDULED BANK IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AGREEMENT GOVERNING SUCH LOAN OR ADVANCES, OR EXPLANATION 3D FOR THE REMOVAL OF DOUBT; IT IS HEREBY DECLARED THAT A DEDUCTION OF ANY SUM, BEING INTEREST PAYA BLE UNDER CLAUSE (E) OF THIS SECTION, SHALL BE ALLOWED IF SUCH INTEREST HAS BEEN ACTUALLY PAID AND ANY INTEREST REFERRED TO IN THAT CLAUSE WHICH HAS BEEN CONVERTED INTO A LOAN OR ADVANCE SHALL NOT BE DEEMED TO HAVE BEEN ACTUALLY PAID. 8.3 A CASH CREDIT ACC OUNT OPERATES BOTH AS A LOAN (FLUCTUATING) OR ADVANCE ACCOUNT AS 11 AS A CURRENT ACCOUNT, WITH ALL THE RECEIPTS AND PAYMENTS OF THE ASSESSEE BORROWING CHANNELIZED THROUGH IT. THE, HANK, ACCORDINGLY, ALSO DEBITS ITS INTEREST TO THIS AMOUNT, INCREASING ITS B ALANCE IMMEDIATELY TO THAT EXTENT, AND WHICH THUS BECOMES PART THE LOAN/ADVANCE AMOUNT, I.E., BORROWED CAPITAL, AND ON WHICH THEREFORE IT IS ENTITLED AND CHARGES, INTEREST. THE NON - REFLECTION OF LIABILITY TOWARD HANK INTEREST BY THE ASSESSEE IN ITS ACCOUNT IS THUS) NOT AN INCORRECT REPRESENTATION OF ITS FINANCIAL POSITION. E QUESTION, HOWEVER, REMAINS AS TO HOW THE PAYMENT OF INTEREST CHARGED BY BATIK, IS TO RECKONED IN SUCH CIRCUMSTANCE, PARTICULARLY CONSIDERING EXPLANATION 3D TO SECTION, WHICH CLEARLY STA TES OF CONVERSION OF INTEREST INTO BORROWING TO BE NOT CONSTRUED AS A ACTUAL PAYMENT OF INTEREST. THE CONTROVERSY ARISES ON ACCOUNT OF NON - APPRECIATION OF FACT THAT THE PAYMENT COULD WELL BE CAUSED BY MOVEMENT OF FUNDS AS AGAINST PER ACTUAL CASH. PAYMENTS IN MODERN BUSINESS ARE RECEIVED AND MADE THROUGH CREDITS AND DEBITS IN THE BANK ACCOUNTS OF THE PAYEE AND THE PAYER. WHERE THE HANK BORROWINGS AT THE ENHANCED AMOUNT, I.E., INCLUSIVE OF THE CHARGE OF INTEREST, IS WITHIN THE DRAWING POWER, THE BANK IS DEEME D TO HAVE EXTENDED ADVANCES (I.E., ON PRINCIPAL ACCOUNT) TO THE ASSESSEE TO THAT EXTENT. AS SUCH, IT IS NOT A CASE OF CONVERSION OF INTEREST INTO HANK BORROWING BUT OF THE EARN BEING ACTUALLY PAID OUT OF BORROWED FUNDS ADVANCED BY THE BANK. THE DRAWING NEV ER IS DRAWN BY THE BANK AT DIFFERENT INTERVALS OF THE TIME ON THE BASIS OF THE FINANCIAL INFORMATION/STATEMENTS FURNISHED BY THE ASSESSES, I.E., IN PURSUANCE TO HIS OBLIGATION'S THE RELEVANT LOAN AGREEMENT, ONLY TO CONFIRM IF THE BORROWED FUNDS ARE WITHIN THE SCRIBED LIMIT/S, AND UTILISED FOR THE INTENDED PURPOSES. TO EXEMPLIFY A CASH CREDIT AMOUNT AGAINST HYPOTHECATION OF INVENTORIES OF STOCK - IN - TRADE ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 7 (SAY), STIPULATING A MARGIN 25% (SAY), WOULD THUS YIELD A DRAWING POWER (DP) OF RS.750/ - AGAINST AN INVENT ORY OF 1,000/ - I.E., RS.10O0 RS.1000 25%)THE BALANCE RS.250/ - BEING FINANCED BY THE YEAR FROM HIS OWN SOURCES. AS LONG AS, THEREFORE, THE BANK BALANCE IS WITHIN THE DRAWING WERE OF RS. 750/ - , THE PAYER CAN ONLY BE, IRRESPECTIVE OF THE NATURE OF THE CHARGES OR BITS TO ITS ACCOUNT BY THE BANK, CONSIDERED AS TOWARD THE INTENDED PURPOSE. THE SAID DEBITS STAND, IN CONSEQUENCE, PAID. IT IS ONLY WHERE THE BANK BALANCE EXCEEDS THE OF RS.7501 - , THAT THE EXCESS CAN BE CONSTRUED AS AN APPLICATION BY THE ASSESSEE FOR M ORE THAN INVENTORIES, OR AS A LIABILITY TOWARD UNPAID CHARGES, THE PAYMENT OR OTHERWISE BANK INTEREST SHALL, THEREFORE, HAVE TO BE RECKONED WITH REFERENCE TO DRAWING POWER AS THE YEAR - END DRAWN AS PER THE TERMS OF THE BORROWING AGREEMENT. THIS IS PRECISELY WHY, D ALSO EXPLAINS REFERENCE THERETO, IN SECTION 43(E). FURTHER STILL, AS THE PAYMENT, TO FOR ALLOWANCE, COULD BE VALIDLY MADE BY THE DATE OF FURNISHING THE RETURN OF COME U/S139(1), THE DRAWING POWER FOR THE FUTURE DATES MAY ALSO BE RELEVANT IN THIS SU RELY, THE DP SHOULD BE ON THE BASIS OF NORMATIVE BALANCES AND NOT CONTRIVED, WHICH IS BROUGHT DOWN ONLY TO EXHIBIT A BELOW PAR BALANCE FOR A BRIEF PERIOD) BEFORE ASSUMING ITS' NORMAL, HIGHER BALANCE. THE MATTER IS, ACCORDINGLY, RESTORED TO THE FILE OF THE AO FOR NECESSARY VERIFICATION AND TOWARDS WHICH THE ASSESSEE SHALL EXTEND COOPERATION TO ENABLE PROPER DETERMINATION OF THE MATTER BY THE FORMER, I.E., IN ACCORDANCE WITH THE LAW, KEEPING IN VIEW ITS FOREGOING ELUCIDATION. WE DECIDE ACCORDINGLY. 6 . ON AP PR AISAL OF THE ABOVE SAID FINDING IN WHICH THE CASE OF THE ASSESSEE FOR THE A.Y. 2009 - 10 ON THE SIMILAR ISSUE HAS ALREADY BEEN REMANDED BEFORE THE AO FOR FURTHER ADJUDICATION, T HEREFORE, IN THE SAID CIRCUMSTANCES, WE REMAND THIS ISSUE BEFORE THE AO TO DECIDE THE MATTER AFRESH IN VI EW OF THE ORDER DATED 08.05.2015 PASSED BY THE HONBLE ITAT, MUMBAI BENCH IN ITA. NO.6982 & 7146/M/2012. NEEDLES TO SAY THAT THE ASSESSEE WOULD PROVIDE AN OPPORTUNITY OF ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 8 BEING HEARD IN ACCORDANCE WITH LAW. ACCORDINGLY, THESE ISSUES ARE DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE. ITA NO.7087 /M/201 4 : - 7 . THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 12.09.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 20 MUMBAI, [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 2010 - 11 . 8 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF SALES PROMOTION EXPENSES OF RS.34,20,7 36/ - U/S 37(1) & 40(A)(IA) OF I.T. ACT, 1961. THE APPELLANT PRAYS THAT THE CLAIM OF THE APPELLANT BE ALLOWED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF A SUM OF RS.4,73,551/ - U/S 14A OF THE I.T. ACT, 1961. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MODIFY, SUBSTITUTE OR DELETE ANY OR ALL THE ABOVE GROUNDS OF APPEAL. 9 . THE FACTS OF THE PRESENT CASE ARE QUITE SIMILAR TO THE FACTS OF THE CASE AS DISCUSSED IN ITA. NO. 7004 /M/201 4 HEREINABOVE , T HEREFORE, THERE IS NO NEED TO REPEAT THE SAME. ISSUE NO.1: - 10 . UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF CONFIRMATION OF SALES PROMOTION EXPENSES OF RS.34,20,736/ - U/S 37(1) & 40(A)(IA) OF THE I.T. ACT, 1961. THE LD. REPRESENTATIVE OF THE ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 9 ASSESSEE HAS ARGUED THAT THE APPELLANT HAS INCOME FROM SALES AND SERVICING OF AUTOMOBILE AND AUTOMOBILE SP ARE PARTS AND SALE OF PETROL FROM THE RETAILS OUTLET OF IBP . A S PER THE NATURE OF ITS BUSINESS THE APPELLANT HAS TO INCUR SOME EXPENDITURE RELATED TO SA LES PROMOTION FOR INCREASING THEIR SALE. THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS STRONGLY RELIED UP ON THE ORDER PASSED BY THE CIT(A) ON THIS ISSUE. THE ASSESSEE HAS INCURRED VARIOUS EXPENSES WHICH IS HEREBY MENTIONED BELOW: - S.NO. PARTICULARS AMOUNT 1 AT HEAD OFFICE AMOUNT REFUND TO CONSULATE GENERAL OF RUSSIAN/T/W EXCESS AMT RECEIVED FOR BILL 131,568 PAID TOWARDS HOTEL BILLS AND OTHERS FOR THE MEETING HELDS 312,779 OTHERS 59,700 SUB TOTAL (A) 504,047 2 AT MAZDA EXPENSES INCURRED IN ORGANIZING SALES PROMOTION ACTIVITY AND DRIVES IN ORDER TO SALE THE VEHICLE(B) 211,000 3 AT AUTO SERVICE ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 10 AMOUNT PAID TO THE DRIVERS OF THE TANKER AS TIP, DIWALI GIFTS AND OTHER SMALL EXPENSES (C) 68,200 4 AT DELHI BRANCH PAID TO RAMESH CHAND AUTO SERVICES 2,307,279 OTHER SMALL EXPENSES 330,210 SUB TOTAL (D) 2,637,489 TOTAL A+ B+C+D 3,420,736 11 . IT IS ALSO ARGUED THAT THE ASSESSEE HAS PAID THE COMMISSION MORE THAN RS - 2 500/ - TO HIS AGENT RAMESHCHAND AUTOMOBILE SERVICE AND ACCORDINGLY TDS WAS AMOUNT TO THE TUNE OF RS. 2,04,320/ - WAS DEDUCTED BUT ON THE REMAINING AMOUNT THE COMMI SSION WAS PAID BELOW THE AMOUNT OF RS 2500/ - THEREFORE, THERE WAS NO LIABILITY TO DEDUCT THE TAX , HENCE, THE DISALLOWANCE IS NOT JUSTIFIABLE AND THE CLAIM OF THE ASSESSEE IS LIABLE TO BE ALLOWED. HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DE PARTMENT HAS REFUTED THE SAID CONTENTIONS. WE NOTICED THAT THE ASSESSEE HAS BIFURCATED THE EXPENSES SALES PROMOTION EXPENSES IN ACCORDANCE WITH HIS BUSINESS. THE ASSESSEE ONLY DEDUCTED THE TDS ON THE AMOUNT OF RS.2,04,320/ - PAID TO RAMESHCHAND AUTOMOBILE S ERVICE. HOWEVER, NO TDS WAS DEDUCTED ON ACCOUNT OF THE REMAINING PAYMENT TO OTHER DRIVERS. S O FAR AS THE ASSESSEE PAID THE AMOUNT LESS THAN 2,500/ - , THEREFORE, THERE WAS NO ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 11 REQUIREMENT TO DEDUCT THE TDS . THE ASSERTION OF THE ASSESSEE IS LIABLE TO VERIFIABLE, THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ISSUE IS LIABLE TO BE RESTORED BEFORE THE AO TO DECIDE THIS ISSUE AFRESH IN THE LIGHT OF THE EVIDENCE ADDUCED BY THE ASSESSEE AND BY G IVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW . ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO.2: - 12 . UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE CONFIRMATION DISALLOWANCE OF RS. 4,73,551/ - U/S 14A OF THE I.T. ACT, 1961. THE SIMILAR CLAIM OF THE ASSESSEE HAS BEEN REMANDED BEFORE THE AO WHILE DECIDING THE ISSUE IN QUESTION IN THE ASSESSEES OWN CASE FOR THE A.Y. 2009 - 10 IN ITA. NO. 6982 & 7146/M/2012 DATED 08.05.2015 . I N VIEW OF THE SAID DECISION , WE ARE OF THE VIEW THAT THIS ISSUE IS LIABLE TO DECIDED AFRESH IN THE LIGHT OF DIRECTION ISSUED BY HONBLE ITAT IN THE ASSESSEES OWN CASE IN THE ITAT IN ITA. NO. 6982 & 7146/M/2012 DATED 08.05.2015 IN ACCORDANCE WITH LAW AND AFTER GIVING A N OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW . ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ITA. NO.7004 /M/201 4 7087/M/2014 A.Y.2010 - 11 12 13 . IN THE RESULT , APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED AND APPEAL FILE D BY THE REVENUE IS HEREBY ORDERED TO BE D ISMISSED . ORDER P RONOUNCED IN THE OPEN COURT ON 13.12 . 2017 SD/ - SD/ - ( G. S. PANNU ) (AMARJIT SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 13.12 . 2017 V.P. SINGH / 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