ITO 9(2)(1), MUMBAI V. BENTEL ASSOCIATES REALTY DESIGN CONSULTANTS P.LTD, MUMBAI

ITA 7102/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5757 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 14-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN
• Assessee Lawyers: KARTHIK NATARAJAN
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANESH , AM ITA NO. 7102 / MUM/20 1 7 ( ASSESSMENT YEAR : 2012 - 13 ) DY. COMMISSIONER OF INCOME TAX 9(2)(1), ROOM NO.665A, 6 TH FLOOR AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020 VS. M/S. BENTAL ASSOCIATES REALITY DESIGN CONSULTANTS PVT. LTD.,A - 401, BUSINESS SQUARE SOLITAIRE CORPORATE BANK , ANDHERI EAST MUMBAI - 93 PAN/GIR NO. AACCB7588D ( APPELLANT ) .. ( RESPONDENT ) REVENUE BY SHRI MOHAMMED RIZWAN A SSESSEE BY SHRI KARTHIK NATARAJAN DATE OF HEARING 24 / 01 /201 9 DATE OF PRONOUNCEMENT 30 / 01 /201 9 / O R D E R PER M. BALAGANESH (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF CIT(A) - 16, MUMBAI DATED 1 5/04/2015 FOR A.Y.2012 - 13 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE I.T. ACT. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS.95,71,853/ - ON ACCOUNT OF SUCCESS FEE PAID T O ICS REALTY PVT. LTD., IN THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO. 7102/MUM/2017 M/S. BENTAL ASSOCIATES REALTY 2 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS ENGAGED INTO PROVIDING ARCHITECTURAL CONSULTANCY IN PROPERTY DEVELOPMENT, PROJECT CONCEPT, DEVELOPMENT PLANNING, CONCEPT DESIGN AN D IMPLEMENTATION, INTERIOR MARKET AND DEVELOPMENT DESIGN, GRAPHIC DESIGN, RETAIL STORE PLANNING AND DESIGN AND OTHER SERVICES INCIDENTAL TO REALTY DESIGN CONSULTANCY. THE LD. AO OBSERVED IN HIS ASSESSMENT ORDER THAT ON PERUSAL OF NOTE NO.21 ANNEXED TO THE FINANCIAL STATEMENTS IN THE YEAR UNDER CONSIDERATION , THAT ASSESSEE DURING THE YEAR HAD CLAIMED TO HAVE INCURRED A SUM OF RS.95,71,853/ - ON ACCOUNT OF SUCCESS FEE UNDER THE HEAD OPERATING COST. THE ASSESSEE STATED THAT THE SAID SUM WAS PAID TO ICS REA LTY PVT. LTD., THE LD. AO STATED IN HIS ORDER THAT THIS ISSUE WAS SUBJECT MATTER OF ADJUDICATION AT LENGTH U/S.143(3) PROCEEDINGS FOR A.Y.2011 - 12 WHEREIN THE SAME WAS DISALLOWED. FOLLOWING THE SAID ORDER, LD. AO DISALLOWED THE SAID SUM DURING THE YEAR UNDE R APPEAL ALSO. 4. THE LD. CIT(A) APPRECIATED THE FACTS OF THE ASSESSEE THAT THE FACTS IN A.Y.2011 - 12 WERE DIFFERENT FROM THE FACTS IN A.Y.2012 - 13 AND APPRECIATED THE COMPLETE DETAILS OF THE EXPENSES TOWARDS SUCCESS FEE INCURRED BY THE ASSESSEE FURNISHED F OR A.Y.2012 - 13. SINCE THESE DETAILS AND SUBMISSIONS WERE NOT FILED BEFORE THE LD. AO, THE LD. CIT(A) SOUGHT FOR A REMAND REPORT FROM THE LD. AO W ITH A REQUEST TO LD. AO TO CONDUCT NECESSARY ENQUIRIES U/S.133(6) OR SECTION 131 OF THE ACT IN ORDER TO VERIFY THE GENUINENESS OF THE CLAIM MADE BY THE ASSESSEE. ITA NO. 7102/MUM/2017 M/S. BENTAL ASSOCIATES REALTY 3 5. THE LD. CIT(A) OBSERVED THAT THE LD. AO HAS CONDUCTED NECESSARY ENQUIRIES U/S.133(6) FOR DETERMINING THE GENUINENESS OF THE CLAIM OF THE ASSESSEE AND SUBMITTED THE REMAND REPORT DATED 06/09/2017. BASED ON THE REMAND REPORT OF THE LD. AO, THE LD. CIT(A) DELETED THE DISALLOWANCE OF RS.95,71,853/ - . AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. DR VE HEMENTLY RELIED ON THE ORDERS OF THE LD. AO. THE LD. AR STA TED THAT THE DISALLOWANCE WAS MADE BASED ON THE FINDINGS RECORDED ON SIMILAR ISSUE IN ASSESSEES OWN CASE FOR A.Y.2011 - 12 BY THE LD. AO. HE FAIRLY STATED THAT THE SAID ISSUE HAD TRAVELLED UPTO THIS TRIBUNAL IN A.Y.2011 - 12 AND THIS TRIBUNAL IN ITA NO.4077/M UM/2015 DATED 06/04/2018 HAD REMANDED THE ISSUE TO THE FILE OF LD. AO. THE LD. AR ALSO PLACED ON RECORD THE ORDER PASSED BY THE LD. AO DATED 01/08/2018 GIVING EFFECT TO THE SAID TRIBUNAL ORDER. IN THE SAID ORDER, THE LD. AO HAD GRANTED RELIEF OF SUCCESS FE E TO THE TUNE OF RS. 63,50,442/ - . HENCE THE ENTIRE FINDING GIVEN BY THE LD. AO IN HIS ORIGINAL ASSESSMENT ORDER FOR THE YEAR UNDER APPEAL WHICH IN TURN WAS BASED ON FINDING OF THE A.Y.2011 - 12 GETS NULLIFIED BY THE SUBSEQUENT ORDER PASSED BY THE LD. AO ON 0 1/08/2018. IN ANY CASE, WE ALSO FIND THAT THE LD. AO FOR THE YEAR UNDER APPEAL I.E., A.Y.2012 - 13 IN THE REMAND REPORT DATED 06/09/2017 AFTER CONDUCTING NECESSARY ENQUIRIES U/S.133(6) OF THE ACT TO VERIFY THE GENUINENESS OF THE CLAIM OF THE ASSESSEE AND THE SERVICES RENDERED BY ICS REALTY PVT. LTD IN THE ENTIRE GAMUT OF TRANSACTIONS WARRANTING THE ASSESSEE TO MAKE PAYMENT OF SUCCESS FEES TO ICS REALTY ITA NO. 7102/MUM/2017 M/S. BENTAL ASSOCIATES REALTY 4 PVT. LTD., HAD OBSERVED THAT ALL THE PARTIES INVOLVED IN THE SUBJECT MENTIONED TRANSACTION HAVE DULY CONFIRM ED AND FILED THEIR RESPONSE TO NOTICE U/S.133(6) OF THE ACT. THE RELEVANT OBSERVATIONS OF THE LD. AO IN HIS REMAND REPORT DATED 06/09/2017 A RE REPRODUCED BELOW: - 8. IN RESPONSE OF THE NOTICE U/S.133(6), THE ICS REALTY AND ALL OTHER PARTIES HAVE FILED THEI R SUBMISSIONS IN RESPONSE OF NOTICE U/S.133(6) OF THE IT ACT AND THE SAME ARE FORWARDED TO YOU (ANNEXURE - II. 9. THE REMAND REPORT IS ACCORDINGLY SUBMITTED. THESE MAY, HOWEVER, BE FURTHER EXAMINED BY YOUR GOODSELF FOR ADJUDICATION ON MERITS. 7. FROM THE ABOVE, IT COULD BE SEEN THAT THE LD. AO HAD NOT DRAWN ANY ADVERSE INFERENCE IN HIS REMAND REPORT AGAINST REPLIES FILED IN RESPONSE TO NOTICE U/S.133(6) OF THE ACT. HENCE, IT COULD BE SAFELY CONCLUDED THAT HE HAS GOT NOTHING ADVERSE TO STATE IN THIS REGARD. THE LD. DR COULD NOT CONTROVERT THIS FACT BEFORE US. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) GRANTING RELIEF TO THE ASSESSEE IN THIS REGARD. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 / 01 /201 9 SD/ - ( MAHAVIR SINGH ) SD/ - ( M. BALAGANESH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 30 / 01 /201 9 KARUNA SR. PS ITA NO. 7102/MUM/2017 M/S. BENTAL ASSOCIATES REALTY 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//