NIELSEN INDIA) P.LTD, MUMBAI V. ASST CIT RG 5(1), MUMBAI

ITA 7195/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9657 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 02-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: KADAMBARI DAVE LD ARS
• Section: 143(3)

Judgement Text

ITA NO.7195/M/2014 NIELSEN (INDIA) PRIVATE LIMITED ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 7195/MUM/2014 ( / ASSESSMENT YEAR: 2009-10) NIELSEN (INDIA) PVT.LTD [AS SUCCESSOR TO AC NIELSEN RESEARCH SERVICES PRIVATE LIMITED] 6 TH FLOOR, BLOCK C GODREJ IT PARK, 02 GODREJ BUSINESS DISTRICT LBS MARG, PHIROJSHANAGAR VIKHROLI (W) MUMBAI 400 079 / VS. ASSISTANT COMMISSIONER OF INCOME TAX RANGE 5(1) MUMBAI ./ ./PAN/GIR NO. AADCA-0218-N ( ! /APPELLANT ) : ( '#! / RESPONDENT ) A SSESSEE BY : GIRISH DAVE & KADAMBARI DAVE, LD.ARS RE VENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 05/09/2017 / DATE OF PRONOUNCEMENT : 08/09/2017 ITA NO.7195/M/2014 NIELSEN (INDIA) PRIVATE LIMITED ASSESSMENT YEAR 2009-10 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 ASSAILS THE ORDER OF THE LD. COMMISSIONER O F INCOME-TAX (APPEALS)- 9 [CIT(A)], MUMBAI DATED 04/03/2013 QUA CONFIRMATION OF DISALLOWANCE OF RS.85.35 LACS, BEING PRIOR PERIOD EXPENSES . 2. FACTS LEADING TO THE DISPUTE ARE THAT THE ASSESS EE BEING CORPORATE ASSESSEE ENGAGED IN THE BUSINESS OF MARKET RESEARCH & LEASING OF TAM METERS WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 27/12/20 11 AT RS.1500.23 LACS AS AGAINST NIL RETURN FILED BY THE ASSESSEE ON 23/09/2009. DURING ASSESSMENT PROCEEDINGS, THE ASSE SSEE FILED COMPUTATION OF INCOME REFLECTING TOTAL INCOME OF RS .1418.86 LACS. THE SOLITARY ISSUE INVOLVED IN APPEAL IS ADDITION OF RS .85.35 LACS, BEING PRIOR- PERIOD EXPENDITURE . THE ASSESSEE EXPLAINED THAT IT FOLLOWS CONSISTENT PRACTICE OF CLOSING ITS ACCOUNTS ON 30 TH APRIL EVERY YEAR AS PER INTERNATIONAL PRACTICE OF PARENT COMPANY. THEREFORE , THE STATEMENT OF EXPENSES RECEIVED FROM VARIOUS BRANCHES / OFFICES A FTER THE CUT-OFF DATE OF 30 TH APRIL ARE ACCOUNTED FOR ONLY IN THE NEXT YEAR WHIC H GIVES RISE TO THESE PRIOR PERIOD EXPENDITURE . HOWEVER, NOT CONVINCED, LD. AO, CONSIDERING MATCHING PRINCIPAL OF ACCOUNTING, DISALLOWED THE SAME. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 04/03/2 013, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO.7195/M/2014 NIELSEN (INDIA) PRIVATE LIMITED ASSESSMENT YEAR 2009-10 3 4. THE LD. COUNSEL FOR ASSESSEE [AR]. AT THE OUTSET , DREW OUR ATTENTION TO THE FACT THAT THE ISSUE WAS CONTINUOUS IN NATURE AND STOOD COVERED IN ASSESSEES FAVOR BY THE ORDER OF THIS TR IBUNAL FOR AY 2008-09 VIDE ITA NO.2388/MUM/2012 ORDER DATED 29/05/2017. A COPY OF THE SAME HAS BEEN PLACED BEFORE US. THE LD. DR FAIRLY C ONCEDED THE SAME. 5. AFTER GOING THROUGH THE SAME, WE FIND STRENGTH I N LD. ARS ARGUMENT SINCE THE ISSUE HAS ALREADY BEEN DECIDED B Y THE CO-ORDINATE BENCH OF THE TRIBUNAL AS FOLLOWS:- 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. FACTUALLY SPEAKING, THE ASSESSEE HAS BEEN CONSISTENTLY EXPLAINING BEFORE TH E LOWER AUTHORITIES THE REASONS FOR WHICH SUCH EXPENSES HAVE BEEN DEBITED IN THE PR OFIT & LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION. IT HAS BEEN EXPLAINED THAT IT S ACCOUNTS FOR THE YEAR ENDING 31.3.2007 ARE CLOSED ON 30.4.2007, TO BE IN LINE WI TH THE PRACTICE FOLLOWED BY ITS HOLDING COMPANY IN USA AND, THEREFORE, THE BILLS/DE TAILS OF EXPENDITURE OF CERTAIN EXPENSES, WHICH PERTAIN TO 31.3.2007 ENDING, WERE R ECEIVED FROM ITS BRANCHES AFTER 30.4.2007 AND, THUS DEBITED IN THE PROFIT & LOSS AC COUNT FOR THE YEAR UNDER CONSIDERATION, I.E. ENDING ON 31.3.2008. SUCH EXPEN DITURE HAS BEEN TREATED AS A PRIOR PERIOD EXPENDITURE AND DISALLOWED. THE LEARNE D REPRESENTATIVE MADE A STATEMENT AT BAR THAT THE AFORESAID METHODOLOGY ADO PTED BY THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWED SINCE MORE THAN 15 YEARS AND THAT AFTER THE INITIAL DISALLOWANCE IN THE ASSESSMENT YEAR 1996-97, THERE HAS BEEN NO D ISALLOWANCE TILL NOW. BE THAT AS IT MAY, ONE POINT WHICH CLEARLY EMERGES IS THAT THERE IS NO DISPUTE INSOFAR AS THE NATURE OF THE EXPENDITURE IS CONCERNED, AS BEING RE LATABLE TO THE BUSINESS OF THE ASSESSEE. IT IS ALSO CORRECT THAT THE ASSESSEE IS F OLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING, SO HOWEVER, THE IMPUGNED EXPENSES MAY R ELATE TO AN EARLIER PERIOD, BUT THEY CANNOT BE SAID TO ARISE IN THE PRECEDING YEAR. QUITE CLEARLY, THE EXPENSES HAVE ARISEN AND CRYSTALLIZED DURING THE YEAR UNDER CONSI DERATION INASMUCH AS THE REQUISITE BILLS, DETAILS, ETC. HAVE BEEN RECEIVED B Y THE ASSESSEE FOR INCORPORATION IN ACCOUNTS BY ITS HEAD OFFICE DURING THE YEAR UNDER C ONSIDERATION AND, THEREFORE, THE SAME HAVE BEEN RIGHTLY ACCOUNTED FOR IN THE INSTANT YEAR. THERE IS NO CONTROVERSION TO THE ASSERTION OF THE LEARNED REPRESENTATIVE THAT SUCH PRACTICE HAS BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE AND THAT SUCH PRACTICE EVENS OUT ANY DIFFERENCE IN DEDUCTIBILITY OF THE TOTAL EXPENSES O VER A PERIOD OF TIME. CONSIDERING THE AFORESAID, WE FIND NO REASON TO DENY THE CLAIM OF ASSESSEE FOR DEDUCTION OF THE IMPUGNED EXPENDITURE. 8. BEFORE PARTING, WE MAY ALSO REFER TO THE JUDGMEN TS OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF TAPARIA TOOLS LTD., 260 ITR 10 2 (BOM) AND MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD., 225 ITR 802 (BOM), WHI CH HAVE BEEN REFERRED TO BY THE CIT(A). IN OUR CONSIDERED OPINION, THE RATIO OF THE AFORESAID DECISIONS HAVE NO RELEVANCE SO FAR AS THE INSTANT CONTROVERSY IS CONC ERNED WHICH IS REQUIRED TO BE ADJUDICATED ON THE PRINCIPLES OF CONSISTENCY AS WEL L AS ON THE BASIS OF THE YEAR OF ITA NO.7195/M/2014 NIELSEN (INDIA) PRIVATE LIMITED ASSESSMENT YEAR 2009-10 4 CRYSTALLIZATION OF LIABILITY, WHICH CLEARLY TAKES P LACE IN THE YEAR IN WHICH SUCH EXPENSES ARE BOOKED BY THE ASSESSEE. THUS, WE SET-A SIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOW ANCE OF RS.24,84,082/-. THERE BEING NO CHANGE IN FACTS OR CIRCUMSTANCES, FO LLOWING THE SAME, WE DELETE THE IMPUGNED ADDITIONS. 6. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH SEPTEMBER, 2017. SD/- SD/- (MAHAVIR SINGH) (M ANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 08. 09.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. '%- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI