DCIT 15(3)(2), MUMBAI V. UNIMERS INDIA LTD, NAVI MUMBAI

ITA 727/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0163 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 11-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 727/MUM/2016 ASSESSMENT YEAR: 2010 - 11 DCIT - 15(3)(2), ROOM NO. 451, 4 TH FLOOR, AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI - 400020. VS. M/S UNIMERS INDI A LTD. D - BLOCK, THANE BELAPUR ROAD, TURBHE NAVI MUMBAI - 400705 PAN NO. AAACU8716C APPELLANT RESPONDENT REVENUE BY : MR. RAM TIWARI, DR ASSESSEE BY : NONE DATE OF HEARING : 30/11 /2017 DATE OF PRONOUNCEMENT : 26/02/2018 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE REVENUE . THE RELEVANT ASSESSMENT YEAR IS 2010 - 11. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 24, [IN SHORT CIT(A)] MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE SOLE GROUND RAISED BY THE REVENUE IS THAT THE LD. CIT(A) ERRED (I) IN ALLOWING THE PLEA OF THE ASSESSEE THAT DISALLOWANCE MADE WAS EXCESSIVE AND ASSESSEE HAS NOT STOPPED ITS BUSINESS, (II) IN NOT M/S UNIMERS INDIA ITA NO. 727/MUM/2016 2 APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO REVIV E THE BUSINESS IN SUBSEQUENT SIX YEARS AND THE ASSESSEE HAS FAILED TO FILE FULL DETAILS OF EXPENSES DURING THE ASSESSMENT PROCEEDINGS 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER (AO) MADE A DISALLOWANCE OF EXPENSES OF RS.63,59, 624/ - AND SALES COMMISSION OF RS.66,31,301/ - . IN APPEAL THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF RS.66,31,701/ - MADE BY THE AO TOWARDS SALES COMMISSION. HOWEVER, HE ALLOWED THE GROUND OF APPEAL OF THE ASSESSEE AGAINST THE DISALLOWANCE OF EXPENSES OF RS .63,59,624/ - . THE REVENUE IS IN APPEAL AGAINST THE ABOVE ORDER OF THE LD. CIT(A) ALLOWING EXPENSES OF RS.63,59,624/ - . THE AO OBSERVED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE FAILED TO FILE DOCUMENTARY EVIDENCE WITH REGARD TO VARIOUS EXPENSES AGGREGATING TO RS.1,27,19,248/ - CONSISTING OF SALARY, WAGES, & BONUS OF RS.41,69,127/ - , PROPERTY TAX OF RS.20,22,444/ - , SECURITY CHARGES OF RS.12,20,000/ - , LEGAL & PR OFESSIONAL FEES OF RS.16,21,664/ - BESIDES OTHER MINOR EXPENSES. THE AO MADE A DISALLOWANCE OF RS.63,59,624/ - [50% OF RS.1,27,19,248/ - ]. IN APPEAL, THE LD. CIT(A) HELD AS UNDER: ON TOTALITY OF FACTS, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT COMPANY HAD NOT STOPPED ITS BUSINESS AND HAD TO PAY SALARY WAGES, SE CURITY SERVICE CHARGES, LEGAL AND PROFESSIONAL FEES TO KEEP BUSINESS APPARATUS IN A RUNNING CONDITION AND THE LD. AO NOT HAVING FOUND ANY DISCREPANCY IN THE VOUCHERS OR DETAILS, IT COULD NOT BE SAID THAT THE EXPENSES ARE NOT GENUINE OR NOT FOR THE PURPOSE OF BUSINESS. ACCORDINGLY, I DO NOT AGREE TO THE ACTION OF M/S UNIMERS INDIA ITA NO. 727/MUM/2016 3 THE LD. AO IN DISALLOWING 50% OF THE SAID EXPENDITURE. IN ANY CASE, THE APPELLANT HAD ITSELF ADDED BACK RS.20,22,444/ - ON ACCOUNT OF PROPERTY TAX NOT PAID U/S 43B AND THEREFORE, THE GROUNDS RAISED H AVE TO BE ALLOWED IN FAVOUR OF THE APPELLANT. 4. BEFORE US, THE LD. DR SUPPORTS THE ORDER OF THE AO MAKING A DISALLOWANCE OF EXPENSES OF RS.63,59,624/ - . N ONE APPEARED ON BEHALF OF THE ASSESSEE. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS ON RECORD. WE FIND THAT THE LD. CIT(A) HAS RIGHTLY ARRIVED AT A FINDING THAT THE ASSESSEE ITSELF HAS ADDED BACK RS.20,22,444/ - ON ACCOUNT OF PROPERTY TAX NOT PAID U/S 43B. FURTHER, THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT THE AO HAS NOT FOUND ANY DISCREPANCY IN THE VOUCHERS AND OTHER DETAILS. AS THE DISALLOWANCE MADE BY THE AO IS BASED ON ESTIMATE , WITHOUT ANY PROPER REASONING, WE UPHOLD THE ORDER OF THE LD. CIT(A). 6. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2018. SD/ - SD/ - (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 26/02/2018 RAHUL SHARMA, SR. P.S. M/S UNIMERS INDIA ITA NO. 727/MUM/2016 4 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