DEPUY MEDICAL P.LTD, MUMBAI V. ADDL CIT RG 6(2), MUMBAI

ITA 736/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75810 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 18-11-2013
• Assessment Year: misc
• Appeal Filed On: 25-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV JAIN
• Assessee Lawyers: KIRIT KAMDAR; PRANAY GANDHI
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI , / ! ! ! ! ' . . # . . !$ , % BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER /. ITA NO. 736/MUM/2011 $& $& $& $& !'& !'& !'& !'& / ASSESSMENT YEAR: 2006-07 M/S. DEPUY MEDICAL PVT. LTD. JOHNSON HOUSE, 64-66, SENAPATI BAPAT MARG, MAHIM MUMBAI-400 016 $ $ $ $ / VS. ADDL CIT RG 6(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI. ( () / APPELLANT) ( *+() / RESPONDENT) PERMANENT ACCOUNT NO. :- AACCD 4595 J $&,- . / ASSESSEE BY : SHRI KIRIT KAMDAR & SHRI PRANAY GANDHI ! / . / REVENUE BY : SHRI SANJEEV JAIN 0 / O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-12, MUMBAI DATED 11.10.2010 FOR THE ASSES SMENT YEAR 2006-07. 2. GROUND NO. 1 IS NOT PRESSED BY THE ASSESSEE AND HENCE THE SAME DOES NOT REQUIRE ANY ADJUDICATION. 3. IN GROUND NO. 2, THE ASSESSEE HAS AGITATED THE A CTION OF THE LD.CIT(A) UPHOLDING THE DISALLOWANCE MADE BY THE AO ON ACCOUN T OF SALES PROMOTION AND ADVERTISEMENT EXPENSES AMOUNTING TO RS.78,24,986/-. $! / - / DATE OF HEARING : 20.02.2014 12' / - / DATE OF PRONOUNCEMENT : 26.02.2014 ITA NO. 736/MUM/2011 M/S. DEPUY MEDICAL PVT. LTD. ASSESSMENT YEAR: 2006-07 2 3.1 BRIEFLY STATED, THE RELEVANT FACTS ARE THAT DUR ING THE ASSESSMENT FRAMED, THE AO NOTICED THAT THE ASSESSEE DEBITED IN THE P/L ACC OUNT, AN AMOUNT OF RS.78,24,986/- AS DEPUY A&SP PROV ON ACCOUNT OF S ALES PROMOTION AND ADVERTISEMENT EXPENSES AS THE LAST ITEM IN THE LIST . ACCORDING TO THE AO, THE SAID DEBIT DID NOT CONTAIN ANY DATE NOR WAS THE NATURE O F THE EXPENSES EXPLAINED BY THE ASSESSEE. THE ASSESSEE STATED BEFORE THE AO THAT TH E NUMBER OF PARTIES AND THE EXPENSES INVOLVED WERE NUMEROUS AND THEREFORE, THE RECONCILIATION OF THE PROVISION OF THE EXPENSES VIS--VIS THE ACTUAL BILLS/INVOICES WAS VERY TEDIOUS PROCESS AND HENCE NOT IN A POSITION TO FURNISH THE EXACT DETAIL S AND RECONCILIATION OF THE PROVISION OF THE EXPENSES MADE DURING THE FINANCIAL YEAR RELE VANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. HAVING NOT SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSESSEE, THE AO DISALLOWED THE SAID EXPENDITURE AN D BROUGHT THE SAME TO TAX FOR THE WANT OF DETAILS AND SUPPORTING EVIDENCES. ON AP PEAL, THE LD.CIT(A) UPHELD THE SAID DISALLOWANCE AS THE ASSESSEE HAD CLAIMED THAT THE EXPENSE DEBITED WAS UNDER ESTIMATED BASIS ONLY AND AS SUCH NO BILLS ETC. WERE AVAILABLE AT THE POINT OF TIME. IN ADDITION, THE LD.CIT(A) OBSERVED THAT THE EXPENSES RELATED TO THE ADVERTISEMENT, THE ASSESSEE WAS REQUIRED TO DEDUCT TDS. ACCORDINGLY, T HE LD.CIT(A) CONFIRMED THE SAID DISALLOWANCE. AGGRIEVED BY THE IMPUGNED DECISION, T HE ASSESSEE HAS RAISED THIS GROUND IN THE APPEAL BEFORE US. 3.2 HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD, IT IS PERTINENT TO MENTION THAT DURING THE COURSE OF THE PROCEEDINGS, LD.AR OF THE ASSESSEE HAS PRODUCED THE DETAILS OF PAYMENT MADE F OR SALES PROMOTION AND THE ADVERTISEMENT EXPENSES OUT OF PROVISION CREATED ON 31.03.2006 TO SUPPORT THE CLAIM THAT THE SAID EXPENSES ARE ALLOWABLE DEDUCTION UNDE R THE PROVISIONS OF THE INCOME TAX ACT. HOWEVER, IT IS OBSERVED THAT THE AO AND TH E LD.CIT(A) HAS MADE /CONFIRMED THE DISALLOWANCE MAINLY ON THE GROUND TH AT THE ASSESSEE IS NOT BEING IN A POSITION TO PRODUCE THE DETAILS OF EXPENDITURE. CON SIDERING THE ENTIRE FACTUAL MATRIX ON THIS ISSUE, WE ARE OF THE CONSIDERED OPINION THA T IT IS JUST AND PROPER TO REMIT THE THE ISSUE TO THE FILE OF THE AO TO EXAMINE THE MATE RIALS ON THE DETAILS OF THE EXPENDITURE AND ACCORDINGLY PASS AN APPROPRIATE ORD ER AFRESH IN ACCORDANCE WITH LAW ITA NO. 736/MUM/2011 M/S. DEPUY MEDICAL PVT. LTD. ASSESSMENT YEAR: 2006-07 3 AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. WE DIRECT AND ORDER ACCORDINGLY. GROUND NO. 2 ALLOWED FOR STATISTICAL PURPOSE. 4. GROUND NO. 3 AND 4 ARE CONSEQUENTIAL IN NATURE A ND THE SAME DO NOT REQUIRE ANY ADJUDICATION. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 0 / 12' 3$ 26 TH 4! , 201 4 2 / 5 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF FEBRUARY, 2014. SD/- SD/- ( / RAJENDRA ) ( ' ' ' ' . . # # # # . . !$ !$ !$ !$ / DR. S.T.M. PAVALAN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /MUMBAI, 3$ /DATED: 26.02.2014. $ . ./ P.S.*SRIVASTAVA COPY TO: () / THE APPELLANT *+() / THE RESPONDENT 7 8 / THE CIT, CONCERNED, MUMBAI 7 8 / THE CIT(A) CONCERNED, MUMBAI 9!:5 *-$ /THE DR D BENCH 5 & ; / GUARD FILE. +9- *- //TRUE COPY// 0$ / BY ORDER < / = DY/ASSTT. REGISTRAR, , / ITAT, MUMBAI.