M/S. WIN WIN AUTOMOBILES PVT. LTD., Bhopal V. THE ACIT 3(1), Bhopal

ITA 774/IND/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6237 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 11-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: R K MANGAL
• Keywords: Opportunity of being heard; Corroborative evidences

Judgement Text

WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO.774/IND/2014 A.Y.2010-11 WIN WIN AUTOMOBILES PVT. LTD. BHOPAL ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX 3(1) BHOPAL ::: RESPONDENT APPELLANT BY SHRI R.K. MANGAL RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 1.3. 201 6 DATE OF PRONOUNCEMENT 1 8 . 4 .201 6 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A)-II, BHOPAL, DATED 9.9. 2014. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS AN AUTHORISED DISTRIBUTOR OF MAHINDRA AND MAHINDRA LTD. IT WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 2 IS ENGAGED IN THE TRADING AND SERVICING OF MAHINDRAS VEHICLES INCLUDING OLD VEHICLES ALSO. IT HAS SHOWROOM S AT MISROD AND RAISEN ROAD. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS ALSO STATED TO BE AN AUTHORISED DISTRIBUTOR OF TATA TELESERVICES LIMITED F OR MARKETING OF MOBILE HANDSETS, RECHARGE VOUCHERS, SIM CARDS AND OTHER ALLIED PRODUCTS HAVING WORKSHOPS AT MISROD AND GOVINDPURA, BHOPAL. RETURN DECLARING INCOME AT RS.49,61,500/- WAS FILED ON 15.10.2010 BUT THE ASSESSING OFFICER MADE THE ASSESSMENT AT AN INCOME OF RS.82,57,601/- AFTER MAKING CERTAIN ADDITIONS. 3. GROUND NOS. 1 AND 2 TAKEN BY THE ASSESSEE ARE GENE RAL IN NATURE AND AS SUCH REQUIRE NO ADJUDICATION. 4. GROUND NO. 3 IS THAT THE AUTHORITIES BELOW HAVE ERR ED IN MAKING AND SUSTAINING THE ADDITION OF RS. 1,30,000/- ON ACCOUNT OF INTEREST PAID WITHOUT DEDUCTION OF TAX. WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 3 5. THE FACTS, IN BRIEF, ARE THAT ON EXAMINATION OF RECOR D, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE DID NOT MAKE ANY TDS IN RESPECT OF INTEREST PAYMENT OF RS.1,30,00 0/- CLAIMED TO HAVE BEEN MADE TO MAHINDRA & MAHINDRA FINANCIAL SERVICES LIMITED. THE ASSESSING OFFICER ACCORDINGLY MADE THE DISALLOWANCE OF RS.1,30,000/- U/S 40(A)(I) OF THE ACT. ON APPEAL, THE LEARNED CIT(A) CONF IRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS NOT FILED ANY SUPPORTING EVIDENCE IN SUPPORT OF ITS CLAIM. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 6. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE INTEREST PAID BY THE ASSESSEE COMPAN Y HAS BEEN DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS O F THE RECIPIENT COMPANY AND AS SUCH IT WOULD AMOUNT TO DOUBLE TAXATION. ON THE OTHER HAND, THE LEARNED DR RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW. WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 4 7. WE HAVE HEARD BOTH THE SIDES. AFTER CONSIDERING TH E ARGUMENTS OF THE PARTIES IN THE WAKE OF THE FACTS OF TH E CASE, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE GI VEN ONE MORE OPPORTUNITY TO PROVE ITS CLAIM. WE, THEREF ORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DECID E THE SAME DE NOVO AFRESH AFTER AFFORDING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND PROVING ITS CASE. 8. GROUND NO. 4 IS THAT THE LOWER AUTHORITIES HAVE ERR ED IN MAKING AND SUSTAINING THE ADDITION OF RS.19,68,871/- ON ACCOUNT OF UNRECONCILED ENTRIES APPEARING IN STATEME NT 26AS AS ALSO IN NOT GIVING CREDIT OF TDS APPEARING IN T HE SAME STATEMENT 26AS. 10. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE HAS BEEN RECTIFIED BY THE ASSESSING OFFICER BUT NO DOCUMENT HAS BEEN PRODUCED WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 5 BEFORE. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO VERIFY THE SAME AND MAKE ASSESSMENT ACCORDINGLY. 11. GROUND NO. 5 IS THAT THE LEARNED AUTHORITIES BELO W HAVE ERRED IN MAKING AND CONFIRMING ADDITION OF RS.1,36,098/- OUT OF RS. 7,32,202/- ON ACCOUNT OF P RIOR YEAR EXPENSES AS THESE EXPENSES HAVE BEEN CRYSTALISED DURING THE YEAR ONLY. 12. ON PERUSAL OF P&L ACCOUNT OF THE ASSESSEE THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS DEBITED A TOTAL SUM OF RS. 7,32,2020/- AS PERIOD EXPENSES . TH E ASSESSING OFFICER OBSERVED THAT THESE PRIOR PERIOD EXPENSES ARE NOT ALLOWABLE DURING THE CURRENT PREVIOUS YEAR 2009 -10 BECAUASE THE ASSESSEE HAS FOLLOWED MERCANTILE SYSTEM OF ACCOUNTING AND THE EXPENSES DO NOT RELATE TO THE INCOM E EARNED DURING THE PREVIOUS YEAR RELEVANT TO THE ASSES SMENT YEAR 2010-11. THE LEARNED ASSESSING OFFICER, THEREFOR E, DISALLOWED THE SAME AND ADDED IT TO THE TOTAL INCOME OF THE WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 6 ASSESSEE. ON APPEAL, THE LEARNED LEARNED CIT(A) CONFIRM ED THE SAME BY OBSERVING THAT THE AMOUNT OF RS.7,32,2020/ - PERTAINS TO PRIOR PERIOD EXPENSES AS MENTIONED IN THE ASSESSEES P&L ACCOUNT. HE ALSO OBSERVED THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS BEEN REGULARLY FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. 13. WE HAVE HEARD BOTH THE SIDES. AFTER CONSIDERING T HE ORDERS OF THE AUTHORITIES BELOW AND THE SUBMISSIONS O F THE PARTIES, WE FIND THAT THERE IS NO PROVISION IN THE IN COME TAX ACT FOR ALLOWANCE OF RENT ON PAYMENT BASIS. WE, THEREFORE, FIND NO FLAW IN THE ORDERS OF THE AUTHORI TIES BELOW AND CONFIRM THE SAME. 14. GROUND NO. 6 IS THAT THE AUTHORITIES BELOW ERRED IN MAKING ADDITION OF RS. 1,21,330/- ON ACCOUNT OF BUSIN ESS PROMOTION EXPENSES ALLEGING THAT TDS HAS NOT BEEN DEDUCTED. WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 7 15. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PAID AN AMOUNT OF RS.1,21,330/- TO NAMDHARI ASSOCIATES (DEEP MELA) UNDER THE HEAD BUSINESS PROMOTION BUT D ID NOT DEDUCT TAX AT SOURCE ON THIS PAYMENT. THE ASSES SING OFFICER, THEREFORE, ADDED BACK THIS AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. 16. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE FACT REGARDING PAYMENT OF RS. 1,21,330/- TO M/S NAMDHARI ASSOCIATES ON ACCOUNT OF STALL ESTABLISHED AT DEEP MELA AN D NO DEDUCTION OF TDS THEREON IS FOUND UNDISPUTED. W E, THEREFORE, FIND NO FLAW IN THE ORDERS OF THE AUTHORI TIES BELOW AND DISMISS THIS GROUND OF APPEAL. 17. GROUND NO. 7 IS THAT THE AUTHORITIES BELOW HAVE ER RED IN MAKING AND CONFIRMING THE ADDITION OF RS.81,911/- O N ACCOUNT OF AD HOC DEDUCTION FROM EXPENSES ON PRINTING AND STATIONARY. WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 8 18. WE HAVE HEARD BOTH THE SIDES. THE ASSESSING OFFI CER MADE THE ADDITION OF RS.81,911/- FOR 10% DISALLOWANCE O F PRINTING AND STATIONARY EXPENSES ON THE GROUND THAT MAJORITY OF EXPENSES HAVE BEEN INCURRED IN CASH AND NO T VERIFIABLE. THE LEARNED CIT(A) CONFIRMED THE SAME. 19. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES , WE ARE OF THE VIEW THAT SINCE PAYMENTS ARE NOT VERIFIABLE, THEREFORE, THE AUTHORITIES BELOW HAVE RIGHTLY DISALLO WED THE CLAIM OF THE ASSESSEE. WE, THEREFORE, DISMISS THIS GR OUND OF THE ASSESSEE. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 18 TH APRIL, 2016 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 18 TH APRIL, 2016 DN/- WIN WIN AUTOMOBILES PVT. LTD ITA NO. 774/IND/2014 9