TOSHIBRA MEDICALS P.LTD, MUMBAI V. DCIT 1(3), MUMBAI

ITA 833/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1387 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 20-12-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 18-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C S SHARMA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 833/MUM/2016 ASSESSMENT YEAR: 2011-12 M/S. TOSHBRO MEDICALS PVT. LTD., VS. DCIT 1(3) 8 MOHATTA BHAVAN, OFF DR. E MORSES R. NO. 540, 5 TH FLOOR, ROAD, WORLI, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400018 MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MIHIR NANIWADEKAR, AR REVENUE BY: SHRI C.S. SHARMA, DR DATE OF HEARING : 20/1 2/2016 DATE OF PRONOUNCEMENT: 22/12/2016 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2011-12. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER (APPEALS)-3, MUMBAI AND ARISES OUT OF ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER:- I. THE LEARNED CIT(A) ERRED IN CONFIRMING AD-HOC DISALL OWANCE TO THE EXTENT OF 10% OF STAFF WELFARE EXPENSES. HE FAILED TO APPRECIA TE THAT THE APPELLANT IS A COMPANY WITH ACCOUNTS DULY AUDITED; AND IN SUCH CIRCUM STANCES, IT IS WELL SETTLED (INCLUDING BY JURISDICTIONAL HIGH COURT AND I TAT DECISIONS) THAT NO AD-HOC DISALLOWANCE CAN BE MADE. ITA NO. 833/MUM/2016 2 II. THE LEARNED CIT(A) ERRED IN RECORDING FINDINGS PATENT LY CONTRARY TO THE RECORD. IN PARTICULAR HE HAS RECORDED CONTRARY AND MUT UALLY INCONSISTENT FINDINGS TO THE EFFECT IN PARA 3.2 THAT NO SUBMISSIO NS WERE FILED, AND IN PARA 5 HOLDING THAT MERE MAKING OF SUBMISSION IS NOT ENOUG H. HE FAILED TO CONSIDER THE CASE-LAWS SPECIFICALLY RELIED ON IN THE APPELLAN TS WRITTEN SUBMISSIONS, WHICH WERE DULY FILED IN ADVANCE OF THE HEARING BEFOR E THE CIT(A). III. REASONS ASSIGNED BY LEARNED CIT(A) ARE WRONG, INSUFFI CIENT AND CONTRARY TO LAW. 3. IN A NUTSHELL, THE FACTS ARE THAT THE ASSESSEE H AD DEBITED RS. 12,93,633/- TOWARDS REFRESHMENT EXPENSES FOR CUSTOM ERS AND STAFFS. THE ASSESSING OFFICER (AO) FOUND THAT SOME OF THE E XPENSES PERTAINING TO RS. 10,57,560/- WERE CLAIMED ON THE B ASIS OF VOUCHERS AND WERE NOT SUPPORTED BY BILLS. THEREFORE, THE AO DISALLOWED 10% OF SUCH EXPENSES WHICH WORKED OUT TO RS. 1,05,776/-. T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) WHO C ONCLUDED THAT MERE MAKING SUBMISSION IS NOT SUFFICIENT AND AS THE ASSESSEE COULD NOT SUBMIT ANY EVIDENCE IN SUPPORT / JUSTIFICATION OF CLAIM OF EXPENSES INCURRED TOWARDS STAFF WELFARE DURING THE ASSESSMENT PROCEEDINGS NOR DURING THE APPELLATE PROCEEDINGS, H E UPHELD THE DISALLOWANCE OF 10% MADE BY THE A.O. 4. THE LEARNED COUNSEL OF THE ASSESSEE RELIED ON TH E DECISION OF THE ITAT I BENCH, DELHI IN THE CASE OF WIDEX INDIA (P) LTD. VS. DCIT (2012) 66 DTR (DEL)(TRIB) 57. 5. THE LEARNED DR RELIED ON THE ORDER OF THE LEARNE D CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT IN THE CASE OF WIDEX INDIA (P) LTD. (SUPRA) , THE TRIBUNAL HAS OBSERVED THAT THE AO HAS NOT D OUBTED THE CLAIM, HE HAS MERELY MADE GENERAL OBSERVATIONS WHIL E MAKING AN ITA NO. 833/MUM/2016 3 ADHOC DISALLOWANCE HOLDING THAT THE EXTENT OF THE C LAIM IS TO BE LIMITED ON AN ESTIMATE BASIS WITHOUT REJECTING THE ACCOUNTS AND WITHOUT CARING TO POINT OUT DEFICIENCIES IN THE VOU CHERS PRODUCED. THE TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE ON T HE BASIS OF PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE. WE FI ND THAT IN THE INSTANT CASE THE ASSESSEE FAILED TO SUBMIT ANY EVID ENCE IN SUPPORT / JUSTIFICATION OF CLAIM OF EXPENSES INCURRED TOWARDS STAFF WELFARE DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO AND ALSO IN THE APPELLANT PROCEEDINGS BEFORE THE LEARNED CIT (A). IN VIEW OF THE ABOVE, THE DECISION RELIED ON BY THE LEARNED COUNSE L OF THE ASSESSEE IS DISTINGUISHABLE FROM THE INSTANT CASE. AS THE LEARN ED COUNSEL OF THE ASSESSEE FAILED TO FILE ANY EVIDENCE IN SUPPORT / J USTIFICATION OF CLAIM OF EXPENSES AS MENTIONED AT PARA 5 BY THE LEARNED C IT(A) IN HIS ORDER DATED 18.12.2015, WE UPHOLD THE DISALLOWANCE OF RS. 1,05,776/- MADE BY THE A.O. 7. IN THE NET RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/12/2016 SD/- SD/- (MAHAVIR SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED: 22/12/2016 BISWAJIT, SR. P.S. 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