Brightpoint India Private Limited, New Delhi V. ACIT, Central Circle-20, New Delhi

ITA 8992/DEL/2019

AI Insights

The case involves Bright Point India Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) - XX XI, New Delhi, concerning the disallowance of communication expenses for the Assessment Year 2016-17. The assessee had claimed these expenses as deductible under Section 37 of the Income Tax Act, 1961, but failed to provide adequate substantiation during the scrutiny assessment and subsequent appeal. The Tribunal noted that the invoices provided did not substantiate the claim of communication expenses, and there was no matching of payment amounts with the expense bills. Consequently, the Tribunal dismissed the appeal, agreeing with the lower authorities' findings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121482 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-01-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 18-11-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI ANUBHAV SHARMA, JUDICIAL MEMBER I.T.A No.8992/DEL/2019 Assessment Year 2016-17 Bright Point India Pvt. Ltd., MIRA Corporate Suites, B-1 & C-1, Plot No.1 & 2, Ishwar Nagar, New Delhi. v. Assistant Commissioner of Income Tax, Central Circle-20, Delhi. TAN/PAN: AAACB6414G (Appellant) (Respondent) Assessee by: Shri Partho Das Gupta, CA Department by: Shri Kanav Bali, Sr.DR Date of hearing: 03 01 2023 Date of pronouncement: 29 03 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The capti oned appeal has been f il ed at t he i nst ance of t he assessee agai nst t he or der of t he C o mmissi oner of Inco me T ax (Appeal s) - XX XI, New Delhi [ ‘C IT( A) ’ i n short ], dated 24. 09. 2019 a ri sing f r o m t he assessme nt or der dat ed 20. 12. 2018 passed b y t he As sessi ng Of fi cer ( AO) under Secti on 143( 3) of the Inc o me Tax A ct , 1961 (t he Act ) concer nin g AY 2016-17. 2. As per t he gr ounds of appe al , the assessee seeks t o chal lenge t he disall owance of co mmuni cati on expenses amount ing t o Rs.14,66,70 7/- . 3. Br iefl y stat ed, t he assessee i s engaged in the tradi ng of I.T.As No.8992/Del/2019 2 mobi l e ha ndset s and access or ies f or vari ous brands and i n ful fi ll me nt ser vi ces for mobil e operat ors. The ret ur n of i nco me for Assess ment Year 2016- 17 i n questi on was f il ed declari ng total i nco me at Rs. 44, 53, 59, 480/-. The c ase was select ed for co mplet e scrut i n y. I n t he c ourse of scr ut i n y asses sme nt, the Assessi ng Offi ce r int er al i a n ot ed t hat assessee has ma de pr ovi si ons for communic at i on of Rs. 14, 66, 707/-. I n r esponse t o inquir y, t he asses see sub mi tt ed t ha t t he af oresai d amount i s i n the nat ure of ex penses and not pr ovi sion. H ow ever , requi si t e det ail s were n ot provi de d. The Assessi ng Of fi cer disall owed t he exp enses and adde d the same to t he t ot al inco me. 4. Aggri eved, the assessee pr ef err ed appeal bef ore the CIT( A) . The CI T( A) howeve r al so obser ved t hat t he assessee has fai l ed to substanti ate t he cl ai m. The CI T( A) int er ali a obser ved that t ax i nvoi ces of Ingr am Mi cr o I ndia Pvt . Ltd. (IMIPL) t o who m t he pa yment i s clai med to have been made does not ref er t o an y c o mmuni cat ion expenses and t here is no basi s for t he cl ai m made. The pa yme nt a mount al s o does not ma tc h wi t h t he expense bil ls. The CIT( A) th us deni ed r el ief sought . 5. Furt her aggri eved, the assessee pr ef err ed appe al bef or e the Tri bunal. 6. We ha ve hear d t he r ival su b mi ssi ons. It is t he case of t he assessee that it is a subsi di ar y co mp an y of Bri ght poi nt Holdi ngs B. V. Net herl a nds. The pa yee IMI PL is al so t he me mber of t he same gro up. In In dia, bot h assessee and I MIPL shares the co mmon space and inf rast r uctur e f aci li t y i ncludi ng some othe r I.T.As No.8992/Del/2019 3 services. IMI PL r ecover s t he cost of var i ous such faci li ti es/ ser vices fro m assessee o n a mont hl y basis, as mut uall y agr ee d. The co mmuni cati on e xpenses in quest ion are t owa rds shar ing of c ost of internet and t el eph one charges whi ch is dul y incur r ed a nd pai d t oo b y t he assessee. The expenses t hus cl ai me d are deduct ibl e expe nses under Sect ion 37 of the Act . 7. We see no mer it i n t he plea of t he assessee t owar ds substant iati on of expenses clai med. The a mount of pa yment is not shown to be ful l y matc hed. The assessee cl ai ms t o have shar ed the expenses of tel ephone et c. but however the pr oper breakup i s not avail able. No TD S has been de duct ed on the pa yment s ei t her. Si mul ta ne ousl y, it i s not show n t hat i t i s act ual rei mb urse ment of actual expe nses. It i s di ffi cult to appreci at e a ver y generic repl y to pr ovi de an y def ini t e fi ndi ng i n this regar d. In t he abse nce of an y cogent e vi dence t o t hi s effect , i t i s not possible f or us t o i nt er fer e wi th t he act ion of t he l ower aut hor it ies. We t hus decli ne t o i nt er fer e wi t h t he or der of t he CIT( A) . 8. I n t he resul t, t he appeal of t he assessee is di smi ssed. Order pronounced in the open Court on 29/03/2023. Sd/- Sd/- [ANUBHAV SHARMA] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /03/2023 Prabhat