BELIM ELECTROMAC INDUSTRIES, MUMBAI V. INCOME TAX OFFICER 13(2)(1) (NOW ASSESSED WITH 17(1)(2), MUMBAI

ITA 900/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1210 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 14-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 900 / MUM/ 201 8 ( / ASSESSMENT YEAR: 20 11 - 12 ) BELIM ELECTROMAC INDUSTRIES C/O M/S. SDBA & CO. CHARTERED AC COUNTANTS 601, A WING, AURUSU CHAMBERS, BEHIND MAHINDRA TOWERS, S.S. AMRUTWAR MARG, WORLI, MUMBAI - 40001 . / VS. ITO 13(2)(1), MUMBAI NOW ASSESSED WITH 17(1)(2), MUMBAI. ROOM NO. 116, AAYKAR BHAVAN, M.K. ROAD, CHURCHG ATE, MUMBAI - 400020. ./ ./ PAN/GIR NO. : AAAFB 8885 A ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 13 . 1 1 .201 8 / DATE OF PRONOUNCEMENT : 27.11. 2018 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 20 . 11 .201 7 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 28 , MUM BAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 11 - 1 2 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - REVENUE BY : NONE ASSESSEE BY: SHRI AVINASH MEHTA (AR) ITA. NO. 900 M/201 8 A.Y. 2011 - 12 2 (I) THE ORDER PASSED BY THE LD. CIT(A) - 28 MUMBAI CONFIRMING THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE IT. ACT, 1961 BY THE ASSESSING OFFICER, IS BOTH BAD IN LAW AND BAD IN FACTS. DISALLOWANCE OF MANAGEMENT TRAINING & DEVELOPMENT EXPENSES RS.11,18,231/ - 2.0 THE LD. CIT(A) ERRED IN - (A) CONFIRMING THE DISALLOWANCE MADE BY THE AO OF MANAGEMENT TRAINING AND DEVELOPMENT EXPENSE S OF RS.11,18,231/ - AND (B) CONFIRMING THE FINDING OF THE AO THAT THESE EXPENSES WERE PERSONAL EXPENSES OF PARTNER AND WERE NOT INCURRED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTER OR RAISE ADDITIONA L GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 30.09.2011 DECLARING TOTAL INCOME TO THE TUNE OF RS.16,92,060/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. TH EREAFTER, T HE CASE WAS SELECTED FOR SCRUTINY AND N OTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE CLAIM OF THE A SSESSEE IN CONNECTION WITH THE MANAGEMENT T RAINING & DEVELOPMENT E XPENSES TO THE TUNE OF RS. 11,18,231/ - WAS DISALLOWED AND THE INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.28,10,290/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4 . WE HAVE HEAR D THE ARGUMENT AND ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE ISSUES RAISED BEFORE US IS IN CONNECTION WITH THE DISALLOWANCE OF MANAGEMENT TRAINING & DEVELOPMENT EXPENSES TO THE TUNE OF RS.11,18,231/ - . AT THE VERY OUTSET, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE SIMILAR CLAIM HAS BEEN DISCUSSED AND DECIDED BY THE HONBLE ITAT IN THE ASSESSEES OWN CASE IN ITA. NO. 498/M/2014 FOR THE A.Y. 2010 - 1 1 DATED 09 .0 3 .201 8 IN ITA. NO. 900 M/201 8 A.Y. 2011 - 12 3 WHICH THE IS SUES HAS BEEN REMANDED BEFORE AO TO DECIDE AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCO RDANCE WITH LAW AND ACCORDINGLY, T HE LD. REPRESENTATIVE OF THE ASSESSEE HAS REQUESTED TO REMAND THE ISSUE BEFORE THE AO. BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADV ERT THE FINDING OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE IN ITA. NO.498/M/2014 FOR THE A.Y. 2010 - 11 ON RECORD: - 8. WE HAVE HEARD BOTH THE PARTIES AT LENGTH ON THIS APPLICATION MOVED BY THE ASSESSEE FOR SEEKING ADMISSION OF ADDITIONAL EVIDENCE. AS PE R THE FACTS CONTAINED IN THE APPLICATION, IT IS SUBMITTED BY LEARNED A.R. THAT SHRI HIMANSHU PARIHAR PRIOR TO HIS STUDIES AND TRAINING WAS WORKING WITH THE ASSESSEE AS AN EMPLOYEE FOR A SALARY OF `10,000/ - PER MONTH. IT IS FURTHER SUBMITTED LOOKING AT HIS CALIBRE AND INTELLIGENCE, A SPONSORSHIP AGREEMENT WAS ENTERED INTO WITH HIM AND AS PER THE AGREEMENT HE WAS SENT FOR HIGHER EDUCATION AND TRAINING TO USA AND THEREFORE THESE EXPENSES WERE BORNE BY THE FIRM PROVIDED THAT ON COMPLETION OF HIS TRAINING HE WOU LD RETURN TO INDIA AND WORK WITH THE ASSESSEE FOR A MINIMUM PERIOD OF FIVE YEARS. IT IS FURTHER SUBMITTED IN THE APPLICATION THAT SHRI HIMANSHU PARIHAR, AFTER HIS TRAINING, AS PER THE TERMS OF AGREEMENT HAS JOINED THE ASSESSEE FIRM. IT WAS ALSO SUBMITTED T HAT TAKING INTO ACCOUNT HIS QUALIFICATIONS, SKILLS AND EXPERIENCE ACQUIRED BY HIM SUBSEQUENT HIS HIGHER EDUCATION AND TRAINING HE HAS BEEN IN EMPLOYMENT AT REMUNERATION WHICH IS MUCH LOWER THAN REMUNERATION THAT HE WOULD HAVE FETCHED OTHERWISE FROM OTHER E MPLOYERS. A CHART SHOWING COMPARISON OF REMUNERATION THAT HE WOULD HAVE FETCHED FROM OTHER EMPLOYERS AND ACTUAL SALARY DRAWN FROM THE ASSESSEE IS ENCLOSED AT PAGE NO. 5 OF THE PAPER BOOK. THE REMUNERATION THAT HE WOULD HAVE FETCHED FROM OTHER EMPLOYERS IS DULY SUPPORTED BY OFFER LETTERS FROM E - PACE TECHNOLOGIES (ENCLOSED AT PAGE NOS. 6 & 7 OF PAPER BOOK) AND HGST INC (PAGES 8 TO 10 OF PAPER BOOK). IN ORDER TO SUPPORT THE CONTENTIONS CONTAINED IN THE APPLICATION, THE LEARNED A.R. SUBMITTED THAT ADMISSION OF THE AFORESAID ADDITIONAL EVIDENCES WOULD NOT, IN ANY WAY PREJUDICE THE REVENUE, RATHER IT WOULD RENDER ASSISTANCE TO THE TRIBUNAL TO DISPOSE OFF THE APPEAL IN ACCORDANCE WITH LAW. THE LEARNED A.R. ALSO RELIED UPON CERTAIN JUDGEMENTS MENTIONED IN THE APPLIC ATION. 9. HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS THE CONTENTIONS CONTAINED IN THE APPLICATION AND AFTER HEARING THE RIVAL CONTENTIONS, WE ARE OF THE VIEW THAT THE DOCUMENTS NOW BEING RELIED UPON BY THE ASSESSEE BY WAY OF ADDITIONAL EV IDENCES GO TO THE ROOT OF THE CASE AND IN ANY CASE NO PREJUDICE IS CAUSED TO THE REVENUE. ITA. NO. 900 M/201 8 A.Y. 2011 - 12 4 THEREFORE , THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE ARE ADMITTED. 10. SINCE WE HAVE ALREADY ADMITTED THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND ADMITTED LY THESE EVIDENCES WERE NOT BEFORE THE AO AT THE TIME OF FRAMING THE ASSESSMENT, THEREFORE THE MATTER IS RESTORED BACK TO THE FILE OF THE AO TO VERIFY THE ADDITIONAL EVIDENCES AND DECIDE THE ISSUE AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 8. IN VI EW OF THE ABOVE MENTIONED ORDER, THE ISSUE IN CONNECTION WITH THE DISALLOWANCE MANAGEMENT TRAINING & DEVELOPMENT EXPENSES HAS BEEN RESTORED BEFORE THE AO FOR FRESH CONSIDERATION , THEREFORE, WE ALSO SET ASIDE THE FINDING OF THE CIT (A) ON THIS ISSUE AND REMAND THE ISSUE BEFORE THE AO TO DECIDE THE MATTER OF CONTROVERSY AFRESH I N VIEW OF THE SIMILAR GUIDELINE AS DIRECTED BY HONBLE ITAT IN THE ASSESSEES OWN CASE IN ITA. NO. 498/M/2014. ACCORDINGLY, WE SET ASIDE THE FINDING OF THE CIT( A) ON THIS ISSUE AND RESTORED THE ISSUE BEFORE THE AO TO DECIDE THE MATTER AFRESH ACCORDINGLY . ACCORDINGLY, ALL THE ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE . 6 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 27. 11. 2018 . SD/ - SD/ - ( R. C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 27. 11. 2018 VIJAY ITA. NO. 900 M/201 8 A.Y. 2011 - 12 5 / 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