Beehive Systems Private Limted, New Delhi V. ACIT, Circle-4(2), New Delhi

ITA 9436/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0950 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-10-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 08-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘A’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER ITA No.9436/Del./2019 (ASSESSMENT YEAR : 2016-17) Beehive Systems Private Ltd., vs. ACIT, Circle 4 (2), J – 202, Saket, New Delhi. New Delhi – 110 017. (PAN : AACCB0344F) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Sanjay Sood, CA REVENUE BY : Shri Jitendra Chand, Senior DR Date of Hearing : 04.10.2022 Date of Order : 13.10.2022 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of the ld. CIT (Appeals)-2, New Delhi dated 23.09.2019 for the Assessment Year 2016-17. 2. The issue raised that the ld. CIT (A) erred in confirming the addition by the Assessing Officer under section 40(a)(i) of the Income-tax Act, 1961 (for short 'the Act') of Rs.1,18,53,095/-. 3. Brief facts of the case are that assessee has incurred expenditure on export market development during the year and has made payment for ITA No.9436/Del./2019 2 sales and marketing services to a foreign individual. Such payment was made to foreign party who was not liable for TDS and disallowance under section 40(a)(i) was not done by the assessee. AO examined this issue. He mentioned that in spite of repeated requests, assessee failed to furnish Form 15CB as required under Rule 37BB. Assessee only furnished Form 15CA but did not furnish Form 15CB. Hence, AO held that the expenditure was to be disallowed in entirety due to non-deduction of TDS resulting in addition of Rs.1,18,53,095/-. 4. Apart from the above, AO also noted that the expenditure was not revenue in nature and in the alternative, he held that only 1/5 th of the expenditure is allowable. 5. Before the ld. CIT (A), assessee stated that the issue of nature of expenditure is covered by the decision of CIT (A) and ITAT in earlier years holding that this expenditure was revenue in nature. Furthermore, assessee also furnished Form 15CB before the ld. CIT (A). Ld. CIT (A) held that without any reasonable cause, assessee has not furnished necessary Form 15CB before the AO and even in the additional evidence, many pages are not legible. Hence, ld. CIT (A) did not admit the additional evidence and upheld the order of the AO. 6. Against this order, assessee is in appeal before us. We have heard both the parties and perused the record. ITA No.9436/Del./2019 3 7. Ld. Counsel of the assessee prayed that ITAT in earlier years has clearly held that the expenditure is revenue in nature. He further prayed that in the substantial interest of justice, Form 15CB may kindly be admitted and the matter be remitted to the AO in the light of the ITAT’s order in assessee’s own case and necessary forms now be furnished. 8. Per contra, ld. DR for the Revenue did not have any serious objection to this proposition. 9. Accordingly, in the interest of justice, we remit the issues to the file of AO. AO is directed to examine the additional evidences and decide the issues afresh keeping in mind the ITAT order for earlier years in assessee’s own case. The assessee is also directed to cooperate and furnish legible forms as necessary. Needless to add, assessee should be provided an opportunity of being heard. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on this 13 th day of October, 2022. Sd/- sd/- (NARENDER KUMAR CHOUDHRY) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 13 th day of October, 2022 TS ITA No.9436/Del./2019 4 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT (A)-2, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.