Mobile Telecommunications Ltd., Vadodara V. The Dy.CIT, Circle-2(1)(2), Baroda

ITA 949/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7603 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-01-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 19-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Capital asset; FORM 26AS
• Section: 43B; 143(3)

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 949/AHD/2017 ( ASSESSMENT YEAR : 2012-13) MOBILE TELECOMMUNICATIONS LTD. 5 TH FLOOR, TECHWEB CENTRE, OSHIWARA LINK ROAD, NEAR BEHRAM BAUG, JOGESHWARI WEST, MUMBAI - 400102 / VS. D.C.I.T. CIRCLE-2(1)(2), AAYKAR BHAVAN, RACE COURSE, BARODA - 390007 ./ ./ PAN/GIR NO. : AACCM2659J ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI L. P. JAIN, SR. D.R. DATE OF HEARING 27/01/2020 !'# / DATE OF PRONOUNCEMENT 29/01/2020 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-2, VADODARA (CIT(A) IN SHORT), DATED 20 .02.2017 ARISING IN THE ASSESSMENT ORDER DATED 17.03.2015 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2012-13. ITA NO. 949/AHD/17 [MOBILE TELECOMMUNICATIONS LTD. VS. DCIT] A.Y. 2012-13 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED C.I.T.(A) ERRED ON LAW AND ON FACTS IN CONFIRMING I NVOCATION OF THE SECTION 43B OF THE INCOME TAX ACT, 1961 AND THEREBY MAKING ADDITION OF RS.13,95,253 THE LEARNED A.O. FAILED TO APPRECIATE THE FACTS THA T THE SAID LIABILITY IS MAINLY CONSISTED OF SERVICE-TAX SAY RS . 13,44,743/, THE A.O. ALSO FAILED TO APPRECIATE THE FACT THAT TH E LIABILITIES IN RESPECT OF SERVICE TAX ARISES ONLY ON RECEIVING THE PAYMENT OF THE IMPUGNED SERVICES AND NOT ON CREATING LIABILITI ES IN THE BOOKS OF ACCOUNTS THE ADDITION MADE BY THE A.O. BEING UNCALLED FOR AN D UNWARRANTED YOUR APPELLANT THEREFORE IN THE INTERES T OF JUSTICE HERBY REQUEST YOU TO KINDLY DELETE THE ADDITION MAD E BY THE A.O. ON THIS COUNT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED C.I.T.(A)ERRED ON LOW AND ON FACTS IN CONFIRMING TH E ADDITION OF RS. 10,00,000/ IN RESPECT OF THE PAYMENT MODE TO M/S.MEDIA METRIX WORLDWIDE LTD. TOWARDS GETTING THE POSSESSIO N OF THE JOINTLY SHARED OFFICE PREMISES SITUATED AT ADARSH-N AGAR, ANDHERI (WEST) MUMBAI. THE LEARNED A.O. FAILED TO APPRECIATE THE FACTS THA T THE SAID PREMISE WAS JOINTLY POSSESSED BY YOUR APPELLANT WIT H M/S. MMW LTD., FROM YEARS TOGETHER. YOUR APPELLANT THEREFORE IN THE INTEREST OF JUSTICE HEREBY PRAYS THAT THE ADDITION MADE BY THE A.O. BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED C.I.T.[A)ERRED ON LAW AND ON FACTS IN CONFIRMING TH E ADDITION OF RS.1,09,418/- IN RESPECT OF DIFFERENCE BETWEEN T HE FORM 26AS AND P & L A/C. THE LEARNED A.O. FAILED TO TAKE IN TO CONSIDERATION THE RECONCILIATION SUBMITTED BY YOUR APPELLANT WITH REA SON THEREOF. YOUR APPELLANT E IN THE INTEREST OF JUSTIC E HEREBY PRAYS THAT THE A.O. BE DIRECTED TO DELETE THE ADDIT ION OF RS.1,0,418/, 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED C.I.T.(A) ERRED ON LAW AND ON FACTS IN RETAING 10% DISALLOWANCE OUT OF RS.3,33,822/ IN RESPECT OF TRAV ELLING EXPENSES ITA NO. 949/AHD/17 [MOBILE TELECOMMUNICATIONS LTD. VS. DCIT] A.Y. 2012-13 - 3 - 3. WHEN THE MATTER WAS CALLED FOR HEARING, NONE AP PEARED FOR THE ASSESSEE. IT IS SEEN FROM THE RECORDS THAT SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE IN EARLIER OCCASIONS ALSO. T HE REQUEST FOR ADJOURNMENT WAS ALSO ENTERTAINED NUMBER OF TIMES. HOWEVER, THE ASSESSE/ITS REPRESENTATIVE HAS CONTINUED TO REMAIN INDIFFERENT TO THE REPEATED OPPORTUNITY GIVEN BY THE TRIBUNAL. GIVEN THE ALARMING SHOW OF NEGLIGENCE, WE ARE CONSTRAINT TO PROCEED EX PARTE IN THE MATTER. 4. THE LEARNED DR, ON THE OTHER HAND, REFERRED TO T HE ASSESSMENT ORDER AND FIRST APPELLATE ORDER DEALING WITH THE GR IEVANCES OF THE ASSESSEE ON MERITS. THE LEARNED DR SUBMITTED THAT THE CONCLUSION DRAWN BY THE CIT(A) IS REASONED ONE AND THUS SHOULD NOT BE INTERFERED IN THE ABSENCE OF SHOWING ANYTHING CONTRARY THERETO . 5. WE HAVE PERUSED THE ORDERS OF THE AO AND THE CIT (A). IN THE ABSENCE OF ANY PAPER BOOK OR ANY EXPLANATION FORTHC OMING ON BEHALF OF THE ASSESSEE BEFORE THE TRIBUNAL, WE REFER TO TH E ORDER OF THE CIT(A). 6. AS REGARDS GROUND NO.1, THE CIT(A) HAS TAKEN NOT E OF THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE HI M IN PARA 3 OF ITS ORDER AND RENDERED ITS DECISION IN PARA 4 OF ITS OR DER WHICH READS AS UNDER: 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD AND SUBMISSION OF THE LD. AR. GROUND NO.1 PERTAINS TO DISALLOWANCE OF RS.13,95,253/- U/S 43B ON ACCOUNT OF OUTSTANDING LI ABILITY OF PROFESSIONAL TAX AT RS.43,550/-, PROVIDENT FUND AT RS. 6960/- AND SERVICE TAX AT RS. 13,44,743/-. ADMITTEDLY, THIS LI ABILITY WAS NOT PAID BY THE APPELLANT ON OR BEFORE DUE DATE OF FILING OF RETURN. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD.AR HAS NOT PRESSED ADDITION OF RS.6960/- BEING THE AMOUNT OF UNPAID PROVIDENT F UND. HOWEVER, IN RESPECT OF PROFESSIONAL TAX, IT HAS BEEN STATED THAT THE SAME WAS PAID IN THE MONTH OF DECEMBER 2012 AND JANUARY 2013 AGGREGATING TO RS.71,800/-. ACCORDINGLY, IT HAS BEEN REQUESTED THAT DEDUCTION SHOULD BE ALLOWED IN A.Y. 2013-14. UNDER THESE CIRC UMSTANCES, THE DISALLOWANCE MADE BY THE AO IN THE YEAR UNDER CONSI DERATION IS ITA NO. 949/AHD/17 [MOBILE TELECOMMUNICATIONS LTD. VS. DCIT] A.Y. 2012-13 - 4 - CONFIRMED SINCE THE PAYMENT OF PROFESSIONAL TAX WAS NOT MADE UPTO THE DUE DATE OF FILING OF RETURN, HOWEVER, THE AO M AY ALLOW THE DEDUCTION IN A.Y. 2013-14 ON THE BASIS OF ACTUAL PA YMENT AFTER NECESSARY VERIFICATION. IN RESPECT OF SERVICE TAX P AYABLE AT RS. 13,44,743/-, THE LD. AR HAS SIMPLY SUBMITTED THAT T HE LIABILITY OF SERVICE TAX IS NOT COVERED U/S 43B. THIS ARGUMENT O F THE LD.AR IS NOT ACCEPTABLE BECAUSE THE PROVISIONS OF SECTION 43B ARE APPLICABLE IN RESPECT OF ANY SUM PAYABLE BY WAY OF TAX, DUTY, CES S OR FEE, BY WHATEVER NAME CALLED UNDER ANY LAW FOR THE TIME BEI NG ENFORCED. ACCORDINGLY, I HOLD THAT THE SERVICE TAX BEING PAYA BLE UNDER THE SERVICE TAX ACT IS ALSO COVERED BY THE PROVISIONS O F SECTION 43B. HENCE THE DISALLOWANCE MADE BY THE AO ON THIS ACCOU NT IS CONFIRMED. THUS APPELLANT PARTLY SUCCEEDS IN RESPEC T OF GROUND NO.1 . 7. WE HAVE PERUSED THE REASONING PROVIDED BY THE CI T(A) FOR ADJUDICATION AGAINST THE ASSESSEE. IN THE ABSENCE OF ANY CONTRARY EXPLANATION ON BEHALF OF THE ASSESSEE, AND IN THE A BSENCE OF ANY PERVERSITY IN THE CONCLUSION DRAWN BY THE CIT(A), W E DECLINE TO INTERFERE. GROUND NO.1 OF THE ASSESSEES APPEAL IS DISMISSED. 8. AS REGARDS GROUND NO.2, THE CIT(A) HAS DEALT WIT H ISSUE AS UNDER: 4.1 GROUND NO.2 PERTAINS TO ADDITION OF RS. 10 LACS BEING THE PAYMENT MADE TO M/S MEDIA MATRIX WORLDWIDE LTD. TOW ARDS GETTING THE POSSESSION OF JOINTLY SHARED OFFICE PREMISES. I T HAS BEEN CLAIMED THAT THE APPELLANT COMPANY HAS OCCUPIED AN OFFICE A T 1056, ADARSH NAGAR, MUMBAI ON SHARING BASIS WITH M/S MEDIA MATRI X WORLDWIDE LTD. AND FOR GETTING THE PREMISES VACATED BY M/S ME DIA MATRIX WORLDWIDE LTD, A SUM OF RS. 10 LACS WAS PAID. SINCE THE PREMISE WAS TAKEN ON RENT, ACQUISITION OF ANY LEASE HOLD RIGHTS WILL RESULT IN ACQUISITION OF A CAPITAL ASSET . IT HAS BEEN ALSO POINTED OUT BY THE AO THAT THE APPELLANT VIDE REPLY DATED 12.03.2015 HAD ADMITTED THAT A SUM OF RS.10 LACS WAS PAID TOWARDS THE VALUE OF FUR NITURE AND FIXTURES. THIS FACT ALSO GOES TO PROVE THAT THE APPELLANT HA S ACQUIRED A CAPITAL ASSET. MOREOVER, BUSINESS USE OF THE PREM ISES HAS NOT BEEN PROVED WITH SUPPORTING DOCUMENTARY EVIDENCES. THERE FORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES , I HOLD THAT A SUM OF RS.10 LACS CANNOT BE ALLOWED AS REVENUE EXPENDIT URE AND ACCORDINGLY, THE ADDITION MADE BY THE AO IS CONFIRM ED. THUS APPELLANT FAILS IN RESPECT OF GROUND NO.2. 9. WE HAVE PERUSED THE REASONING PROVIDED BY THE CI T(A) FOR ADJUDICATION AGAINST THE ASSESSEE. IN THE ABSENCE OF ANY CONTRARY ITA NO. 949/AHD/17 [MOBILE TELECOMMUNICATIONS LTD. VS. DCIT] A.Y. 2012-13 - 5 - EXPLANATION ON BEHALF OF THE ASSESSEE, AND IN THE A BSENCE OF ANY PERVERSITY IN THE CONCLUSION DRAWN BY THE CIT(A), W E DECLINE TO INTERFERE. GROUND NO.2 OF THE ASSESSEES APPEAL IS DISMISSED. 10. AS REGARDS GROUND NO.3, THE CIT(A) HAS DEALT WI TH ISSUE AS UNDER: 4.3 GROUND NO.4 PERTAINS TO ADDITION OF RS.1,09,418/- BEING THE DIFFERENCE IN THE RECEIPTS ON THE BASIS OF FORM 26A S, THE AO NOTICED THAT APPELLANT HAD RECEIVED A SUM OF RS.51,83,218/- AS PER 26AS FROM VANTAGE BPO SERVICES PVT. LTD., BUT HAD SHOWN RECEIPTS OF RS. 50,73,800/- ONLY. NO RECONCILIATION WAS FURNISHED B EFORE THE AO IN THIS REGARD. EVEN AT APPELLATE STAGE, THE ID.AR HAS NOT RECONCILED THE DIFFERENCE AS IS EVIDENT FROM THE WRITTEN SUBMISSIO N REPRODUCED IN THIS ORDER. IN FACT, THE APPELLANT HAS TRIED TO PAR TLY RECONCILE WITH MORE RECEIPTS SHOWN FROM ORIENTAL BANK OF COMMERCE AT RS. 61,577/- AND FROM THERMO FISHER SCIENTIFIC INDIA PVT.LTD AT RS. 4,647/-. THE RECEIPTS FROM OTHER PARTIES CANNOT BE CONSIDERED FO R RECONCILIATION OF RECEIPTS GENERATED FROM VANTAGE BPO SERVICES PVT .LTD. THEREFORE, I HOLD THAT THE APPELLANT HAS SUPPRESSED RECEIPTS O F RS.1,09,418/- RECEIVED FROM VANTAGE BPO SERVICES PVT.LTD AND ACCO RDINGLY, THE ADDITION MADE IS SUSTAINED. THUS APPELLANT FAILS IN RESPECT OF GROUND NO.4 . 11. WE HAVE PERUSED THE REASONING PROVIDED BY THE C IT(A) FOR ADJUDICATION AGAINST THE ASSESSEE. IN THE ABSENCE OF ANY CONTRARY EXPLANATION ON BEHALF OF THE ASSESSEE, AND IN THE A BSENCE OF ANY PERVERSITY IN THE CONCLUSION DRAWN BY THE CIT(A), W E DECLINE TO INTERFERE. GROUND NO.3 OF THE ASSESSEES APPEAL IS DISMISSED. 12. AS REGARDS GROUND NO.4, THE CIT(A) HAS DEALT WI TH ISSUE AS UNDER: 4.4 GROUND NO.5 PERTAINS TO 25% DISALLOWANCE OUT OF TRAVELLING EXPENSES OF RS.13,35,288/-. UNDISPUTEDLY, THESE EXP ENSES WERE INCURRED THROUGH CREDIT CARD BY THE EMPLOYEES OF CO MPANY FOR BUSINESS PURPOSES AT DIFFERENT LOCATIONS. SINCE THE EXPENDITURE HAS BEEN INCURRED THROUGH CREDIT CARD, GENUINENESS OF T HE SAME CANNOT BE DOUBTED. THE AO HAS DISALLOWED THE EXPENDITURE O N ADHOC BASIS WITHOUT POINTING OUT ANY ITEM OF DISALLOWABLE NATUR E. HOWEVER, POSSIBILITY OF USE OF CREDIT CARD FOR PERSONAL ITEM S CANNOTBE RULED OUT. THEREFORE, TO MEET THE END OF JUSTICE, THE AO IS DIRECTED TO ITA NO. 949/AHD/17 [MOBILE TELECOMMUNICATIONS LTD. VS. DCIT] A.Y. 2012-13 - 6 - DISALLOW ONLY 10% OF THE EXPENSES RESULTING INTO AD DITION OF RS. 1,33,529/-. THUS APPELLANT SUCCEEDS PARTLY ON THIS ACCOUNT. 13. WE HAVE PERUSED THE REASONING PROVIDED BY THE C IT(A) FOR ADJUDICATION AGAINST THE ASSESSEE. IN THE ABSENCE OF ANY CONTRARY EXPLANATION ON BEHALF OF THE ASSESSEE, AND IN THE A BSENCE OF ANY PERVERSITY IN THE CONCLUSION DRAWN BY THE CIT(A), W E DECLINE TO INTERFERE. GROUND NO.4 OF THE ASSESSEES APPEAL IS DISMISSED. 14. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 29/01/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 29/01/202 0