Srikanth Entertainment Pvt.Ltd., Hyd, Hyderabad V. ACIT, Circle-13(1), Hyderabad, Hyderabad

ITA 955/HYD/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1680 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 18-03-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 23-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Agreed addition
• Section: 143(3); 143(1); 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 955/HYD/2016 A.Y.: 2012 - 13 M/S. SRIKANTH ENTERTAINMENT PVT LTD., HYDERABAD. PAN: AAQCS 6281 C VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 13(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI P. MURALI MOHAN RAO REVENUE BY SUNIL KUMAR PANDEY, DR DATE OF HEARING: 18/03/2021 DATE OF PRONOUNCEMENT: 29 /06/2021 ORDER PER A. MOHAN ALANKAMONY , A.M: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 6, HYDERABAD IN APPEAL NO. 1525/2014 - 15/CIT(A) - 6/15 - 16, DATED 29/12/2015 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE A.Y. 2012 - 13. 2. THE ASSESSEE HAS RAISED FIVE GROUNDS IN ITS APPEAL HOWEVER, THE CRUX OF THE ISSUE IS THAT: 2 THE LD. CIT (A) HAS ERRED IN UPHOLDING THE ADDITION MADE BY THE LD. AO TOWARDS ADHOC DISALLOWANCE OF BATTA EXPENDITURE AMOUNTING TO RS. 10 LAKHS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF PRODUCING TELEVISION SERIALS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE RELEVANT AY 2012 - 13 ON 27/09/2012 ADMITTING TOTAL INCOME OF RS. 2,75,52,150/ - . INITIALLY THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT AND THEREAFTER THE CASE WAS SELECTED FO R SCRUTINY UNDER CASS AND FINALLY ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 2/7/2014 WHEREIN AMONGST CERTAIN OTHER AN ADDITION AMOUNTING TO RS. 10 LAKHS WERE MADE BY THE LD. AO TOWARDS DISALLOWANCE OF BATTA. ON APPEAL, THE LD. CIT (A) CONFIRMED T HE ORDER OF THE LD. AO BY OBSERVING THAT THE ADDITION WAS VOLUNTARILY AGREED BY THE ASSESSEE. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE LD.AO OBSERVED THAT THE ASSESSEE HAD CLAIMED EXPENDITURE OF RS. 1,42,94,648/ - TOWARDS BATTA. SINCE ALL THE VOUCHERS WERE SELF - MADE AND SOME EXPENDITURE COULD NOT BE VERIFIED WITH THE VOUCHERS THE LD. AO MADE AN ADHOC DISALLOWANCE OF RS. 10 LAKHS. ON APPEAL, THE LD. CIT (A) UPHELD THE ORDER OF THE LD. AO STATING THAT IT WAS AN AGREED ADDITION. 3 5. THE LD. AR VEHEMENTLY ARGUED BEFORE US STATING THAT THE ADDITION MADE BY THE LD. REVENUE AUTHORITIES ARE NOT JUSTIFIED AND THE ASSESSEE HAD NOT AGREED FOR S UCH ADDITION. IT WAS THEREFORE, PLEADED THAT THE ADDITION MADE BY THE LD. AO WHICH WAS FURTHER SUSTAINED BY THE LD. CIT (A) MAY BE DELETED. THE LD. DR ON THE OTHER HAND, RELIED ON THE ORDER OF THE LD. REVENUE AUTHORITIES AND REQUESTED FOR CONFIRMING THE S AME. 6. WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY PERUSED THE MATERIALS ON RECORD. FROM THE NATURE OF BUSINESS OF THE ASSESSEE IT IS APPARENT THAT EXPENSES TOWARDS BATTA IS UNAVOIDABLE. FURTHER SINCE IT HAS TO BE PAID TO INDIVIDUALS, THERE IS ONL Y SCOPE FOR MAINTAINING SELF - MADE VOUCHERS SIGNED BY THE RECIPIENTS . THE LD.AO HAS SIMPLY STATED THAT SOME VOUCHERS ARE NOT VERIFIABLE WITH THE EXPENDITURE INCURRED WITHOUT SPECIFYING THE ACTUAL DETAILS. THEREFORE, WE ARE OF THE VIEW THAT SUCH AD - HOC DISA LLOWANCE MADE BY THE LD. AO IS NOT APPROPRIATE. HENCE, WE HEREBY DIRECT THE LD. AO TO DELETE THE DISALLOWANCE MADE FOR RS. 10 LAKHS IN THE HANDS OF THE ASSESSEE TOWARDS DISALLOWANCE OF BATTA EXPENDITURE WHICH WAS FURTHER UPHELD BY THE LD. CIT (A). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 4 8. BEFORE PARTING, IT IS WORTHWHILE TO MENTION THAT THIS ORDER IS PRONOUNCED AFTER 90 DAYS OF HEARING THE APPEAL, WHICH IS THOUGH AGAINST THE USUAL NORMS, WE FIND IT APPROPRIATE, TAKING INTO CONSIDERATION OF THE EXTRA - ORDINARY SITUATION IN THE LIGHT OF THE LOCK - DOWN DUE TO COVID - 19 PANDEMIC. WHILE DOING SO, WE HAVE RELIED IN THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. JSW LTD. IN ITA NO.6264/M/2018 AND 6103/M/2018 FOR AY 2013 - 14 ORDER DATED 14TH MAY 2020. PRONOUNCED IN THE OPEN COURT ON THE 29 TH JUNE, 2021. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 29 TH JUNE , 2021. OKK COPY TO: - 1) M/S. SRIKANTH ENTERTAINMENT PVT LTD C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 13(1), HYDERABAD. 3) THE CIT(A) - 6, HYDERABAD. 4) THE PR. CIT - 6, HYDERABAD. 5) THE DR , ITAT, HYDERABAD 6) GUARD FILE