INDIAN SPORTS P. LTD, V. ASST CIT CEN CIR 25,

MA 313/MUM/2016

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 5491 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 21-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARVIND SONDE
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM M A NO. 313 / MUM/20 1 6 (ARISING OUT OF ITA NO.5291/MUM/2014) ( ASSESSMENT YEAR : 2010 - 11 ) M/S. INDIAWIN SPORTS PVT. LTD., COURT HOUSE, 3 RD FLOO R, LOKMANYA TILAK MARG, DHOBI TALAO, MUMBAI 400 002 VS. ASST. CIT CE N CIR - 35, MUMBAI 400 020 PAN/GIR NO.AADCR8195F APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI ARVIND SONDE REVENUE BY SHRI PRAKASH MANE DATE OF HEARING 12 / 05 /201 7 DATE OF PRONOUNCEME NT 23 / 08 /2 01 7 / O R D E R PER R.C.SHARMA (A.M) : THIS MISCELLANEOUS APPLICATION ARISES OUT OF ITA NO.5291/MUM/2 01 4 FOR ASSESSMENT YEAR 2010 - 11 BETWEEN INDIAWIN SPORTS PRIVATE LIMITED, COURT HOUSE, 3 RD FLOO R, LOKMANYA TILAK MARG, DHOBI TALAO, MUMBAI - 400 002 VS. THE ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 35, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 AGAINST THE ORDER PASSED BY COMMISSIONER OF INCOME - TAX (APPEALS) - 41 [CIT(A)] ORDER NO.CIT(A) - 41/A CCC - 35/IT - 75/2013 - 14 DATED 30.05.2014. THE APPEAL WAS HEARD AND DISPOSED OFF BY THE M.A. NO.313/MUM/2016 M/S. INDIAWIN SPORTS PVT. LTD., 2 INCOME - TAX APPELLATE TRIBUNAL, 'I' BENCH, MUMBAI VIDE ITS ORDER DATED 22 ND JULY, 2016. 2. IT WAS SUBMITTED BY LEARNED AR THAT THAT THERE IS AN APPARENT MISTAKE IN THE ORDE R OF TRIBUNAL DATED 22/07/2016 IN AS MUCH AS GROUND NO. 3 OF THE AFORESAID APPEAL, WHICH READS AS UNDER, HAS NOT BEEN ADJUDICATED UPON ; EVEN THOUGH ARGUED AT LENGTH BY LEARNED AR AND DR DURING THE COURSE OF HEARING ON 22/07/2016. '2. THE AO ERRED IN DISAL LOWING AN AMOUNT OF RS 9,74,2507 - BEING 10% OF HOSPITALITY EXPENSES OF RS 97,42,446/ - ON ADHOC BASIS BY HOLDING THAT THE SAME IS NOT RELATED TO APPELLANTS BUSINESS. 3. LEARNED AR FURTHER CONTENDED THAT THE HOSPITALITY EXPENSES HAVE BEEN INCURRED IN THE CO URSE OF CARRYING ON BUSINESS AND DULY SUPPORTED BY EVIDENCES. ACCORDINGLY, THE ADHOC DISALLOWANCE MADE BY THE AO IS BASELESS AND SHOULD BE DELETED IN TOTAL. 4. AS PER LEARNED AR POSSIBLY DUE TO THE FACT THAT THE ITAT ORDER HAS BEEN PASSED FOR BOTH THE ASSE SSMENT YEARS VIZ. A Y 2009 - 10 AND 2010 - 11, AND DUE TO THE FACT THAT THIS GROUND WAS NOT PRESENT IN A Y 2009 - 10 AND WAS PRESENT ONLY IN A Y 2010 - 11, ADJUDICATION THEREON HAS BEEN INADVERTENTLY SKIPPED. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL WHEREIN GROUND NO. 3 REMAIN TO BE ADJUDICATED I NADVERTENTLY EVEN THOUGH ARGUED AT LENGTH ON M.A. NO.313/MUM/2016 M/S. INDIAWIN SPORTS PVT. LTD., 3 22/07/2016, WHICH AMOUNTS TO MI STAKE APPARENT FROM RECORD. ACCORDINGLY, WE HAVE AGAIN HEARD THE LEARNED AR AND DR ON THE ISSUE OF DISALLOWANCE IN THE HANDS OF THE AS SESSEE BEING A CORPORATE ENTITY / ARTIFICIAL PERSON. 6 . FOLLOWING DECISIONS LAY DOWN THE RATIO THAT A COMPANY BEING AN ARTIFICIAL PERSON, THERE CANNOT BE ANY PERSONAL ELEMENT IN EXPENSES INCURRED BY A COMPANY AND SUBSEQUENTLY, NO DISALLOWANCE IN THE HANDS OF A COMPANY CAN BE MADE U/S 37 OF THE ACT. THE ADDITION, IF ANY, CAN BE MADE IN THE HANDS OF A PERSON (E.G. EMPLOYEE, DIRECTORS ETC.) RECEIVING SUCH BENEFITS . 1 SAYAJI IRON &ENGG. CO (A LEADING JUDGEMENT - IT HAS SUBSEQUENTLYBEERI FOLLOWED BY THE MUMBAI TRIBUNAL IN VARIOUS CASES AS UNDER) 253 ITR 749 GUJARAT HC 2 RAMKISHIN TEXTILES (P.) LTD VS ITO (PARA - 8) 16TAXMANN.COM 57 ITAT - MUMBAI 3 JOHN SON & JOHNSON LTD VS ACIT (PARA - 35) 43 TAXMANN.COM 255 ITAT - MUMBAI 4 KSS LTD - {2016) VS DOT (PARA - 6.2) 66 TAXMANN.COM 97 ITAT - MUMBAI 5 FAIRFIELD ATLAS LTD. VSACIT (PARA - 9) 3 TAXMANN.COM 760 ITAT - MUMBAI 6 VIESHESH FILMS (P.) LTD. VS DOT (PARA - 7) 26 SOT 64 ITAT - MUMBAI 7 INTERSIL INDIA LTD. VS ADD.CIT (PARA - 12 - 16) 101ITD85 ITAT - MUMBAI 8 MARKWELL HOSE INDUSTRIES (P.) LTD.VS JCIT (PARA 19) 951TD271 ITAT - MUMBAI 7. RESPECTFULLY FOLLOWING THE PROPOSITIONS LAID DOWN IN ABOVE JUDICIAL PR ONOUNCEMENTS, WE DO NOT FIND ANY MERIT FOR THE DISALLOWANCE OF M.A. NO.313/MUM/2016 M/S. INDIAWIN SPORTS PVT. LTD., 4 10% OF THE HOSPITALITY EXPENSES ON ADHOC BASIS IN THE HANDS OF THE AS SESSEE BEING A CORPORATE ENTITY/ ARTIFICIAL PERSON. 6. IN THE RESULT, MA FILED BY THE ASSESSEE IS ALLOWED IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 23 / 08 /2017 S D/ - ( AMARJIT SINGH ) S D / - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 23 / 08 /2 01 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//