Ikon Labels Private Limited, Bengaluru V. Assistant Director Of Income Tax, CPC, Bangalore

MA 40/BANG/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2948 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-07-2022
• Assessment Year: 2019-2020
• Appeal Filed On: 19-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Onus to prove
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P. No. 40/Bang/2022 (in ITA No. 658/Bang/2021) Assessment Year : 2019-20 M/s. IKON Labels (P) Ltd., #304, Chicago Avenue, No. 37/2, Cunningham Road, Bengaluru – 560 052. PAN: AABCI0953Q Vs. The Asst. Director of Income Tax, CPC, Bangalore. APPELLANT RESPONDENT Assessee by : Shri Rajkumar Ganeriwala, CA Revenue by : Shri K.R. Narayan, Addl. CIT (DR) Date of Hearing : 08-07-2022 Date of Pronouncement : 06-09-2022 ORDER PER BEENA PILLAI, JUDICIAL MEMBER This miscellaneous petition filed by the assessee emanated from the order of Tribunal in ITA No. 658/ Bang/ 2021 dated 30.03.2022. 2. The only issue raised by assessee is in respect of non- disposal of ground pertaining to disallowance of expenditure incurred in club. On perusal of the record, we note that this ground has been inadvertently missed out to be adjudicated. Page 2 of 4 M.P. No. 40/Bang/2022 (in ITA No. 658/Bang/2021) Accordingly, we adjudicate this ground herein with the consent of the Ld.DR. 3. Following paragraphs shall be read in continuation to para 7.1 of the impugned order. “7.2 The assessee company had incurred expenditure towards Business Promotion at club for Rs.1,78,776/- which was disallowed under section 137 on the basis that "Disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return- 143(1)(a)(iv)". 7.3 The Tax Audit Report had by oversight declared this amount for disallowance whereas this was supposed to he total expenditure incurred on club. This error was relied upon to disallow the expenditure. 7.4 The learned CIT (Appeals), NFAC in his order in para 5.2.1 to 5.2.4 dismissed the appeal stating that the burden of proof is on the assessee, but there was no occasion to file any proof before CPC Authority. There is no such opportunity contemplated under the law before CPC Authority. Therefore the bills etc. were submitted before the learned First Page 3 of 4 M.P. No. 40/Bang/2022 (in ITA No. 658/Bang/2021) Appellate Authority which were not considered or verified. 7.5 The Ld.AR submitted that assessee has incurred club expenses towards business and promotion and there was no opportunity granted before the CPC to explain the same with evidences of bills to support the claim. Also an unintentional mistake crept in Form 3CED which became the sole reason to disallow the claim. The Ld.DR submitted that the issue may be remanded for due verification based on the evidences filed by the assessee. We have perused the submissions advanced by both sides in the light of records placed before us. 7.6 Admittedly the assessee is a private limited company and the disallowance made by the Ld.AO in respect of club expenses is u/s. 143(1) which is not permissible. Even otherwise, assessee being a private limited company, there cannot be an exemption of the expenditure having incurred for personal purposes. Under such circumstances, the addition Page 4 of 4 M.P. No. 40/Bang/2022 (in ITA No. 658/Bang/2021) made by CPC in an intimation u/s. 143(1)(a) cannot be sustained. Accordingly, this ground raised by assessee stands allowed.” In the result, the M.P. filed by the assessee stands allowed. Order pronounced in the open court on 06 th September, 2022. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 06 th September, 2022. /MS / Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore