ITO, CHENNAI v. M/s. Lean Plus India, CHENNAI

ITA 1932/CHNY/2010 | 2007-2008
Pronouncement Date: 27-07-2011 | Result: Allowed

Appeal Details

RSA Number 193221714 RSA 2010
Bench Chennai
Appeal Number ITA 1932/CHNY/2010
Duration Of Justice 8 month(s) 11 day(s)
Appellant ITO, CHENNAI
Respondent M/s. Lean Plus India, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 27-07-2011
Date Of Final Hearing 27-07-2011
Next Hearing Date 27-07-2011
Assessment Year 2007-2008
Appeal Filed On 15-11-2010
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI A BENCH CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. N.S. SAINI A .M. I.T.A. NO. 1932/MDS/2010 ASSESSMENT YEAR: 2007-08 THE INCOME TAX OFFICER WARD IV (1) CHENNAI 34. VS. M/S. LEAN PLUS INDIA NEW NO.8 OLD NO. 16/3 SAI NIVAS WEST VANNIAR I CROSS STREET K.K. NAGAR CHENNAI 600 078. [PAN:AACFL3647G] (APPELLANT) (RESPONDENT) C.O.NO.169/MDS/2010 [I.T.A. NO. 1932/MDS/2010] ASSESSMENT YEAR: 2007-08 M/S. LEAN PLUS INDIA NEW NO.8 OLD NO. 16/3 SAI NIVAS WEST VANNIAR I CROSS STREET K.K. NAGAR CHENNAI 600 078. VS. THE INCOME TAX OFFICER WARD IV (1) CHENNAI 34. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHAJI P. JACOB ASSESSEE BY : SHRI B. RAMAKRISHNAN ORDER PER U.B.S. BEDI J.M. THIS APPEAL OF THE REVENUE AND CO OF THE ASSESSEE I S DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) VIII CHENNAI DATED 09.08.2010 RELEVANT TO THE ASSESSMENT YEAR 2007-08. 2. THE ISSUE RAISED IN THIS APPEAL OF THE DEPARTME NT RELATES TO DISALLOWANCE OF AMOUNT PAID FOR ASSISTANCE PROVIDED TO THE ASSESSEE BY DELIVERING LECTURES AND TUTORIALS TO MR. MICHAEL WARDER AN US NATIONAL FOR NON-DEDUCTION OF TDS UNDER I II I.T.A. NO. .T.A. NO. .T.A. NO. .T.A. NO.1932 1932 1932 1932 & & & & C.O.NO. C.O.NO. C.O.NO. C.O.NO. 169 169169 169/MDS/1 /MDS/1 /MDS/1 /MDS/10 00 0 2 SECTION 195 OF THE INCOME TAX ACT 1961 AND DISALLO WANCE OF HOTEL EXPENDITURE PAID TO THE RESIDENCY TOWERS WHERE MR. MICHAEL WARD ER STAYED TOWARDS RENT AND OTHER PAYMENTS WHICH WERE TREATED AS PAYMENT MADE T O FOREIGN NATIONAL IN KIND FOR NON-DEDUCTION OF TDS UNDER SECTION 194 I & 195 OF T HE INCOME TAX ACT 1961. 3. THE ASSESSEE TOOK UP THE MATTER IN APPEAL AND S UBMITTED BEFORE THE FIRST APPELLATE AUTHORITY THAT THE ASSESSEE FIRM FILED RE TURN OF INCOME FOR THE AY 2007-08 DECLARING AN INCOME OF ` .32 776/-. THE ASSESSEE FIRM DERIVES INCOME FROM CONDUCTING SEMINARS WORKSHOPS IN UNDERTAKING LEAN MANAGEMENT PRACTICES TO THE IDENTIFIED CLIENTS. FOR THIS THE ASSESSEE HAD ENGA GED SERVICES OF MR. MICHAEL WARDER AN US NATIONAL. DURING THE ASSESSMENT PROCE EDINGS THE ASSESSING OFFICER HAS DISALLOWED EXPENDITURE INCURRED U/S 40(A)(IA) I N PAYMENT MADE TO FOREIGN NATIONAL MR. MICHAEL WARDER AMOUNTING TO ` .9 20 021/- FOR NON-DEDUCTION OF TDS UNDER SECTION 195. THE ONLY GROUND ON WHICH THE ASS ESSING OFFICER HAS PASSED THE ORDER IS THAT DOCUMENTARY EVIDENCES WERE NOT PRODUC ED TO SUPPORT THE VISIT AND STAY IN INDIA LIKE COPY OF PASSPORT ETC. ALSO FO R THE STAY IN HOTEL OF FOREIGN NATIONAL IN INDIA THE ASSESSEE FIRM INCURRED HOTEL EXPENDIT URE AMOUNTING TO ` .1 65 600/- FOR RENT AND OTHER AMOUNTS ` .88 058/- PAID TO THE HOTEL RESIDENCY TOWERS CHENN AI. THIS EXPENDITURE WAS DISALLOWED FOR NON-DEDUCTION O F TDS ON RENT PAID TO HOTEL UNDER SECTION 194 I AND FOR OTHER AMOUNTS PAID TO H OTEL TREATING THE AMOUNT AS PAID TO FOREIGN NATIONAL AND FOR NON-DEDUCTION OF TDS UN DER SECTION 195. THE ASSESSEE FIRM HAS FILED ALONG WITH THE APPEAL MEMORANDUM ALL THE PROOFS REGARDING THE VISIT AND STAY OF MR. MICHAEL WARDER IN INDIA LIKE THE PA SSPORT OF MR. MICHAEL WARDER FOR THE RELEVANT PERIOD. FURTHER DOCUMENTS WERE PRODUCE D DURING PH REGARDING STAY OF I II I.T.A. NO. .T.A. NO. .T.A. NO. .T.A. NO.1932 1932 1932 1932 & & & & C.O.NO. C.O.NO. C.O.NO. C.O.NO. 169 169169 169/MDS/1 /MDS/1 /MDS/1 /MDS/10 00 0 3 MR. MICHAEL WARDER IN INDIA IN THE FORM OF HOTEL CE RTIFICATES. THE RELEVANT HOTEL BILLS WERE ALREADY SUBMITTED. 4. THE LD. CIT(A) WHILE CONSIDERING AND ACCEPTING THE CONTENTION OF THE ASSESSEE HAS CONCLUDED TO DIRECT THE ASSESSING OFFI CER TO DELETE THE DEMAND RAISED OF ` .4 73 650/-. 5. AGGRIEVED BY THIS ORDER OF THE LD. CIT(A) THE DEPARTMENT HAS COME UP IN APPEAL TAKING OBJECTION OF ACCEPTING FRESH EVIDENCE IN FIRST APPEAL AND GRANTING RELIEF TO THE ASSESSEE WITH RESPECT TO BOTH THE ISS UES RAISED WHICH ACTION OF THE LD. CIT(A) IS AGAINST RULE 46A OF INCOME TAX RULES BEC AUSE NEITHER THE ASSESSING OFFICER HAS BEEN ASSOCIATED WITH THE APPEAL PROCEED INGS NOR REMAND REPORT HAS BEEN OBTAINED FROM THE ASSESSING OFFICER. THEREFORE THERE WAS CLEAR VIOLATION OF PROVISION OF RULE 46A AND THE LD. DR HAS PLEADED TH AT IN THE INTEREST OF JUSTICE AND TO HAVE FAIR PLAY IN THE MATTER THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION OF BOTH THE I SSUES AS THESE ARE INTERRELATED TO EACH OTHER AND TO THIS PLEA OF THE LD. DR THE LD. COUNSEL FOR THE ASSESSEE SHRI B. RAMAKRISHNAN DID NOT OBJECT AND RATHER SUBMITTED TH AT THE MATTER CAN GO BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATI ON ON BOTH THE ISSUES. 6. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDERI NG THE MATERIAL ON RECORD WE FIND THAT CERTAIN FRESH EVIDENCE WAS FILED BEFOR E THE LD. CIT(A) ALONG WITH THE APPEAL PAPERS WHICH WAS DULY CONSIDERED BY THE LD. CIT(A) IN ORDER TO GRANT THE RELIEF TO THE ASSESSEE ON BOTH THE ISSUES RAISED IN THE APPEAL WITHOUT ASSOCIATING THE ASSESSING OFFICER WITH THE APPEAL PROCEEDINGS O R SEEKING ANY REMAND REPORT FROM THE ASSESSING OFFICER. THEREFORE THERE IS A C LEAR VIOLATION OF PROVISIONS OF I II I.T.A. NO. .T.A. NO. .T.A. NO. .T.A. NO.1932 1932 1932 1932 & & & & C.O.NO. C.O.NO. C.O.NO. C.O.NO. 169 169169 169/MDS/1 /MDS/1 /MDS/1 /MDS/10 00 0 4 RULE 46A IN THIS CASE. AS SUCH WHILE ACCEPTING THE APPEAL OF THE REVENUE WE SET ASIDE THE ORDER OF AUTHORITIES BELOW AND RESTORE TH E MATTER BACK ON THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERING THE ISSUE AFRES H AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 7. AS THE MATTER IS BEING RESTORED ON THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION SO THE CO OF THE ASSESSEE WHICH I S IN SUPPORT OF THE ORDER OF THE LD. CIT(A) GETS DISMISSED. 8. AS A RESULT THE APPEAL OF THE DEPARTMENT GETS ACCEPTED FOR STATISTICAL PURPOSE WHEREAS THE CO OF THE ASSESSEE GETS DISMIS SED. ORDER PRONOUNCED SOON AFTER THE CONCLUSION OF HEARI NG ON 27.07.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI DATED THE 27.07.2011 VM/- TO:THE ASSESSEE//A.O./CIT(A)/CIT/D.R.