UNIVERSAL MEDICARE P. LTD, MUMBAI v. DCIT 10(2), MUMBAI

ITA 3315/MUM/2009 | 2004-2005
Pronouncement Date: 30-04-2010 | Result: Partly Allowed

Appeal Details

RSA Number 331519914 RSA 2009
Assessee PAN AAACU0717B
Bench Mumbai
Appeal Number ITA 3315/MUM/2009
Duration Of Justice 11 month(s) 11 day(s)
Appellant UNIVERSAL MEDICARE P. LTD, MUMBAI
Respondent DCIT 10(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 30-04-2010
Date Of Final Hearing 28-04-2010
Next Hearing Date 28-04-2010
Assessment Year 2004-2005
Appeal Filed On 19-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI R.K. GUPTA (JM) & SHRI B. RAMAKOTAIAH ( AM) I.T.A.3315/MUM/09 (A.Y. 2004-05)) UNIVERSAL MEDICATE P.LTD . CAPSULATION PREMISES DEONAR SION TROMBAY RD. MUMBAI-88. AAACU0717B VS. DY.COMMR. OF INCOME-TAX- 10(2) MUMBAI. APPELLANT RESPONDENT APPELLANT BY SHR I M.D. INAMDAR & MRS.MEENA JAIN. DEPARTMEMT BY SHRI R. M. TIWARI. O R D E R PER R.K. GUPTA JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) VI MUMBAI RELATING TO ASSTT. YEAR 2004-05. 2. FIVE GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN ITS APPEAL. THE LD. A.R. OF THE ASSESSEE HAS FILED A CHART SHOWING THE GROUNDS AND ALSO SHOWING HOW THE GROUNDS ARE COVERED BY ORDERS OF TRIBUNAL OR BY THE ORDERS OF VARIOUS HIGH COURTS. THE LD. A.R. HAS ALSO EXPLAINED THE CASE H OW THESE GROUNDS ARE COVERED BY ORDERS OF TRIBUNAL AND HIGH COURTS.. 3. ON THE OTHER HAND THE LD. D.R. HAS PLACED RELIA NCE ON THE ORDER OF LD. CIT(A). 4. NOW THE APPEAL OF THE ASSESSEE IS DISPOSED OF IN THE FOLLOWING MANNER. 5. GROUND NO.1 RELATES TO DISALLOWANCE U/S.36(1)(II I) AMOUNTING TO RS .1 95 000/- RELATING TO INTEREST ON LOANS FROM D IRECTORS. SIMILAR ISSUE WAS INVOLVED IN THE CASE OF THE ASSE SSEE ITSELF IN THE IMMEDIATELY PRECEDING YEAR I.E. ASST. YEAR 2003-04. THE TRIBUNAL HAS DECIDED THIS ISSUE WHILE DECIDING THE APPEAL IN ITA NO.6191 /MUM/08 VIDE ORDER DATED 13- ITA 3315/MUM/09 UNIVERSAL MEDICARE P.LTD. 2 03-2009 AGAINST THE ASSESSEE. THEREFORE FOLLOWING THE DECISION OF TRIBUNAL FOR THE IMMEDIATELY PRECEDING YEAR THIS GROUND IS DECI DED AGAINST THE ASSESSEE. 6. GROUND NO.2 RELATES TO DISALLOWANCE U/S.40(A)(I) IN REGARD TO TDS ON REIMBURSEMENT OF EXPENSES AT RS.29 54 109/-. DURING THE ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAS P AID A SUM OF RS.29 54 109/- ON ACCOUNT OF REIMBURSEMENT OF EXPENSES. HOWEVER N O TDS HAS BEEN DEDUCTED BY THE ASSESSEE. IN VIEW OF THE PROVISIONS OF SEC. 40(A)(I) THE AO TREATED THE EXPENSES AS INCOME OF THE ASSESSEE AND ADDED THE SA ME TO THE INCOME OF THE ASSESSEE. THE CIT(A) CONFIRMED THE ORDER OF AO. 7. THE LD. A.R. OF THE ASSESSEE STATED THAT ON ACCO UNT OF REIMBURSEMENT EXPENSES THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS. RELIANCE IS PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF INDUSTRIAL ENGG. PROJECTS (P) LTD. (202 ITR 1014) (DEL.) IN THE CASE OF COCA-CO LA INDIA INC. (7 SOT 224) (DEL.) AND DR. WILLMAR SCHWABE INDIA (P) LTD. (3 S OT 71) (DEL.). 8. AFTER CONSIDERING THE ORDER OF THE HONBLE DELHI HIGH COURT AND VARIOUS OTHER DECISIONS WE FIND THAT ON ACCOUNT OF REIMBUR SEMENT OF EXPENSES THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS. IT IS AN UNDI SPUTED FACT THAT THIS AMOUNT PAID BY THE ASSESSEE IS ON ACCOUNT OF REIMBURSEMENT . RELEVANT SUPPORTING DETAILS ARE PLACED AT PAGES 1 TO 3 OF THE PAPER BOOK. AFTER GOING THROUGH THE DETAILS IT IS FOUND THAT THE ABOVESTATED AMOUNT IS ON ACCOUNT OF REIMBURSEMENT OF EXPENSES. IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH C OURT AS WELL AS THE VARIOUS DECISIONS OF TRIBUNAL MENTIONED ABOVE WE HOLD THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS ON THE AMOUNT OF REIMBURSEMENT OF EXPENS ES. ACCORDINGLY THIS GROUND OF THE ASSESSEE IS ALLOWED. 9. GROUND NO. 3 IS IN RESPECT OF DEEMED DIVIDEND UN DER SEC. 2(22)(E) AT RS.1 07 61 947/-. SIMILAR ISSUE WAS INVOLVED IN THE ASSESSEES OWN CASE FOR ASST. ITA 3315/MUM/09 UNIVERSAL MEDICARE P.LTD. 3 YEAR 2003-04 AND THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WHILE GIVING THE FINDING IN PARAS 13 TO 17 OF ITS O RDER IN ITA NO.6191/M/08 (SUPRA). IN VIEW OF THE PRECEDENT WE ALLOW THIS GR OUND OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION ALSO. 10. GROUND NO.4 RELATES TO DEPRECIATION ON CLOSED U NIT AT RS.6 10 590/-. 11. THE LD. A.R. OF THE ASSESSEE HAS STATED THAT ON IDENTICAL FACTS IN THE CASE OF G.R. SHIPPING LTD. DECIDED IN ITA NO.822/M/05 DEPRE CIATION HAS BEEN ALLOWED ON THE CLOSED UNIT. COPY OF THIS ORDER IS PLACED AT PA GES 9 TO 14 OF THE COMPILATION. HE ALSO SUBMITTED THAT THE MATTER CAN BE SENT BACK TO THE FILE OF AO TO DECIDED THE SAME IN THE LIGHT OF THE DECISION OF THE TRIBUN AL MENTIONED ABOVE.. 12. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE RE STORE THIS ISSUE TO THE FILE OF AO TO DECIDE THE SAME IN THE LIGHT OF THE DECISI ON OF THE TRIBUNAL IN THE CASE OF G.R. SHIPPING LTD. (SUPRA). WE ORDER ACCORDINGLY. 13. THE REMAINING GROUND NO.5 RELATING TO REPAIR EXPENSES OF CLOSED UNIT AT RS.3 50 000/- WAS NOT PRESSED. THEREFORE THE SAME IS DISMISSED AS NOT PRESSED. 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ORDER PRONOUNCED ON THE 30TH DAY OF APRIL 20 10. SD/- SD/- (B. RAMAMOTAIAH) (R.K. GUPTA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 30TH APRIL 2010 . NG: ITA 3315/MUM/09 UNIVERSAL MEDICARE P.LTD. 4 COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A)-VI MUMBAI. 4 CIT CITY-6 MUMBAI. 5.DR F BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST.REGISTRAR ITAT MUMBAI. ITA 3315/MUM/09 UNIVERSAL MEDICARE P.LTD. 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 28-4-2010 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 29-4-2010 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER