INNOVATIVE TECHNOMICS P LTD, Pune v. DCIT,Cir.8, Pune

ITA 346/PUN/2007 | 2003-2004
Pronouncement Date: 09-03-2011 | Result: Allowed

Appeal Details

RSA Number 34624514 RSA 2007
Assessee PAN AABCM2595A
Bench Pune
Appeal Number ITA 346/PUN/2007
Duration Of Justice 4 year(s) 7 day(s)
Appellant INNOVATIVE TECHNOMICS P LTD, Pune
Respondent DCIT,Cir.8, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 09-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 09-03-2011
Assessment Year 2003-2004
Appeal Filed On 02-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I C SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER I.T.A. NO. 346/PN/2007 (ASSTT. YEARS: 2003-04) INNOVATIVE TECHNOMICS P. LTD. .. AP PELLANT X-17 MIDC BHOSARI PUNE PAN AABCM2595A VS. DY. COMMISSIONER OF INCOME-TAX CIR. 8 AKURDI PUNE .. RESPO NDENT APPELLANT BY: SHRI S.N. PURANIK RESPONDENT BY: SHRI ABHAY DAMLE ORDER PER G.S. PANNU AM THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)III PUNE DATE D 26.12.2006 WHICH IN TURN HAS ARISEN FROM AN ORDER OF THE ASSESSING OFFICER DATED 30.3.2006 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2003-04. 2. IT APPEARS THAT THOUGH ASSESSEE HAD ORIGINALLY R AISED TWO GROUNDS OF APPEAL BEFORE THE TRIBUNAL ONLY GROUND NO. 1 RELAT ING TO ADDITION OF RS 8 29 126/- WAS DISPOSED OF BY THE TRIBUNAL VIDE ITS ORDER DATED 30.03.2009. SUBSEQUENTLY ON A MISCELLANEOUS APPLICATION FILED BY ASSESSEE THE TRIBUNAL VIDE ORDER DATED 26.03.2010 RECALLED THE I MPUGNED ORDER DATED 30.03.2009 FOR THE LIMITED PURPOSE OF ADJUDICATING GROUND NO. 2 RELATING TO THE ADDITION OF RS 1 44 000/-. ACCORDINGLY THE APP EAL WAS LISTED FOR HEARING ON 08.03.2011. 3. IN THIS BACKGROUND WE PROCEED TO DECIDE GROUND NO. 2 RELATING TO ADDITION OF RS 1 44 000/- MADE BY THE ASSESSING OFF ICER BEING THE EXPENDITURE ON ACCOUNT OF ACCOUNTING AND ADMINISTRA TIVE CHARGES PAID TO ITA NO 346/PN/07 INNOVATIVE TECHNOMICS P LTD. PUNE 2 MARSH CONTROL P. LTD. THE AMOUNT WAS CLAIMED TO HAV E BEEN PAID TOWARDS ACCOUNTING/ADMINISTRATIVE SERVICES RENDERED BY MRS MADHUWANTI DEO ON BEHALF OF MARSH CONTROL P. LTD. WHEREIN SHE IS A DI RECTOR. THE ASSESSING OFFICER MADE THE DISALLOWANCE FOR THE REASONS THAT IN THE EARLIER YEARS NO SUCH CLAIM WAS MADE; THAT EVEN IF IT WERE TO BE PAI D THE AMOUNT SHOULD HAVE BEEN PAID TO MRS MADHUWANTI DEO AND NOT TO MAR SH CONTROL P. LTD.; AND THAT THERE WAS NO AGREEMENT BETWEEN THE ASSESS EE AND MARSH CONTROL P. LTD. IN SUPPORT OF THE SAID PAYMENT. THE COMMISSIONER OF INCOME-TAX (APPEALS) DID NOT FIND MERIT IN THE ARGU MENT OF THE ASSESSING OFFICER THAT IN THE ABSENCE OF A CLAIM IN THE EARLI ER YEARS THE CLAIM IN THIS YEAR WAS NOT TENABLE. HOWEVER THE COMMISSIONER OF INCOME-TAX (APPEALS) SUSTAINED THE DISALLOWANCE ON THE GROUND THAT FOR S ERVICES GIVEN BY MRS MADHUWANTI DEO TO THE ASSESSEE PAYMENT COULD NOT H AVE BEEN MADE TO MARSH CONTROL P. LTD. IN THE ABSENCE OF ANY AGREEME NT BETWEEN THE ASSESSEE AND MARSH CONTROL P. LTD. TO THAT EFFECT. AGAINST SUCH SUSTENANCE OF DISALLOWANCE ASSESSEE IS IN APPEAL B EFORE US. 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY POINTED OUT THAT SINCE MRS MADHUWANTI DEO WAS DIRECTOR OF M ARSH CONTROL P. LTD. THAT COMPANY HAD AGREED TO PROVIDE SERVICES OF MRS MADHUWANTI DEO TO THE ASSESSEE AND THE SERVICES PERFORMED BY HER RELATED TO SIGNING CHEQUES AND LOOKING AFTER STATUTORY PAYMENTS VERIFICATION OF B ILLS ETC. 5. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE STAND OF THE REVENUE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. IN OUR VIEW THE LOWER AUTHORITIES HAVE MIS-DIRECTED THEMSELVES IN M AKING THE IMPUGNED DISALLOWANCE. IT IS CLEARLY EMERGING FROM THE ORDER S OF THE LOWER AUTHORITIES THAT THERE IS NO DISPUTE THAT REQUISITE SERVICES HA VE BEEN RENDERED IN RELATION TO THE PAYMENT IN QUESTION. MERELY BECAUSE SERVICES HAVE BEEN ITA NO 346/PN/07 INNOVATIVE TECHNOMICS P LTD. PUNE 3 RENDERED BY MRS MADHUWANTI DEO AND PAYMENT HAS BEEN MADE TO MARSH CONTROL P. LTD. IT CANNOT BE A REASON FOR THE DISA LLOWANCE ESPECIALLY WHEN IT IS EVIDENT THAT MRS MADHUWANTI DEO IS THE DIRECT OR OF MARSH CONTROL P. LTD. AND ALSO THE FACT THAT FOR SERVICES RENDERED BILLS HAVE BEEN RAISED BY MARSH CONTROL P. LTD. ON THE ASSESSEE. IN THE FACE OF BILLS/INVOICES RAISED BY MARSH CONTROL P. LTD. THE ARGUMENT OF THE REVENUE THAT THERE IS NO AGREEMENT BETWEEN THE ASSESSEE AND MARSH CONTROL P. LTD. ALSO IS MISCONCEIVED. THE RAISING OF BILLS BY MARSH CONTROL P. LTD. AND PAYMENT THEREOF BY THE ASSESSEE CLEARLY REFLECTS THE PRIVIT Y OF CONTRACT AND THEREFORE THE OBJECTION OF THE REVENUE IS UNTENABLE. HAVING R EGARD TO THE ENTIRETY OF FACTS AND CIRCUMSTANCES WE HEREBY SET ASIDE THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION. ACCORDINGLY GROUND N O. 2 IS ALLOWED 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF MARCH 2011. SD/- SD/- (I.C. SUDHIR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 9 TH MARCH 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. INNOVATIVE TECHNOMICS P. LTD. PUNE 2. THE DY. CIT CIR. 8 PUNE 3. THE CIT(A)-III PUNE 4. THE CIT-V PUNE 5. THE D.R A BENCH PUNE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT PUNE BENCHES PUNE