M/s Capsugel Healthcare Ltd, Haryana v. DCIT, Haryana

ITA 445/DEL/2009 | 2004-2005
Pronouncement Date: 09-02-2010 | Result: Allowed

Appeal Details

RSA Number 44520114 RSA 2009
Bench Delhi
Appeal Number ITA 445/DEL/2009
Duration Of Justice 1 year(s) 3 day(s)
Appellant M/s Capsugel Healthcare Ltd, Haryana
Respondent DCIT, Haryana
Appeal Type Income Tax Appeal
Pronouncement Date 09-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 09-02-2010
Date Of Final Hearing 09-02-2010
Next Hearing Date 09-02-2010
Assessment Year 2004-2005
Appeal Filed On 06-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI R.C. SHARMA I.T.A. NO. 445/DEL/2009 ASSESSMENT YEAR: 2004-05 M/S. CAPSUGEL HEALTHCARE LTD. VS. DEPUTY COMMISSI ONER OF IT (FORMERLY BHARTI HEALTHCARE LTD.) CIRCLE REWARI 21-JONIAWAS DHARUHERE REWARI (HARYANA) DISTRICT: REWARI (HARYANA) (APPELLANT) (RESPONDENT) I.T.A. NO. 309/DEL/2009 ASSESSMENT YEAR: 2004-05 DEPUTY COMMISSIONER VS. M/S. CAPSUGEL HEALTHCARE LTD. CIRCLE REWARI (FORMERLY BHARTI HEALTHCARE REWARI (HARYANA LTD.) 21-JONIAWAS DHARUHERE DISTRICT: REWARI (HARYANA) (CROSS-OBJECTOR) (RESPONDENT) APPELLANT BY: SHRI ANIL BHALLA CA RESPONDENT BY: SMT. ANUKSHA KHU RANA SR.DR ORDER PER BENCH: THE ASSESSEE AND REVENUE ARE IN CROSS APPEALS AGAIN ST THE ORDER OF LEARNED CIT(APPEALS) DATED 25.11.2008 PASSED FOR AS SESSMENT YEAR 2004-05. THE ASSESSEE IN ITS APPEAL HAS CHALLENGED CONFIRMAT ION OF ADDITION OF RS.10 24 091 AND RS.2 35 277 WHEREAS REVENUE IS IM PUGNING THE DELETION OF RS.54 99 211 AND RS.8 10 916. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON IST OF NOVEMBER 2004 DECLARING NIL INCOME . ON SCRUTINY OF THE ACCOUNTS ASSESSING OFFICER HAS FOUND THAT ASSESSEE HAS DEBITED AN EXPENDITURE TO THE TUNE OF RS.54 99 211 ON ACCOUNT OF CORPORATE OFFICE EXPENSES INCURRED BY BHARTI TELETECH LTD. LEARNED A SSESSING OFFICER CONFRONTED THE ASSESSEE TO EXPLAIN AS TO WHY THESE EXPENSES BE ALLOWED TO IT. IN RESPONSE TO THE QUERY OF ASSESSING OFFICER IT W AS CONTENDED BY THE ASSESSEE THAT IT HAD PASSED A RESOLUTION IN THE MEE TING OF BOARD ON 13.5.2004 WHEREBY EXPENSES INCURRED FOR AVAILING COMMON SERVI CES RENDERED BY BHARTI TELETECH LTD. TO M/S. BHARTI HEALTHCARE LTD. M/S. B HARTI SYSTEL LTD. GOA TELECOMMUNICATION & SYSTEM LTD. AND ITSELF WERE NOT DIRECTLY TO BE ALLOCATED TO EACH SPECIFIC UNIT/ACTIVITY/COMPANY BU T THESE WERE TO BE ALLOCATED IN THE RATIOS OF THEIR NET SALES. IN THIS WAY ASSESSEES SHARE OF EXPENSES IS OF RS.54 99 211. LEARNED ASSESSING OFFI CER REJECTED THE CONTENTION OF ASSESSEE AND HELD THAT BHARTI TELETEC H LTD. AND OTHER CONCERNS ARE HAVING A SEPARATE LEGAL ENTITY. ACCORDING TO TH E ASSESSING OFFICER THE EMPLOYEES WHO ARE WORKING IN CORPORATE OFFICE ARE O N THE PAY ROLL OF BHARTI TELETECH LTD. HE DISALLOWED THE CLAIM OF ASSESSEE. SIMILARLY ASSESSEE WAS NOT ABLE TO RECOVER CERTAIN AMOUNTS AND IT CLAIMED THE DEDUCTION OF 3 RS.8 10 916. THESE AMOUNTS RELATES TO THE BONDS PAI D AT THE TIME OF BID. ACCORDING TO THE ASSESSEE IT IS UNABLE TO RECOVER THESE AMOUNTS. ASSESSING OFFICER HAS DISALLOWED THIS CLAIM ALSO. LEARNED CIT (APPEALS) DELETED BOTH THESE DISALLOWANCES AND THE REVENUE IS CHALLENGING THE ORDER OF THE LEARNED CIT(APPEALS) ON THESE ISSUES. 3. SIMILARLY THE ASSESSING OFFICER HAS DISALLOWED THE EXPENSES IN RESPECT OF COMMISSION PAID FOR OBTAINING CORPORATE GUARANTEE TO THE BANK FOR C.C. FACILITY AMOUNTING TO RS.10 24 091. ASSESSING OFFICER HAS ALSO MADE AN ADDITION OF RS.2 35 277 IN RESPECT OF SUNDRY CREDIT ORS OUTSTANDING FOR MORE THAN THREE YEARS. LEARNED CIT(APPEALS) HAS CONFIRME D BOTH THESE ADDITIONS. ASSESSEE IS CHALLENGING CONFIRMATION OF THESE ADDIT IONS IN ITS APPEALS. 4. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE PERUSED THE ORDER OF LEARNED CIT(APPEALS) AND FIND THAT LEARNED FIRST APPELLATE AUTHORITY HAS NOT MADE ANY DISCUSSION OF ASSESSEES EXPLANATION FOR DELETING THE MAJOR ADDITION. SIMILARLY HE HAS NOT ADVANCED ANY REASON FOR CONFIRMING THE ADDITIONS. THE FINDING OF THE LEARNED CIT(APPEA LS) ON THESE ISSUES READ AS UNDER: 7. GROUND OF APPEAL BEARING NO.1 PERTAINS TO DISAL LOWANCE OF COMPANYS SHARE OF CORPORATE EXPENSES AMOUNTING TO RS.54 99 211. THE ISSUE HAS BEEN DISCUSSED BY THE A.O. IN PARA 3 OF THE ASSESSMENT ORDER. THE APPELLANT HAS SUBMITTED THAT HAD M/S. BH ARTI TELITECH LTD. 4 NOT PROVIDED SERVICES FOR WHICH PAYMENT WAS MADE T HE APPELLANT WOULD HAVE TO PAY HIGHER AMOUNTS FOR THE SAME SERVI CES. THE SUBMISSIONS HAVE BEEN CONSIDERED AND THE ADDITION M ADE BY THE A.O. IS DELETED. 8. GROUND OF APPEAL BEARING NOS. 2 & 3 PERTAIN TO P AYMENT MADE TO BANK ON ACCOUNT OF FOREIGN GUARANTEE AND ON ACCO UNT OF COMMISSION PAID FOR OBTAINING CORPORATE GUARANTEE T O BANK FOR CC LIMIT. THE ISSUE HAS BEEN DISCUSSED BY THE A.O. IN PARAS 4 AND 5 OF THE ASSESSMENT ORDER. THE ADDITION MADE BY THE A.O. OF RS.8 10 916 IS DELETED KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES AND THAT MADE AT RS.1024091 (GROUND OF APPEAL NO.3) IS CONFIRMED. TH US THE GROUND OF APPEAL NO.2 IS ALLOWED AND 3 IS DISMISSED. 5. FROM READING OF THE ABOVE FINDINGS WE ARE OF TH E VIEW THAT THERE IS NO ANALYSIS OF FACTS AND CIRCUMSTANCES. THEREFORE WE SET ASIDE ALL THESE ISSUES TO THE FILE OF LEARNED FIRST APPELLATE AUTHORITY FO R READJUDICATION. IT IS NEEDLESS TO SAY THAT THE LEARNED FIRST APPELLATE AU THORITY SHALL PROVIDE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE READJ UDICATION ALL THESE ISSUES. 6. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 09.02.201 0 ( R.C. SHARMA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09/02/2010 MOHAN LAL 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR