OMCI MARINE SERVICES P. LTD, MUMBAI v. ITO 10(3)(3), MUMBAI

ITA 4755/MUM/2008 | 2003-2004
Pronouncement Date: 31-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 475519914 RSA 2008
Assessee PAN AAACO4266F
Bench Mumbai
Appeal Number ITA 4755/MUM/2008
Duration Of Justice 5 year(s) 13 day(s)
Appellant OMCI MARINE SERVICES P. LTD, MUMBAI
Respondent ITO 10(3)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 31-07-2013
Date Of Final Hearing 23-07-2013
Next Hearing Date 23-07-2013
Assessment Year 2003-2004
Appeal Filed On 18-07-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI !!' !!' !!' !!' # # # # BEFORE SHRI RAJENDRA SINGH AM AND SHRI SAN JAY GARG JM /. I.T.A. NO.4755/MUM/2008 ( $' $' $' $' %' %' %' %' / ASSESSMENT YEAR: 2003-04) OMCI MARINE SERVICE PVT. LTD. 2602 ODYSSEY HIRANANDANI GARDENS POWAI MUMBAI :-400 059. $ $ $ $ / VS. INCOME TAX OFFICER 10(3)(3) MUMBAI . & /. ' ./ PAN/GIR NO. : AAACO4266 F ( &( / APPELLANT ) : ( )*&( / RESPONDENT ) &( + / APPELLANT BY : SHRI PRAKASH K. JOTWANI )*&( + / RESPONDENT BY : SHRI JITENDRA YADAV $ - / DATE OF HEARING : 23. 07. 2013 /0% - /DATE OF PRONOUNCEMENT : 31 .07. 2013 1 / O R D E R PER :RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27.02.2008 OF CIT(A) -10 MUMBAI FOR THE ASSESSMENT YEAR 2003- 04. THE ONLY DISPUTE RAISED BY THE ASSESSEE IN THIS APPEAL IS REGARDING ADDITION MADE BASED ON DISCREPANCY WITH RESPECT TO TDS CERTIFICATE. 2 4755 M 2011 (AY 2003-04) OMCI MARINE SERVICES PVT. LTD. VS. ITO 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE WHO W AS PROVIDING MARINE SERVICES HAD SHOWN RECEIPT OF MANAGEMENT FEES AT RS. 28 36 288. THE AO HOWEVER NOTED THAT TDS CERTIFICATE ISSUED BY M/S. PRATIBHA SHIPPING CO. LT D. SHOWED GROSS RECEIPTS BY THE ASSESSEE AT RS. 52 17 733/- ON WHICH TAX HAD BEEN D EBITED AT RS. 2 63 688/-. THE AO THEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO W HY DIFFERENCE OF RS. 24 35 445/- SHOULD NOT BE ADDED IN TOTAL INCOME. THE ASSESSEE EXPLAINE D THAT THERE HAD BEEN DEDUCTIONS ON ACCOUNT DIFFERENCE IN THE QUANTUM OF MANAGEMENT FEE S PAYABLE BETWEEN THE PARTIES. HENCE THE COMPANY HAD ISSUED CREDIT NOTES TO THE T UNE OF RS. 23 03 754/- AND THE NET MANAGEMENT FEES OF RS. 28 36 288/- HAD BEEN DECLARE D. THE AO HOWEVER DID NOT ACCEPT THE EXPLANATION GIVEN. IT WAS OBSERVED BY HIM THA T THE ASSESSEE HAD SUFFICIENT TIME TO GET THE ACCOUNTS AMENDED WHICH HAD NOT BEEN DONE. THE A SSESSEE HAD CLAIMED TDS ON GROSS AMOUNT AND THEREFORE ENTIRE AMOUNT WAS REQUIRED TO BE DECLARED AS INCOME. HE ACCORDINGLY REJECTED THE EXPLANATION GIVEN AND ADDE D THE SUM OF RS. 24 35 445/- TO THE TOTAL INCOME. 2.2 THE ASSESSEE DISPUTED THE DECISION OF THE AO A ND SUBMITTED BEFORE THE CIT(A) THAT PRATIBHA SHIPPING COMPANY LTD. HAD RAISED DISP UTE WITH THE ASSESSEE IMMEDIATELY AFTER THE CLOSE OF YEAR AND SUBMITTED THAT COMPANY WOULD NOT REQUIRE THE SERVICES OF THE ASSESSEE WITH EFFECT FROM 1.5.2003. THE COMPANY HAD LODGED A CLAIM OF RS. 2 48 87 683/- AND ULTIMATELY THE MATTER WAS SETTLED ON 4.7.2003 W HEN IT WAS AGREED THAT THE COMPANY THE ASSESSEE COMPANY WOULD BE ALLOWED A REDUCTION O F MANAGEMENT FEES OF RS. 23.03 753/-. SINCE THE SETTLEMENT WAS AFTER THE CL OSE OF YEAR THE ASSESSEE HAD DEBITED THE SAID COMPANY WITH THE FULL AMOUNT OF RS. 52 71 733/-. THE AO HOWEVER OBSERVED THAT THE SETTLEMENT ONLY MENTIONED THAT UPON A RECE IPT OF RS. 32 74 LACS ALL PAST CLAIMS STAND SETTLED. THERE WAS NO MENTION WITH REGARD TO REVERSAL OF ANY MANAGEMENT FEES. FURTHER THE CREDIT NOTE RAISED BY THE ASSESSEE WIT H REGARD TO REVERSAL OF MANAGEMENT FEES WAS A UNILATERAL ACT AND HAD NO AUTHENTICATION FROM PRATIBHA SHIPPING. THE CIT(A) THEREFORE REJECTED THE EXPLANATION GIVEN AND CONFI RMED THE ADDITION MADE BY THE AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 4755 M 2011 (AY 2003-04) OMCI MARINE SERVICES PVT. LTD. VS. ITO 3. BEFORE US THE LD. AR FOR THE ASSESSEE SUBMITTED THE COPY OF THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEETS OF M/S. PRATHBHA SHIPPIN G COMPANY PVT. LTD. TO POINT OUT THAT MANAGEMENT FEES DECLARED BY THEM WAS ONLY RS. 33 14 105/- WHICH MAY HAVE INCLUDED SOME OTHER MANAGEMENT FEES ALSO. IT WAS PO INTED OUT THAT THEY HAD RECEIVED MANAGEMENT FEES OF RS. 52 71 73/- THEY WOULD NOT HAVE CLAIMED EXPENSES ONLY TO TUNE OF RS. 33 14 105/-. IT WAS ALSO SUBMITTED THAT THERE HAD DISPUTES WIT H THE SAID COMPANY AND THEREFORE THE ASSESSEE COULD NOT OBTAIN THE DE TAILS EARLIER. IT WAS REQUESTED THAT THE SAME MAY BE ADMITTED AS ADDITIONAL EVIDENCE. LEAR NED DR ON THE OTHER HAND SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND PLACED RELIANCE ON THE FINDINGS GIVEN IN THE RETROSPECTIVE ORDERS. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED RIVAL SUBMISSIONS CAREFULLY. THE DISPUTE IS REGARDING ADDITION ON ACCOUNT OF DISCREP ANCY BASED ON TDS CERTIFICATES ISSUED BY PRATIBHA SHIPPING COMPANY PVT. LTD. AS PER THE T DS CERTIFICATES A SUM OF RS. 52 71 737/- WAS RECEIVABLE BY THE ASSESSEE. THE ASS ESSEE HOWEVER DECLARED INCOME OF ONLY RS. 28 36 288/- ON ACCOUNT OF MANAGEMENT FEES. THE DIFFERENCE WAS THEREFORE ADDED BY AO AND CONFIRMED BY CIT(A). THE CASE OF TH E ASSESSEE IS THAT THERE WAS DISPUTE WITH PRATIBHA SHIPPING COMPANY AND THE ISSU E WAS SETTLED AFTER THE CLOSE OF THE ACCOUNTING YEAR AS PER WHICH THE ASSESSEE HAD TO IS SUE CREDIT NOTES TO THE SAID PARTY WHICH WAS THE REASON FOR SHOWING REDUCED MANAGEMENT FEES. IT HAS ALSO BEEN SUBMITTED THAT SINCE THERE HAD BEEN DISPUTE WITH THE PARTY T HE ASSESSEE COULD NOT PRODUCE ANY MATERIAL IN CONFIRMATION OF THE CLAIM FROM THE SAID PARTY. NOW THE ASSESSEE HAS PRODUCED A COPY OF THE PROFIT AND LOSS ACCOUNTS AND BALANCE SHEET OF THE SAID COMPANY WHICH SHOWS THAT THEY HAD CLAIMED LOWER EXPENSES ON ACCOU NT OF MANAGEMENT FEES. IN OUR VIEW THE MATTER REQUIRES FRESH EXAMINATION TO ARRI VE TO A FAIR CONCLUSION IN THE MATTER AFTER EXAMINATION ON ACCOUNTS OF THE SAID INCLUDING THE SETTLEMENT MADE BETWEEN TWO PARTIES. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR PASSING A AFRESH ORDER AFTER NECESSARY EXAMINATION IF NECESSARY BY 4 4755 M 2011 (AY 2003-04) OMCI MARINE SERVICES PVT. LTD. VS. ITO SUMMONING M/S. PRATIBHA SHIPPING COMPANY PVT. LTD . AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. -3 $'- 44 5467844 4 9- - : ORDER PRONOUNCED IN ON 31 ST DAY OF JULY 2013 . 1 /0% $3 31.07.2013 0 ! SD- SD/- ( SANJAY GARG ) ( RAJENDRA SINGH ) /JUDICIAL MEMBER 4 / ACCOUNTANT MEMBER MUMBAI: $4 DATED : 31. 07.2013 $ . /. PRAMOD KUMAR PS 1 1 1 1 )- )- )- )- =%- =%- =%- =%- / COPY OF THE ORDER FORWARDED TO : 1. &( / THE APPELLANT 2. )*&( / THE RESPONDENT 3. > ) ( / THE CIT(A) 4. > / CIT - CONCERNED 5. ?! )-$ / DR ITAT MUMBAI 6. !@' A / GUARD FILE 1$ 1$ 1$ 1$ / BY ORDER 6 66 6 / (DY./ASSTT. REGISTRAR) / ITAT MUMBI.