AUTO DIGITECH PRIVATE LIMITED(NOW MERGED WITH M/S T vs. AUTOMOBILE SOLUTIONS PVT LTD),MUMBAIVS.ITO WARD 7(2)(1), MUMBAI
| आयकर अपील य अ
धकरण यायपीठ, मुंबई |
IN THE INCOME TAX APPELLATE TRIBUNAL
“A” BENCH, MUMBAI
BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER
&
SHRI SANDEEP SINGH KARHAIL, HON’BLE JUDICIAL MEMBER
I.T.A. No. 1526/Mum/2025
Assessment Year: 2018-19
Auto Digitech Private Limited
(Now merged with M/s. TVS Automobile
Solutions Private Limited)
Plot No. Super A8 & A9
Kochar Bliss
Thiru. Vi. Ka Industrial Estate
Guindy
Chennai - 600032
[PAN: AAGCM2267G]
Vs
ITO, Ward Circle – 7(2)(1)
अपीलाथ/ (Appellant)
यथ/ (Respondent)
Assessee by :
Shri Kinjal Bhuta, A/R
Revenue by :
Shri Aditya M. Rai, Sr. D/R
सुनवाई क तार ख/Date of Hearing : 07/07/2025
घोषणा क तार ख /Date of Pronouncement: /07/2025
आदेश/O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order dated
05/06/2024 by NFAC, Delhi [hereinafter “the ld. CIT(A)”] pertaining to AY 2018-19. 1.1. There is a delay in filing the appeal. The assessee has explained the cause for the delay in its letter supported by an affidavit. We have carefully perused the contents of the affidavit and are satisfied that the assessee was prevented by reasonable and sufficient cause for not filing the appeal on time. The delay is condoned.
2. The grievance of the assessee reads as under:-
“1. The Ld. Assessing Officer (AO) has erred in passing an invalid
Assessment Order u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961,
I.T.A. No. 1526/Mum/2025
2
which is beyond the statutory time limit prescribed u/s. 153 of the Income
Tax Act, 1961. 2. The Ld. Commissioner of Income Tax Appeals - NFAC erred in dismissing the appeal under a complete misunderstanding that Grounds of Appeals &
Statement of Facts are not submitted. That the complete Grounds of Appeal
& Statement of Facts are part of the appeal form filed before CIT(A) and the dismissal is arbitrary and not at all justified.
The Ld. CIT(A) erred in confirming addition of Rs. 89,82,784/- u/s. 69C r.w.s. 115BBE of the Income Tax Act, 1961, without considering the merits of the case.
The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal.”
Ground No. 1 was not argued before us, therefore, the same is dismissed as not pressed. 5. Representatives of both the sides were heard at length. Case records carefully perused. 6. Briefly stated the facts of the case are that the return of the assessee was selected for limited scrutiny assessment under the E- assessment scheme, 2019 for examining the large sales promotion expenses vis-à-vis gross receipts. The assessee declared total income at Rs. 5,36,52,388/-. During the course of the scrutiny assessment proceedings, the AO interalia asked the assessee to justify its claim of sales promotion expenses and the percentage increase in the quantum in comparison with last year sales promotion expenses and justification for the increase. In compliance, the assessee submitted the following details of persons to whom the payments were made on account of sales promotion expenses during the year:-
I.T.A. No. 1526/Mum/2025
3
Sr. No Name
Address
PAN
Base
Amount
TDS deducted
1
MEDIAEDGE
CIA INDIA
PRIVATE
LIMITED
COMMERZ ,8TH
FLOOR,
INTERNATIONAL
B
AAACF4315L 4,256,322
87,759
2
SPECTRUM
TALENT
MANAGEMENT
GROUND FLOOR,
PLOT
NO.
C-142
Uttar Pradesh 201301
ABMFS3316G 1,145,313
22,836
3
EVENTZ
N
MORE office: 14/12 shivpuri colony
MUMBAI
400071
AEUPN8966Q 226,850
2,254
4
NETCORE
SOLUTIONS PVT
LTD
402, peninsula chambers MUMBAI
400013
AAACR2730D 186,571
3,883
5
HANSA
RESEARCH
GROUP PVT LTD
Sahney Business
Center A 1 st
AAACH9516M 124,580
2,506
6
GETTY IMAGES
MEDIA INDIA
PVT LTD
Indiabulls Finance Ce
MUMBAI 400013
AAFCP8968G
46,735
933
7
GLOBAL
MERCANTILE
SERVICES k.Sion
Chaman
House
CHSG.Near
Canar Mumbai
400022
AIFPA4748N
30,100
301
8
NITIN
GRAPHICS
SHOP NO 2, BDD
CHAWL
81,NEAR
MAHIND
WORLI
400018
AFUPT5343J
23,919
232
9
TIMES PRINTS
Office
No.7E,1st
Floor,
MUMBAI
400001
BBNPS4722E
15,900
150
10
POLYVALENT
DIGITAL
SERVICES
128, 1st Floor, Vipul
Trade
Center,
Gurgaon(Haryana)
122001
AAHCP4643E
12,864
256
I.T.A. No. 1526/Mum/2025
4
11
Other-TDS
Applicable
27,337
547
12
Other-TDS Not 37,829
13
Provision reversal
N.A.
(1,590,542) -
Total Business
Promotion
Bxpesnes
4,543,777
1. And insofar as the increase in the sales promotion expenses is concerned, it was explained that the expenses were incurred during the current year mainly for digital advertisement, lead generation, website optimization, for research on independent Gerage. Further expenses were incurred for outdoor events through outdoor agency as well as contractual employee hired for marketing. 7. The AO made independent enquiry and the following facts were found in relation to sales promotion expenses shown by the assessee:- Sr. No. Name PAN Base Amount Actual Payment Difference 1 MEDIAEDGE CIA INDIA PRIVATE LIMITED AAACF4315L 4,256,322 1,17,82,056/- 75,25,734/- 2 SPECTRUM TALENT MANAGEMENT ABMFS3316G 1,145,313 25,28,061/- 13,82,748/- 3 EVENTZ N MORE AEUPN8966Q 226,850 2,68,768/- 41,918/- 4 HANSA RESEARCH GROUP PVT LTD AAACH9516M 124,580 1,47,003/- 22,423/-
I.T.A. No. 1526/Mum/2025
5
5
GETTY IMAGES
MEDIA INDIA PVT LTD
AAFCP8968G
46,735
48,057/-
1,322
6
GLOBAL
MERCANTILE
SERVICES
AIFPA4748N
30,100
36,883/-
6,783/-
7
TIMES PRINTS
BBNPS4722E
15,900
15,900/-
Nil
8
POLYVALENT
DIGITAL SERVICES
AAHCP4643E
12,864
14,720/-
1,856/-
Total Business
Promotion Expesnes
58,58,664/-
Rs.
1,48,41,448/-
Rs.
89,82,784/-
The AO noticed huge variation in the amount received by Mediaedge CIA India Private Limited, Mumbai and Spectrum Talent Management, New Delhi. On receiving no plausible reply, the AO made the addition of Rs. 89,82,784/-. 8.1. When the additions were challenged before the ld. CIT(A), the proceedings could not be attended and the ld. First Appellate Authority dismissed the appeal on the basis of the material on record. 9. Before us, the ld. Counsel for the assessee vehemently stated that due to some changes in the corporate structure of the assessee, the proceedings could not be attended properly and because of the same, the appeal also could not be filed on time. The ld. Counsel for the assessee pleaded for a second opportunity to furnish necessary details in justification of the claim of expenditure. 10. We are of the considered view that a second opportunity should be given to the assessee. Therefore, we restore the issue to the file of the AO. The assessee is directed to furnish all the necessary details
I.T.A. No. 1526/Mum/2025
6
with supporting evidence in support of its claim of sales promotion expenses and the AO is directed to examine the same and decide the issue afresh after affording reasonable and adequate opportunity of being heard to the assessee.
11. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 8th July, 2025 at Mumbai. (SANDEEP SINGH KARHAIL)
ACCOUNTANT MEMBER
Mumbai, Dated 08/07/2025
*SC SrPs
*SC SrPs
*SC SrPs
*SC SrPs
आदेश क तलप अ ेषत /Copy of the Order forwarded to :
अपीलाथ! / The Appellant 2. "यथ! / The Respondent 3. संबं&धत आयकर आयु(त / Concerned Pr. CIT 4. आयकर आयु(त ) अपील ( / The CIT(A)- 5. वभागीय तन&ध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड. फाई/ Guard file.
आदेशानुसार/ BY ORDER,