CIT vs. CAPITAL FACTORS & ASSET RECONSTRUCTION

$-3 * IN THE HIGH COURT -F ITA 643/2012 CIT OF DELHI AT NEW DELHI ! ..... Appellant : Ms. Anshul Sharma, for Sh. Abhishek Sr. Standing Counsel. t ..) e- Through Maratha, VETSUS CAPITAL FACTORS & ASSET RECONSTRUCTION ..... Respondent Through :Nemo. CORAM: I.ION'BLE MR. JUSTICE S. RAVINDRA BTIAT HON'BLE MR. JUSTICE R.V.EASWAR OITDER y, 21.11.2012 The Revenr-re in this case impugns an order of the Income Tax Appellate Tribunal (ITAT) dated 30.08.2011 in ITA 971/Dell20l1. lt urges that the Tribunal's order rernitting the rnatter for reconsideration by the Assessing Officer is erroneous' The assessee in the present case had filed its return for 2006-07; the same was taken-up for scrutiny. The major item of expenses was common personnel costs exceedilg Rs.17.02 lakhs. It was contended that the expenses were incurred on behalf of the assessee by M/s. Escorts Finance Ltd. and that the details were being rnaintained by it. 'fhe Assessipg Officer (AO) disallowed the clairn. The assessee's appeal led to the deletioq of the disallowance following a previous year's ruling. In the present case, however, the Tribunal noticed the facts and observed that the AO had proceeded pursuant to a previous remand and went on to state as follows: "6. In tlte present year, assessee has claimed common personal cost at Rs.17,62,725. In paragraph 5 of the order of the ITAI'extracted supra, vte have noticecl thot assessee sztbmitted before the Assessing Officer that 'a 2012:DHC:8031-DB

,} ( . cletails in respect of salary expenses, namely, register, form No. 16 of all the entployees were being maintained by Escorts Finance Ltd. These were prodttced before the Assessing Officer. We have specifically discussed the ttature of evidence filed by the assessee f'om the books of Escorts Finance Ltd. before the Assessing Officer. Learned Fit'st Appellate Authority has cleleted the clisalloy,ance after going through that evidence. In the present year excepr subntitting that it has reintbursed the expenses, assessee failed to fite any evidence. It submitted that IuI/s. Escorts Finance Ltd. no longer renruined tyith the a$essee and, therefore, it could not collect the details. Thzts, it emerges outfrom the record that evidence could not produced by the a.ssessee because of its separation from ]ul/s. Escorts Finance ltd' lIre finrt that there is a parity in the claitn nnde by the assessee in assessntent year 2003-04 as well as this assessnrcnt year. The only dffirence is that in asses,en?ent year 2003-0'1, assessee v,as able to produce the confirmation from M/s. Escorts Finance Ltd. as vell as the evidence maintained by lt[/s. Escorts Finance Ltd. in stpport of incm'rence of all these expenses. If ussessee was not in a position to collect the evidence then to our mind Assessing Officer at liast otrght to have requisite the details from IUI/s. Escorts Finance Ltd. before making the disallotvance. Considering the harclships of the assessee and the change in the circumstances, occufted on accotmt of separation of business, ve remit this issue to the file of the Assessing Officer for readjudication. The assessee shall first tty to nake efforts for siibmitting the reqtdsite details in ntpport of its claint. In case, it-tvas not practically possible for the assessee to collect that evidence then it may reqttest to tlte Assessing Officer for exercising his statutoty powers for requisitioning that evidence from lt[/s. Escorts Finance Ltd. Before - making such prayer, assessee shall specifically pin point the details of purroi, tn tvfrosi possession sttch iffirnmtion is lying. It wiII not ntake any vaglrc appltcition before tlte Assessing Officer. It has to submit the spb"tfii pa,"ttit,lars of the persons/entity along vith address, tvith whom, in iis tinderstanding, the evidence in support of its claim is lying. Assessing Officer shall readiudicate the isnrc after providing due opporttmity of hearing to the assessee and keeping in vieYt the past history if me asses.see in assessment year 2003-04. It is needless to say that the observations made by trs will not irnpair or injm'e the case of AO or would caLtse any preiudice to tlte defence/explanation of the assessee'" As carr be rroticed, the Tribr,rnal was conscious of the details which rvere presented before it as well as the fact that for the assessnlent year 2003-04, the assessee had produced confirmations from the concerned cornpanies in support of its clairns. Therefore, having regard to all the circumstances, the rernitting order was made. It was an unconditional remand, as borne out from the last sentence in the extract reproduced 2012:DHC:8031-DB

5 above. The Cor,rrt is, therefore, of the opinion that no substantial question of law arises. T'he appeal is accordingly dismissed. IIlJ*{r*t, S. RAVINDRA BHAT. J rl L\ *," n.v.naswAn. J NOVEMBErR 21.2012 'ajk' 2012:DHC:8031-DB