ASST. COMMISSIONER OF INCOME TAX- 14(1)(2), MUMBAI, AAKAR BHAVAN vs. FOODLINK SERVICES INDIA PVT LTD, MUMBAI

PER OM PRAKASH KANT, AM The captioned appeals by the Revenue for assessment years 2017-18 and 2018-19 are directed against separate orders passed by the Commissioner of Income-tax (Appeal)-National Faceless Appeal Centre(NFAC), Delhi [in short the Ld. CIT(A)] . The appeals for assessment year 2017-18 are arising from scrutiny assessment order under section 143(3) of the Income-tax Act, 1961 ( in short the Act) and subseq 154 of the Act, wher arising from scrutiny Act. As common is and therefore same w this common order fo 2. Firstly, we take arising from assessm raised by the Revenu 1.Whether on in law, the Ld 2,58,78,235/ of the Act of th 2 Whether on in law, the L assessee faile source of the 3 Whether on in law, the Ld results are ac results cann taxation whil 196l to reje addition(s)/di 4 The appella grounds be restored. 3. The learned dep this appeal is filed referred to the applic Foodlink quent rectification order passed eas the appeal for assessment y y assessment order under sectio sues-in-dispute are involved in were heard together and dispos or sake of convenience. e up the appeal for assessmen ment order u/s 143(3) of the Ac ue reproduced as under: n the facts and in the circumstances of th d. CIT(A) was justified in deleting the add - made by the AO on account of cash cre he Income-tax Act, 1961. n the facts and in the circumstances of th Ld. CIT(A) has erred in ignoring the fa ed to discharge the onus to prove the gen cash deposit in its account. n the facts and in the circumstances of th d. CIT(A) was justified in holding that on ccepted by the AO, the sale reflected in ot be doubted otherwise it amounts e there is no such provision as per Inco ect the books of account while maki isallowance(s). ant prays that the order of the CIT(A) on set aside and that of the Assessing partmental representative (DR) with a delay of seven days. T cation of the Assessing Officer fo Services India Pvt. Ltd. year 2018-19 is on 143(3) of the n these appeals ed off by way of nt year 2017-18 ct. The grounds he case and dition of Rs. edit u/s 68 he case and act that the uineness of he case and ce the book those book to double me-tax Act, ing certain n the above Officer be submitted that The learned DR or condoning the delay in filing the ap matters, gazetted ho delay of seven days submission of the pa delay in filing the ap bonafide reason for condone the delay in adjudication. 4. Briefly stated fa limited company, was engaged in the bus catering and food par companies namely M and M/s Foodlink B merged with the ass assessee filed return income at ₹1,64,23,3 revised its return o income at ₹80,83,490 was selected for scru the Act were issu proceedings, the A ₹3,86,99,991/- durin ( i.e. the demonetizat Foodlink ppeal and submitted that due olidays and shortage of staff, t s in filing the appeal. We ha arties on the application for con ppeal. In our opinion there is a delay in filing the appeal, a n the filing the appeal and adm acts of the case are that the ass s incorporated in the year 1998 siness of restaurants, banquet rcels. During the year under con M/s Foodlink Restaurant India Banquet and Catering India Priv essee. For the captioned asses n of income on 30/10/2017 340/-. Subsequent to the merge f income on 08/02/2019 dec 0/-. The return of income filed utiny assessment and statutory ued and complied with. D Assessing Officer observed ca ng the period from 08/11/2016 tion period) in its bank accoun Services India Pvt. Ltd. ₹3,23,84,000/- were was legal tender note the cash deposited in deposited was genera explained that on 08 appearing in its boo during the demonetiz of accounts. But the assessee and in the of the made addition under section 68 of t considering the sub deleted the addition Revenue is on appea short the ‘Tribunal’) b 5. The learned co containing pages 1 to 6. In the grounds regarding the cash d the Assessing Office been deleted by the dispute are that in th business of providin Foodlink in specified banknotes (SBN) es. The assessee was asked to ex ncluding SBN. The assessee expl ated out of its business activitie /11/2016, cash balance of ₹3,4 oks of accounts and cash has zation period out of the cash av Assessing Officer rejected the c assessment order passed unde n of ₹2,58,78,235/- as unexplai the Act. On further appeal, the bmission and analysing facts made by the Assessing Officer al before the Income-Tax Appell by way of raising grounds as rep ounsel for the assessee filed o 44. s raised by the Revenue, the deposits of ₹ 2,58,78,235/- whi er as unexplained cash credit, Ld. CIT(A). The brief facts qu he instant case the assessee was ng restaurant services, outdoo Services India Pvt. Ltd. es. The assessee 44,11,199/- was been deposited vailable in books contention of the r section 143(3) ined cash credit Ld. CIT(A) after and evidences, r. Aggrieved, the late Tribunal (in produced above. a paper book e sole issue is ich was held by but same has ua the issue in s engaged in the or catering and management of food cash deposit of ₹3, during the demonetiz deposited was genera explained that on 08 appearing in its boo during the demonetiz of accounts. But explanation of the as (i) by way of l period from had suffici rooted it is exaggeratin (ii) late paym period from (iii) huge cash of accou demonetiza (iv) Variation i 6.1 The assessee w 01/04/2016, therefo Foodlink d and beverages. The assessee 23,84,000/- in a specified ba zation period. The assessee expl ated out of its business activitie /11/2016, cash balance of ₹3,4 oks of accounts and cash has zation period out of the cash av the Assessing Officer did n sessee due to following reasons late filing of VAT and service tax m April 2016 to September 201 ient time to manipulate its sale s unaccounted money in the b ng its sales. ment of VAT and service tax m April 2016 to September 2016 balance of ₹3,44,11,199/-show unts as on 08/11/2016 ation. in cash flows compared to the pr was having cash in hand of ₹43 ore the Assessing Officer allowe Services India Pvt. Ltd. anknotes (SBN) lained that cash es. The assessee 44,11,199/- was been deposited vailable in books not accept the : x returns for the 16, the assessee es and therefore ank account by liability for the 6 wn in the books i.e. prior to revious years 3,24,459/-as on ed benefit of the said amount of open remaining amount of 6.2 The Assessing 93911/- for month o was deposited on 28 the service tax chal 258/- which was d 28/04/2017 after a d August, 2016 for a 06/09/2016, was de 234 days. The asses period from April to and amalgamated co data and lack of suffi the Gujarat VAT ret India Private Limited 2016 and Karnata restaurants India P quantum of data an same. The service tax while computing the the statutory auditor with interest for the contentions of the as Foodlink ning cash in hand and made a f ₹2,58,78,235/- [ = 3,23,84,000 Officer noted that service ta of April, 2016 which was due 8/04/2017 after a delay of 357 lan for June 2016 for an amo due on 06/07/2016 but was delay of 296 days. Similarly, the amount of ₹2,34,173/- which eposited on 28/04/ 2017 i.e. ssee explained that service tax September 2016 of amalgama ompany were filed late due to hu icient manpower to compile the turns of M/s Foodlink banque d for the period from Septemb aka and Telegna VAT retur Private Limited were filed late nd lack of sufficient manpower x, and VAT paid late due to typ net tax liability. The error was r and accordingly the liability months from June 2016 to Au sessee were rejected mainly on Services India Pvt. Ltd. 0 – 43,24,459]. ax challan of ₹ on 06/05/2016 days. Similarly ount of ₹ 1,55, s deposited on e service tax, for h was due on after a delay of returns for the ating companies uge quantum of same. Similarly et and catering ber to February rns of Fodlink e due to huge r to compile the ographical error s pointed out by was paid along gust, 2016. The the ground that assessee failed to f relevant period along 6.3 Further, the As keeping of huge ca expenses or cash p high cash sales to to October 2016 (i.e. 3 revenue is received i high in and around cash balance for the and sales in the mon “7.6 Further, appellant is t always high has provided November in October of pre Date

08-Nov-13

08-Nov-14

08-Nov-15

% of cash

Month of Oct

Balance balance

1,95,97,165

78,24,967

40%

2,12.32.249

94%

3,67,73,840

3,03,72,738

83%

assessee explained average cas nd subsequent years as under :
Services India Pvt. Ltd.
ears as under:
ness of the balance is appellant month of e month of h sales to total

To 2013-14

2014-15

2015-16

2016-17

2017-18

1,2

2018-19

1,8

2019-20

1,3

%

5,23,12,513
6,90,95,830

20%

6,89,67,475
12,54,19,364

27%

6,93,45,659
15,32,17,841

20%

24%

25,26,32,473
27,55,07,891

22%

84,33,02,952
18,92,54,346

10%

15%

ng submission of the assessee of observing as under:
ils available in assessment order and of the appellant filed during the has been carefully verified.
d that the addition related to the cash de emonetization period treating it as unexpl u/s 68 of the Act has no correlations wit and Service Tax results and delay in p
AT and service tax. The period for which V e been filed belatedly are from April
016. Further, no one in the country has emonetization which happened on the Therefore, it cannot be said that the g of VAT and service tax return to manip higher. Further, the average month wise ains similar for most of the months.
that it is not the first time the appellant w e. Considering the business of the Ap
Services India Pvt. Ltd.
e the Ld. CIT(A) the written appellate eposit made lained cash th the delay payment of VAT and ST l, 2016 to knowledge evening of e Appellant pulate sales service tax was having ppellant, it always had c the appellant
November, th balance.
8.3 From the during the ye cash sale in by AO that th year is not fou
8.4 From the that the appe bank account substantiates business of t account:
8.5 The cas
Rs.1,95,97,16
Rs.78,24,967
sales as on and cash ba works out to 9
has been sho shown at R balance. The by the Depa appellant lay contention of enquiry or a contention of context, disb appellant bef taxation.
8.6 It is a discrepancy i of account ha
Act, 1961. Th books have t
Foodlink cash balance. Looking at the nature of b t, it has more business activity in the herefore, the Appellant needs to maintai e details provided by the appellant the ear under consideration is more or less i all preceding years. Therefore the reaso he cash sales has increased drastically und tenable.
details provided by the appellant it is a ellant was regularly depositing the huge t in previous years as well as subseque s that the cash is having a major role in s the Appellant which is deposited regular h sales as on 08.11.2013 has been 65/- and cash balance has been 7/- which works out to 40% cash balance
08.11.2014 has been shown at Rs.2,2
lance has been shown at Rs.2,12,32,24
94% cash balance. The cash sales as on 0
wn at Rs.3,67,73,840/- and cash balanc
Rs.3,03,72,738/- which works out to book results of earlier years have not be rtment. The judicial decisions relied up y that where the books of accounts f the appellant have not been rejected any valid reason, the partially disbe f the appellant was not permissible and elieving the cash held in the cash bo fore the demonetization would amount fact that the auditor has not pointe in the accounts of the appellant. Further ave not been rejected by the AO u/s.145( he purchases and the stock position dep thus been accepted by the AO and the Services India Pvt. Ltd.
ent years. It sales of the rly in bank shown at shown at e. The cash
26,06,011/-
49/- which 08.11.2015
ce has been 83% cash een doubted pon by the s and the d based on elieving the d the same ooks of the t to double d out any r, the books
(3) of the IT icted in the cash sales were made o books of ac corresponding be rejected. T the entries in unless some rejected by th regarding any the appellant.
cash balance making an ad accounted fo books of acco cash deposite appellant and nature & sou money was accounts and cannot be sa explanation a that the appe account in the its business period prior
08.11.2016 a is also a fac banquets & c in abundanc immediate pr deposit durin of the AO hav have already the trading a unaccounted have once be gross profit a unaccounted then it has to either no cor were no such Foodlink out of accounted stock. The sales recor ccounts having been accepted by th g cash deposit made out of such cash sa
There is merit in the submission of the app the books of accounts depict a true stat contrary evidence is found and the he AO. In the instant case, there is no s y evidence about bogus sales or bogus p
. The AO has made the addition by not ac e available in the regular books of acco ddition on account of deposit of cash wh r in the books of accounts without re unts, is totally unwarranted. In the instan ed was duly recorded in the books of acc d the appellant offered an explanation reg urce being the cash sales. In the presen duly recorded and accounted in the d the source was also explained as cas aid that the appellant failed to give s about the nature & source of cash depos ellant deposited many times more cash i e earlier year, shows that it was a regula to deposit the cash in the bank even to the announcement of demonet and these facts have not been negated by ct that the appellant’s business is of catering and parcel sales where there are e. Thus the track records of deposit receding year justify the genuineness o ng the demonetization period. Further, th ve resulted in double addition because been accounted for while arriving at gro account and then adding them separate cash. This means that sales of Rs.2,5
een credited in the trading account form and then also adding them separately cash of Rs.2,58,78,235/-. If sales are to o be shown that these are bogus sales a rresponding purchases with the appella purchases against these sales.
Services India Pvt. Ltd.
ounts. Thus hich is duly ejecting the nt case, the count of the garding the nt case, the e books of sh sales. It satisfactory sit. The fact in the bank ar feature of during the tization on y the AO. It restaurant, e cash sales of cash in of the cash he approach these sales oss profit in ely also as 58,78,235/- ming part of treating as be doubted and there is ant or there

87 lakhs during the year. According to th e cash sales being included in the total tu e year under consideration, sales offered per the invoices issued and the assessee s has been caused to the coffers of th me-tax, hence, the source of the dep explained.
e Assessing Officer noticed that all the c khs but aggregate of which being more has not complied to Rule 114E of Income which the assessee was required to re ing the specified sum of ₹ 2 lakh for s
However the assessee referred to Central
T), circular dated 22/12/2016 and subm licable for each transaction and not on refore, there was no requirement for repo le 115E of Income tax rules,1962. earned counsel for the assessee submitte tails of cash deposit and cash sales, cop of cash sales, ledger account of p e cash sales, stock of finished goods for rresponding to the assessment yea of cash book was filed before the lower a ecorded incorrectly that no cash book for stained the addition for this reason.
servation of the facts in the case of the on that the only basis for treating the cas sh credit by the Assessing Officer is c books of accounts immediately prio od as compared to no cash sales either
Therefore the addition has been main sales are bogus or non-genuine. In our op ash sales were recorded in the previou d that such cash sales made in the ye ogus. The Assessing Officer has ignored out of stock genuinely held and acquir urchase invoices, which were duly produc er, but same were not doubted by him. Th controvert the copy of purchases corresp register, filed by the assessee in the pa ssing Officer suspected on the cash sal re below ₹ 2 lakhs and made on the sa nion in view of the festival season of ‘Diw e ruled out unless proved to be otherwis
Services India Pvt. Ltd.
d to value- e paid tax e revenue posit of ₹
cash sales than ₹ 2
e-tax rules, eport cash sale of the l Board of mitted that aggregate orting such ed that all py of cash purchases the entire ar under authorities, the period assessee, sh deposit ash sales or to the r before or ly on the pinion just us year, it ear under d the fact red by the ced before he learned ponding to aper book.
es for the ame date, wali’, such se. It is for the Assessing Offic allegations. The find suspicion and no do by the Assessing Of genuine. In our op place of the evide
Coordinate Bench of ACIT in .ITA No. 168
“10. We find t to prove that actually amo which had ul and share pre addressed th and surmise totally unsus assessee had Cyprus and bank charge
18621973.93
route as shar assessee had listed above.
the stand tha route. The as for the revenu not done in th proceeded to suspicion how legal evidence to bring on re is conspicuou that is relied search which the details of the said mate assessee com back in the fo from Cyprus.
would go in f that the said assessee had the present
153C of the revenue to ar
Foodlink cer to bring on record evidences to su ding of the Assessing Officer is based on t ocumentary evidence have been brought
Officer to establish that such cash sales inion, suspicion, howsoever strong, ca ences. Similar finding has been given f Tribunal in the case of Alchemist Touch
89/Del/2022, which is reproduced as und that from perusal of the records, there is n t the „amounts sent‟ shown in the ha unts sent by assessee company in ha ltimately found its way in the form of sh emium under FDI route. The revenue had his issue and made an addition purely o without any basis thereby making th stainable in the eyes of law. On the co d stated that LGF had sent 19500000
after deduction of LC charges and othe es , the assessee could ultimately re
3 U equivalent to Rs 100 crores in India re capital and share premium. In support d duly provided all the necessary doc
The assessee from the inception had alw at it had not sent any monies abroad ssessee cannot be asked to prove the ne ue to prove the same with cogent evidence he instant case. We find that the revenue make the addition on suspicion. It is tri wsoever strong would not partake the c e and hence a greater onus is casted on t ecord cogent evidences to justify its suspi usly absent in the instant case. The on upon by the revenue is the hard disk se h only contained
Alchemist T f „amounts sent‟ and „amounts received erial even suggested that the amounts w mpany in illegal route which in turn ha form of share capital and premium unde
. Though the presumption u/s 292C favour of the revenue, it cannot be bru d presumption is a rebuttable presum d duly discharged its onus on the same assessee herein is an assessee proc
Act and hence it is all the more necess rrive at the satisfaction that income or m
Services India Pvt. Ltd.
der:
no evidence ard disk is awala route hare capital d completely n suspicion he addition ontrary, the 0 U from er overseas eceive only a under FDI t of this, the cuments as ways taken in hawala egative. It is es, which is had merely ite law that character of the revenue icion, which nly material eized during
Touchnology d‟. Nowhere were sent by ad surfaced er FDI route of the Act ushed aside mption and e. Moreover, ceeded u/s sary for the materials or documents do indeed belong this angle, it 292C of the A 153A of the A 7.4
In view of f coordinate bench (su that cash sales of th are accepted to be deposited into bank bank account satisf accounts and therefo warranted for corres of the assessee. The accordingly allowed.
6.7 In view of the opinion that the ord well reasoned and accordingly, we upho revenue are accordin
7. Now, we take u year 2017-18 arisin
Assessing Officer rec section 68 of the Ac section 143(3) of the reproduced as under 1. Whether on in law, the La
2,58,78,235/
dated 30.12. discussed in the tune of R being assesse
Foodlink oes not belong or pertain to the searched p gs to third person (i.e 153C assessee). V t could be safely concluded that presum
Act would apply only to the person proc
Act and not for the assessee u/s 153C o facts of instant case, respectfully, follo upra), we reject the finding of the lower a he assessee are not genuine. Once the c e genuine, the cash received thereon k account by crediting the cash and de factorily explain the credit entry in the fore no addition in terms of section 68 of sponding cash deposit of ₹ 34,50,000/-in e ground Nos. 2 to 4 of the appeal of the .”
aforesaid discussion, we are er of the Ld. CIT(A) on the issu we do not find any infirmity old the same. The grounds of th gly dismissed.
up, the appeal of the Revenue ng from rectification order p ctifying the quantum of additio ct while passing the assessme e Act. The grounds raised by t
:
n the facts and in the circumstances of th a, CIT(A) failed to appreciate that an add
- was required to be made in the order
2019 u/s 68 of the Act, 1961 for th the said order, whereas the addition wa
Rs. 2,58,78,235/- only resulting in the to ed lower by Rs. 21,81,306/-?
Services India Pvt. Ltd.
of the Act.”
owing the authorities cash sales and later ebiting the e books of f the Act is n the case e assessee e of considered ue in dispute is y in the same, he appeal of the for assessment passed by the on made under ent order under he Revenue are he case and dition of Rs.
u/s 143(3) he reasons as made to otal income

AMIN
SUN

PRA

VIVE

DALM

TOT

YABEN JITENDRAJHAVERI
3
SHANT SUBHASH PRATAP
9
EK MADANLAL HINDUJA
4
LMIA ENTERPRISE HOLDINGS
6
TAL
1044
IT(A), the assessee submitted t ring Covid period, therefore fe o the notice u/s 133(6) of the quested for providing list of th y notice u/s 133(6) of the Act bu hareholders was not provided a herefore, the assessee obtained r ubmitted before the ld CIT(A IT(A) called for remand report fr ny adverse remark on the addit taking into consideration com ct of 53 shareholders which w ding and documents in r during appellate proceedings he addition observing as under:
l of the assessment order reveals that the anything about any information available he conclusion that the parties did ess. No inquiries were conducted to bring
Services India Pvt. Ltd.
Act. Before the he shareholders ut despite three and assessment reply from those
A) as additional from the AO but tional evidences.
mparison of the were accepted in respect of 14
as additional e AO has not e with him to d not have g on records, any material transactions anything in t information o come to the ungenuine. In positive evide appellant an nowhere disc carried out by the specific m unexplained establish tha evidences ha investment in hand the app during the proceedings t genuine trans shares and th laid down by the addition u proper inquir respect of the not sufficient
9.12 In view various courts u/s.68 of the unconfirmed
3(b) of appeal
8.5 We have heard relevant material on capital received from treated by the Asses reason that those 14
Foodlink l to arrive at the conclusion of holdi were not genuine. The AO has no the body of order to suggest whether or any incriminating evidences in his p conclusion that the investment in s n this regards, the AO failed to bring on ence of flow of cash or cash exchanged nd/or the final beneficiary. Further, th cussed the issue or the modus operandi a y the appellant. The AO has also not zero modus operandi employed if any for carr investment. The AO has not made any at the investment was from a nonexisten ave been brought on record to indica n shares was not a genuine transaction.
pellant has furnished all the documenta assessment proceedings as well a to support its contention to substantiate sactions where various investors have he have been duly allotted these shares y the Hon’ble High Court as well as Sup u/s.68 of the IT Act was not justified, wit ries and bringing on records any advers e parties. Mere non-receipt of reply u/s ground for making the addition.
of the facts of the case and decisions s on this issue, the addition of Rs. 10, e IT Act made by AO on account of sha by the parties is hereby deleted. Groun l are allowed.”
d rival submission of parties a record. The issue in dispute is m 14 shareholders out of the 6
sing Officer as unexplained cas
4 shareholders did not respon
Services India Pvt. Ltd.
nt entity. No ate that the On the other ary evidences as appellate e that it is a e applied for s. Further, as preme Court thout making e findings in s.133(6) was rendered by ,44,64,764/- are premium nd no.3(a) &
nd perused the regarding share
67 shareholders sh credit for the nd to the notice issued under sectio proceedings, the ass shareholders, identic of 53 shareholders o received from those
Assessing Officer as of share capital rece order. The assessee all the shareholders
486 to 553 of the pa
Assessing Officer ha shareholders on the documents filed in r
CIT(A) is justified in Officer. In view of t find any error in the The ground Nos. 1
accordingly dismissed
9. In ground No. t mainly objected for a the disallowance of re
9.1 The brief facts q incurred ₹13,37,04,0
Foodlink on 133(6) of the Act. Durin sessee filed documents in res cal to the documents which were out of the 67 shareholders. Th
53 shareholders was already a genuine and no addition was m eived from those shareholders has filed copy of the documen before us also, which are ava aperbook. We are of the opinion s accepted share capital receiv e basis of a set of documents respect of remaining 14 shareh deleting the addition made by the above facts and circumstan order of the Ld. CIT(A) on the i and 2 of the appeal of th d.
three and four of the appeal, th admitting the additional eviden ent expenses amounting to ₹ 54
qua the issue in dispute are th
073/- towards rent and conduct
Services India Pvt. Ltd.
holders, the Ld.
y the Assessing nces, we do not ssue in dispute.
he Revenue are he Revenue has nce in respect of 4, 63, 632/-.
hat the assessee ting charges. As no tax was deducted draft assessment
₹13,37,04,073/- i.e invoking the provisio the assessee claimed on rent for the staff owners to whom ren into consideration of expenses amountin disallowance under s the assessee filed a found satisfactory b admission of the summarized the facts reproduced as under 10. Ground n expenses to disallowance following issu
(a) The AO er being rent pai
Appellant al providing the Number (PAN claimed that i been incurred therefore, the Foodlink d on the rent payment, the Asse order proposed as why
. 4,01,11,222/- might not ons of section 40(a)(ia) of the A d to have filed detail in respect and Permanent Account Numb nt was paid. The Assessing Offi f the submissions of assessee, g to Rs. 54,63,632/- inste section 40(a)(ia) of the Act. Befor additional evidences, however by the Assessing Officer and h additional evidences. The L s in relation to the issue in disp
:
no. 4 of appeal is related to the disallow the tune of Rs. 54,63,632/-. In res of rent expenses the appellant has ues:
rred in making the disallowance of Rs.
id for accommodation of employees on th legedly failed to substantiate the e e addresses of premises and Perman
N) of owner of premises taken on rent. T it has duly substantiated that the rent ex d wholly and exclusively for the busines disallowance made by the AO shall be d
Services India Pvt. Ltd.
30%
of be disallowed
Act. In response of rooms taken ber (PAN) of the icer after taking disallowed rent ead of making re the Ld. CIT(A) same were not he opposed the Ld. CIT(A) has pute , which are wance of rent spect of the s raised the 54,63,632/- he ground the expenses by nent Account
The Appellant xpenses have ss purposes, deleted.

(b) The AO er without provid
10.1 During incurred expe charges. The deducting an assessment o
30% of Rs. 13
to deduct TDS the appellant and the PAN
AO after co disallowance making the d the draft a disallowance is as under:
“As per draft addition of Rs
& conducting
@30% on t communicated dated.30/04/
furnished the was noticed t staff rooms t whom the re rooms is less assessee faile the particular owner, it is resulted as ad
Foodlink rred in making the disallowance of Rs.
ding an opportunity of being heard to the the year under consideration, the Ap enses of Rs.13,37,04,073/- being rent an appellant had made the payment of ny TDS. Therefore the AO in para order proposed the disallowance u/s 40
3,37,04,073/- i.e. Rs. 4,01,11,222/- as S on the payment of Rs. 13,37,04,073/-.
t furnished particulars of staff rooms ta number of the owner to whom the rent w onsidering the reply of the appellant of rent expenses by Rs. 54,63,632/
disallowance u/s 40(a)(ia) of the Act as assessment order. The main reason of rent expenses of Rs. 54,63,632/- pro assessment order vide para No.10 it is p s.4,01,11,222 for failure of deduction of g charges. This addition was proposed total claim of expenditure. This pro d to the assessee vide draft assess
/2021. In response to this show cause t e information, after going through the in that the assessee failed to furnish the p taken for rent and the pan number of t nt was paid. Even though the claim fo s than the ceiling limit for collection of ed to substantiate the claim of payment rs of address of the staff rooms and PAN construed that the claim is not genuin ddition of Rs. 54,63,632/- as under-
Services India Pvt. Ltd.
54,63,632/-
Appellant.
ppellant has d conducting rent without
10 of draft
0(a)(ia) being it had failed
In response, aken for rent was paid. The t made the - instead of proposed in of making ovided by AO proposed for f TDS on rent
U/s.40(a)(ia) oposal was sment order the assessee nformation, it particulars of the owner to r these staff f TDS as the by providing
N number of ne. Hence it Foodlink

Services India Pvt. Ltd.
Services India Pvt. Ltd.
Services India Pvt. Ltd.
Services India Pvt. Ltd.
Services India Pvt. Ltd.
10.2 During submitted th
13,37,04,073
assessment proposed to m the ground th
The Appellant rent expenses have been de of the submis of Rs. 54,63, stating that t not given by claimed that threshold limi
9.2 After considerin and rejoinder of the observing as under:
“10.3 During submitted tha running resta
The Appellant the country. I the country th various staff
Foodlink the appellate proceedings, the app hat it had incurred rent expense
3/- for the subjected year. The A proceeding through draft assessm make the disallowance u/s 40(a)(ia) of hat the Appellant has not deducted the TD t claimed that it had filed complete detail s on 02/05/2021, explaining the AO th educted by it wherever applicable. On co ssion of the Appellant, the AO made a di
,632/- out of the total rent of Rs. 13,3
the PAN of the landlord or the premises a the Appellant. The appellant further cl these amounts represents the rent whic it as prescribed in section 194I of the Act.
ng the remand report of the A assessee, the Ld. CIT(A) delet g the appellate proceedings the app at the business of the appellant compan aurants, outdoor catering, and manageme t has claimed that it has hotels / restaura
It also takes the contract of outdoor cate hroughout the year. Therefore, the Appe
(i.e. serving staff, cook, attendant etc) wh
Services India Pvt. Ltd.
es of Rs.
O, in the ent order, f the Act on DS on rent.
ls related to hat the TDS onsideration isallowance
37,04,073/- address are laimed that h is below
”
Assessing Officer ted the addition pellant has ny is that of ent services.
ants across ering across ellant needs ho are hired by the Appell staff in additi rent paid alon for which ren sample rent a i) Sangita Raj ii) Charushila iii) Rosy Paul iv) Jagdish Ta v) Savio Varee vi) Shevanta B vii) Sunanda T viii) Kamalaka ix) Raju Jaisw x) Arun Kisan xi) K Shanakr xii) K Vanaja xiii) K Raghav xiv) K Edu Ko xv) K Narsam xvi) K Venkata xvii) Sharda S xviii) Surekha xix) P Lakshm
10.4 As the appellant befo of disallowan report was c above details remand repor appellant can
Foodlink lant. The Appellant provides accommoda ion to salary. The appellant has submitte ng with the Name of the parties, PAN an nt has been paid and amount paid alon agreement of following parties:
j Bhagat a Patil
Chettiar alreja ed
Bhavku
Tatoba More ar Takale wal n Londhe riah vender ondalu mma a Ramana
Sanjay Parte a Nagesh Sakpal mi ese were the additional evidences fil fore the appellate authority in respect to t nce of rent expenses of Rs. 54,63,632/- called for from the AO for the examina s provided by the appellant. The AO in r rt has submitted that the veracity of the c nnot be ascertained from just the s
Services India Pvt. Ltd.
-, a remand ation of the reply to the claim of the ample rent agreement a appellant doe assessment o
10.5 The rep however, the discrepancy i submitted by which the AO
“Even though ceiling limit f substantiate t address of the The appellant disallowance the details an 10.6 Further, appellant the 40(a)(ia) of th deducted the making disa
54,63,632/-.
ought to have making such 10.7 In vie documentary of Rs. 54,63, expenses of R appeal is allo
9.3 We have heard r relevant material on genuineness of the r
Assessing Officer in the landlord or the a assessee in the addi assessee of the genu
Foodlink and the additional evidence submitte es not answer the issue raised by the order.
port submitted by the AO has been e AO has not brought out any def in respect to the documents or additiona y the appellant. The main reason on th
O made addition of Rs. 54,63,632/- is as u h the claim for these staff rooms is les for collection of TDS as the assessee the claim of payment by providing the pa e staff rooms and PAN number of owner.”
t following the reason which led the AO of rent expenses of Rs. 54,63,632/- has nd documentary evidences to justify its st as per the draft assessment order iss e AO proposed to make the disallow he Act on the ground that the Appella
TDS on rent. However, the addition wa allowance of rent expenses to the tu
If such addition was required to be ma e been given an opportunity of being he disallowance to the appellant.
ew of the above discussion and th evidences submitted by the appellant t
,632/- made on account of disallowan
Rs. 54,63,632/- is hereby deleted. Grou wed.”
rival submission of the parties a record. The issue in dispute is i rent expenses claimed by the a the remand report has submitt addresses of the premises were n itional evidence and therefore t uineness of the expenses could
Services India Pvt. Ltd.
under:
ss than the e failed to articulars of ”
for making s submitted tand.
sued to the wance u/s ant has not as finalized une of Rs.
ade, the AO eard before he details, the addition nce of rent und no. 4 of and perused the in respect of the assessee. The ld ted that PAN of not given by the the claim of the not be verified.

The Ld. CIT(A) howev of natural justice. Th order the Assessing
40(a)(ia) of the Act disallowance for lack
CIT(A) held that add the assessee, as not finding of the Ld. CIT remand preceding th address of the rooms available and therefo to verify. In such cir for such information assessee to file su proceeding. Since th verifying the said info finding of the Ld. C matter back to the fil the assessee to fil properties/rooms wh address of the owne
Assessing Officer. Th accordingly, allowed
Foodlink ver deleted the addition for viola he Ld. CIT(A) noted that in the d
Officer proposed disallowance i whereas in the final assessme king genuineness of the rental e dition made by the AO without t sustainable. However, we dis
T(A) on the issue in dispute. We e Assessing Officer specifically p s leased for staff and PAN of the ore said expenses could not hav cumstances, the Ld. CIT(A) sho from the assessee or should ha uch information before the A he Ld. CIT(A) has deleted the a ormation, we feel it appropriate
IT(A) on the issue in dispute le of the Assessing Officer, with le the details of complete a hich were taken on lease for staf er of those properties for veri he ground No. three and four of for the statistical purposes.
Services India Pvt. Ltd.
expenses. The ld t opportunity to sagree with the note that in the pointed out that owners was not ve been possible ould have called ave directed the AO in remand addition without to set aside the and restore the the direction to address of the ffs and PAN and ification by the f the appeal are 10. In the result, th
2017-18 are dismiss
2018-19 is partly allo
Order pronoun (SANDEEP SING
JUDICIAL M
Mumbai;
Dated: 30/01/2025
Dragon Legal/Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

Foodlink he appeals of the Revenue for a sed whereas appeal for the a owed for statistical purposes.
ced in the open Court on 30/0
d/-
S
GH KARHAIL)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Services India Pvt. Ltd.
01/2025. KASH KANT)
ANT MEMBER
R, gistrar) umbai