M/S. SUGUNA VILASA SABHA,CHENNAI vs. ITO, NCW - 9 (4), CHENNAI

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ITA 2500/CHNY/2019Status: DisposedITAT Chennai11 May 2022AY 2015-163 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the onus was on the assessee to prove mutuality, and sufficient evidence was not provided. However, it also observed that the assessee's submissions and documents filed with the appellate authority were not considered. Therefore, the matter was remanded back to the Assessing Officer for verification.

What were the facts?

The assessee, an Association of Persons engaged in hospitality services, had an addition of Rs. 9,15,738/- to its income by the Assessing Officer on the grounds of absence of mutuality. The assessee contended that the appellate authority failed to consider submissions and documents establishing mutuality.

What were the issues?

Whether the appellate authority properly considered the assessee's submissions and documents regarding the principle of mutuality. Whether the assessee discharged its onus to prove the applicability of mutuality.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri N. Arjunraj (CA) for Shri S. Sridhar, Shri ARV Sreenivasan (Addl. CIT) –Ld. DR
For Respondent: Shri ARV Sreenivasan (Addl. CIT) –Ld. DR

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)

1.

Aforesaid appeal by assessee for Assessment Year (A.Y) 2015-16 arises out of the order of learned Commissioner of Income Tax (Appeals)-10, Chennai [CIT(A)] dated 14.06.2019 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 29.12.2017. The Ld. AR, drawing attention to ground no.3 of the appeal, assailed addition of Rs.9,15,738/-. The ground read as under: -

3. The CIT (Appeals) failed to appreciate that having not gone through the submissions filed with supporting details/documents vide letter dated 12.06.2019 establishing the transaction between the Appellant and the members of the Appellant to demonstrate the applicability of the principles of mutuality to come out of the charging provisions of the Act, the findings recorded in overlooking such materials/submissions from para 5 & para 6 of the impugned order were wrong, erroneous, unjustified, incorrect and not sustainable in law.

The Ld. AR submitted that the written submissions filed during the course of appellate proceedings were not considered and therefore, Ld. AR pleaded for restoration of appeal to the file of Ld. AO. It was the submissions that vouchers could not be produced before Ld. AO. The Ld. DR submitted that the assessee failed to substantiate the claim with documentary evidences. Having heard rival submissions, our adjudication would be as under. The assessee is an Association of Person (AOP) and engaged in providing hospitality services.

2.

The assessee admitted income under the head House Property and other sources. The Ld. AO added the amount of Rs.9.15 Lacs to the income of the assessee on the ground that the principle of mutuality was absent.

3.

During appellate proceedings, the assessee submitted that principle of mutuality was applicable on impugned items. However, in the absence of any evidences forthcoming from the assessee, the assessee was directed to furnish the relevant details to Ld. AO and Ld. AO was directed to verify such facts and arrive at correct conclusion. Still aggrieved, the assessee is in further appeal before us.

4.

We find that the onus was on assessee to establish that the impugned items were covered by the principle of mutuality. However, sufficient evidences were not furnished by the assessee during the 3 - course of appellate proceedings. We also find that the assessee had furnished a reply dated 10.06.2019 to appellate authority in support of each item along with supporting documents which has remained to be considered. Since the matter has already been remanded back to Ld. AO, the Ld. AO is directed to consider assessee’s submissions and documentary evidences and ascertain assessee’s claim. 5. The appeal stand partly allowed for statistical purposes.

Order pronounced on 11th May, 2022.

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