JT. CIT (OSD), CC-6(4), MUMBAI vs. J.M.BAXI & CO., MUMBAI

In ground 1, the revenue has challenged the deletion of disallowance of Rs.1,73,95,853/- made under section 37(1) of the Act.

Briefly the facts are, the assessee is a resident company stated to be the largest shipping agency house in India and provides various shipping support services. It is stated that 200 national and international shipping companies avail their services. For the assessment year under dispute, assessee filed its return of income originally on 29-11-2013 declaring loss of Rs.16,86,07,939/-. The return of income so filed was subsequently revised by declaring loss of Rs.19,83,96,143/-. As observed by the assessing officer, the assessee operates as licensed customs house agents at most Indian ports and assessee and its group companies provide clearing and freight forwarding services including custom clearance, compliance with import / export regulations and comprehensive multi nodal point to point service comprising land, rail, air and sea transport and warehousing. In course of assessment proceedings, the assessing officer noticed that the assessee has debited certain expenditure for making payments to port employees and some other expenditure, which are otherwise not sanctioned as per law of the land. He further observed, the amount claimed as expenditure was neither credited nor debited to the P&L Account, but were routed through the balance-sheet. Further, he observed, the assessee, on its own has disallowed 25% out of such expenditure and claimed deduction of the balance amount. While doing so, the assessee has referred to a decision of the Tribunal in case of a group company. The assessing officer, however, did not accept the claim of the assessee and concluded that the expenditure claimed not being sanctioned by law, cannot be allowed. Since, the assessee itself had disallowed an amount ofRs.57,98,617/-, the assessing officer disallowed the balance amount of Rs.1,73,95,853/-. Assessee contested the above disallowance before learned Commissioner of Income-tax (Appeals). After considering the submissions of the assessee and taking note of the fact that his predecessor in office, has decided the issue in favour of the assessee in assessment year 2012-13, followed the same and deleted the disallowance made by the assessing officer.

Shri Y.P. Trivedi, learned Senior Counsel appearing for the assessee, at the outset, submitted that the issue is squarely covered by the decision of the Tribunal in assessee’s own case for assessment year 2014-15. He also drew our attention to the relevant observations of the Tribunal in the said order.

Shri Manpreet Singh Duggal appearing for the revenue, though, agreed that the issue is covered by the decision of the Tribunal; however, he relied upon the observations of the assessing officer. 6. We have considered rival submissions and perused materials on record. As could be seen from the materials placed before us, identical issue came up for consideration before the Tribunal in assessee’s own case for assessment year 2014-15. While dealing with the issue, the Tribunal in and others dated 25-06-2019, having found that in assessee’s own case for assessment year 2012-13, the Tribunal has deleted similar addition made by assessing officer, followed the same and upheld the decision of learned Commissioner of Income-tax (Appeals) in deleting the additional disallowance made by the assessing officer. Facts being identical, respectfully following the aforesaid decision of the Tribunal in assessee’s own case, we uphold the order of learned Commissioner of Income-tax (Appeals) on the issue. Ground raised