HEIDEBERG INDIA PRIVATE LIMITED,CHENNAI vs. DCIT CORPORATE CIRCLE 2(2), CHENNAI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 13, Chennai dated 05.01.2018 relevant to the assessment year 2004-05. In the grounds of appeal, the assessee has challenged the confirmation of disallowance of claim of deduction of forfeiture of advance rent.

Brief facts of the case are that the assessee filed its return of income for the assessment year 2004-05 on 28.10.2004 admitting Nil income. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 [“Act” in short]. Subsequently, the case was selected for scrutiny and the scrutiny assessment was completed under section 143(3) of the Act on 22.11.2006 with an assessed income of ₹.49,10,209/- under section 115IB of the Act. Aggrieved by the assessment order, the assessee filed an appeal before the ld. CIT(A), Mumbai, which was partly allowed. The assessee preferred second appeal before the ITAT and vide its order in dated 13.01.2012, the Tribunal remitted back the issue to the Assessing for adjudication afresh. Accordingly notice under section 143(2) r.w. section 254 of the Act was issued. The assessee was asked to submit the supporting documents for forfeiture of advance by M/s. Blue Chips Business Centre Private Limited. Since the assessee failed to submit any supporting documents before the undersigned, the claim of deduction of forfeiture of ₹.43,05,170/- was rejected and concluded the assessment. On appeal, the ld. CIT(A) confirmed the assessment order under section 143(3) r.w.s. 254 of the Act since the assessee could not produce concrete supporting evidence.

On being aggrieved, the assessee is in appeal before the Tribunal. By filing copy of certificate of full & final settlement from Blue Chip Business Centre Private Limited, confirmation sought by the Assessing Officer from Blue Chip Business Centre Private Limited, copy of cheque issued for final settlement, etc., the ld. Counsel for the assessee prayed for allowance of deduction claimed towards forfeiture of advance rent. On the other hand, the ld. DR strongly supported the orders of authorities below.

We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. In this case, the assessee has claimed deduction of forfeiture of advance rental deposit of ₹.43,05,170/- for which the Assessing Officer sought for supporting evidence. Since the supporting evidence was not available at the time of assessment proceedings, the Assessing Officer disallowed the claim of deduction of the assessee. During the course of appellate proceeding, the assessee has filed copy of certificate of full & final settlement from Blue Chip Business Centre Private Limited, confirmation sought by the Assessing Officer from Blue Chip Business Centre Private Limited, copy of cheque issued for final settlement, etc., being supporting evidences towards its claim of deduction of forfeiture of advance. Accordingly, the ld. CIT(A) called for remand report from the Assessing Officer. In his remand report, the Assessing Officer has stated that: From the records it is seen that the notice u/s 133(6) issued by the AO to M/s. Blue Chip Business Centre (P) Limited has returned unserved. The copy of the said response of M/s. Blue Chip Business Centre (P) Limited is not readily available on record. Further it is submitted that the additional evidence furnished by the assessee before the appellate authority does not change the facts of the case. The report is hereby submitted.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes.