ITO 1(2)(1), MUMBAI vs. ITL TOURS & TRAVELS P.LTD, MUMBAI

The present Appeal has been filed by the revenue against the order of Ld. Commissioner of Income Tax (Appeals) -2 in short referred as ‘Ld. CIT(A)’, Mumbai, dated 04/07/2018 for Assessment Year (in short AY) 2014-15 on the following grounds of appeal:-

Brief facts of the case are that that assesse company is engaged in operation of foreign tours and sold foreign currency notes/cheques to the foreign travelers. However, the assessee company filed its e-return of income on 24-11- 2014 for the A.Y 2014-15, declaring total income of Rs. 21,02,670/- and claimed a refund of Rs. 19,10,280/-. The case of the assessee was selected under CASS. During the scrutiny the AO issued notice u/s. 143(2) of the Income-tax Act, 1961 ( in short, the ‘Act’). The AO also issued notice u/s. 142(1) of the Act. Both the said notices were duly served upon the assessee. In response to said notices issued by the AO, M/s. ITL Tours & Travels P.Ltd. - 3 - the A/R of the assessee appeared before the AO and filed the copies of ROI, Balance sheet, P & L, computation and also the details in response to notice issued u/s. 142(1) of the Act. On perusal of the details with Audited profit & loss account, the AO observed that the assessee has claimed the expenses towards Discount (Domestic of Rs.11,94,328/-) and Discount (International of Rs. 2,00,61,582/-). Details/ break up of such expenditure of Rs. 2,12,55,910/- are given in para 7.2, at page-3 of the assessment order 2,12,55,910/- by the AO. On examination of said details of expenditure of Rs. 2,12,55,910/- the AO asked the assessee to provide details of TDS deduction on such payment/expenditure of Rs.2,12,55,910/-. In response, the assessee vide its submission dt. 19-08-2016 has explained the same in detail along with an earlier order of ITAT, ‘I ‘Bench, Mumbai, in assessee’s own case, wherein it was held that no TDS is required to be deducted on handling charges/discount paid for the A.Ys 2006-07 to 2010-11 and the ld. CIT(A) has also held in favour of assessee for A.Ys 2010-11 to 2012-13. The details of assessee’s explanation has been reproduced by the AO in his order in para 7.1at pages 3-4 of the assessment order. The AO found that the assessee has deducted TDS of M/s. ITL Tours & Travels P.Ltd. - 4 - Rs. 127,675/- on expenses of Rs. 12,75,218/- and balance amount of Rs. 1,93,99,235/- as incurred on account of commission expenses, the TDS was not paid by the assessee and as such, he made a disallowance u/s. 40(a)(ia) of the Act of Rs. 1,49,47,949/- and added the same to the total income of the assessee

Aggrieved with the order of the A.O the assessee preferred an appeal before the CIT(A). The ld. CIT(A) by considering the earlier order of ITAT Mumbai Bench in assessee’s own case for the A.Ys 2006-07 to 2013-14 except AY 2007-08) directed the AO to delete the impugned addition by observing ”Therefore, fact being broadly the same, respectfully following binding judicial precedent, we confirm the stand of ld. CIT(A) and dismiss this ground of revenue’s appeal. “ 4. Aggrieved with the above order the revenue is in appeal before us and raised the aforementioned grounds of appeal