NIDUS ADVERTISING AND MARKETING PVT LTD,CHENNAI vs. ITO, CORPORATE WARD -4(2), CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -8, Chennai, dated 10.11.2017 and pertains to assessment year 2013-14.

Sh. T. Banusekar, the Ld. representative for the assessee, submitted that the assessee is engaged in the business of advertising. According to the Ld. representative, there was a difference between accounts of the assessee and in the Times of India. As per the accounts of the assessee, the outstanding amount was ₹47,69,430/-. Whereas, as per the books of account of Times of India, the amount was ₹91,08,024/-. Therefore, according to the Ld. representative, there was a difference of ₹43,38,594/-. The assessee explained before the Assessing Officer that there was a mistake in the financial year 2010-11. The discount received from the Times of India was, in fact, paid to the sundry debtor. According to the Ld. representative, this was not taken into account while preparing financials, therefore, there was a difference. According to the Ld. representative, the Assessing Officer disallowed the claim of the assessee on the ground that the claim of deduction was not made in the return of income. Therefore, applying the judgment of Apex Court in Goetze (India) Ltd. v. CIT (2006) 284 ITR 323, he rejected the claim made by the assessee. The CIT(Appeals) also confirmed the disallowance. According to the Ld. representative, the assessee can reconcile the difference before the Assessing Officer, therefore, the matter may be remitted back to the file of the Assessing Officer.

I heard Shri AR.V. Sreenivasan, the Ld. Departmental Representative also. According to the Ld. D.R., admittedly there was a difference of ₹43,38,594/-. The assessee claims that the mistake occurred during the financial year 2010-11. Therefore, if at all there was any mistake, according to the Ld. D.R., it has to be claimed only in the financial year in which the mistake occurred and not during the year under consideration. In respect of the discount received from Times of India, according to the Ld. D.R., the assessee claimed before the Assessing Officer that the discount has to be passed on to its client, therefore, the CIT(Appeals) has rightly confirmed the disallowance.

Having heard the Ld. representative for the assessee and the Ld. D.R., this Tribunal finds that the Assessing Officer admitted that there was a mistake in the financial year 2010-11 relevant to the assessment year 2011-12. In respect of the discount received from Time of India and the discount paid to the sundry debtor, the Assessing Officer, placing his reliance on the judgment of Apex Court in Goetze (India) Ltd. (supra), found that unless the claim is made in the return of income, the assessee cannot make any additional claim. The judgment of Apex Court very clearly says that it may not impugn the power of appellate authorities in entertaining the additional claim. Therefore, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer on the basis of reconciliation that may be filed by the assessee. Accordingly, orders of both the authorities below are set aside and the entire disallowance is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter on the basis of material and reconciliation, if any, filed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

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