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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
This appeal by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-2, Thane [in short CIT(A)], in appeal No. CIT(A)-2/IT-286/2014-15 dated 20.07.2016. The Assessment was framed by the DCIT, Circle-1(2)(2), Mumbai (in short ‘DCIT’) for the A.Y. 2012-13 vide order dated 31.01.2015 under section 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The Revenue has raised three issues i.e. (i) deleting of addition by CIT(A) of legal and professional fee of ₹ 25.11 lakhs, (ii) deleting the addition of selling and distribution expenses of ₹ 24.61 lakhs and (iii) deletion of addition of conversion expenses of ₹ 1,05,95,000/-. For this Revenue has raised the following four grounds: -
"i. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in deleting the addition of Legal & Professional Fee Rs.25, 11,000/-, without appreciating that assessee has failed to establish -the identity of the said parties, that services were rendered by the Tax Advisor & Professionals and that the same were incurred wholly & exclusively for the business of assessee? ii. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in deleting the addition of Rs. 24,61,000/ on selling & Distribution Expenses -, without 'appreciating that assessee has failed to furnish names addresses, confirmations, evidence of services rendered by these parties, during assessment and appellate proceedings, as well? iii. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in deleting the addition of Conversion expenses Rs. 1,05,95,000/- ignoring that the assessee has not given details of such expenses and also date on which books of account were furnished before the AO in the details filed before him, and hence such claim of assessee of having furnished books of accounts and relevant details, on which additions were made by AO should not have been accepted? iv. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in allowing the appeal of the assessee and deleting the additions made by the AO without calling for a remand report and hence rendering the order to be bad in law as made without following the procedure and liable to be quashed? "
At the outset, the learned Sr. Departmental Representative, first of all, took us through the assessment order and each of the three additions and stated that the assessee has not provided the basic details before the AO i.e. failed to provide commercial expediency for payment of legal and professional fee expenses, failed to furnish the basic information regarding nature of services rendered by the dealers for which expenses relating to selling and distribution of expenses were incurred and failed to produce any evidences regarding conversion and processing expenses. Accordingly, he argued that the CIT(A) also deleted the addition and decide the issues of legal and professional fee, selling and distribution of expenses and conversion and processing charges in a summary manner. On this the learned Counsel for the assessee try to explain the nature of evidences produced before CIT(A) and explanation given to CIT(A). But when it was pointed out to the learned Counsel for the assessee that nothing is coming out of the order of the CIT(A) as to how he has deleted these three additions and what is the basis for the order passed. Even the fact recorded by the AO that the assessee could not produce anything before him, is clearly coming out of the order of the Assessing Officer.
After hearing both the sides and going through the facts of the case, we are of the view that the CIT(A)’s order lacks adjudication by a speaking order on each of the additions under dispute before us. Accordingly, the order of CIT(A) is set aside and the appeal of Revenue is allowed for statistical purposes. The matter is remanded back to the file of the CIT(A).
In the result, the appeal Revenue is allowed for statistical purposes.
Order pronounced in the open court on 31-05-2018. AadoSa kI GaaoYaNaa Kulao mao idnaMk 31.05.2018 kao kI ga[- .