M/S. TITEC FINANCE LIMITED,KOLKATA vs. ITO, WARD - 7(2), KOLKATA, KOLKATA

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ITA 917/KOL/2018Status: DisposedITAT Kolkata05 October 2018AY 2011-122 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed the appeal partly, deleting the disallowance of commission expenses as the assessee had provided documentary evidence and paid similar commissions in other years. The disallowance of preliminary expenses was also deleted as they represented amortization under Section 35D.

What were the facts?

The assessee challenged disallowances made by the lower authorities for rental expenses, commission expenses, and preliminary expenses. The assessee did not press the ground related to rental expenses.

What were the issues?

Whether commission expenses paid to parties are allowable when documentary evidence and TDS are provided, and whether preliminary expenses are capital in nature or amortizable.

Which sections of the Income-tax Act were involved?

Section 35D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA

Before: Shri S.S, Godara

This assessee’s appeal for assessment year 2011-12, arises against the Commissioner of Income-tax (Appeals)-3, Kolkata’s order dated 22.04.2014 passed in case No.1843/CIT(A)-3/Cir.7(2)/Kol/14-15 involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

2.

Learned counsel does not press for assessee’s rental expenses disallowance of ₹1,35,00/- This substantive ground is dismissed as not pressed.

3.

The assessee’s next substantive ground challenges the correctness of both the lower authorities action disallowance commission expenses of ₹5,24,958/- paid to different parties. There is no dispute that the assessee has furnished all documentary evidence of TDS deduction, banking channel details etc. during the course of lower proceedings. The Assessing Officer invoked the impugned disallowance mainly for ITA No.917/Kol/2018 A.Y. 2011-12 M/s Titec Finance Ltd vs. ITO Wd-7(2) Kol. Page 2 the reason that same could not be verified by obtaining payees’s statement. I find no reason to agree with the impugned disallowance as it has come on record that assessee has paid similar commission as an NBFC in preceding and succeeding assessment years stated to have been accepted. Learned Departmental Representative fails to rebut this crucial fact during the course of hearing. I accept the assessee’s instant substantive ground accordingly.

4.

Next comes both the lower authorities action disallowing assessee’s preliminary expenses of ₹44,284/- by holding the same to be capital in nature. I find that impugned disallowance is also not sustainable since it represents amortization of the preliminary expenses u/s 35D of the Act. The impugned disallowance is deleted accordingly.

5.

This assessee’s appeal is partly allowed. Order pronounced in open court on 05/10/2018 (S.S. Godara) Judicial Member Kolkata, *Dkp/Sr.PS "दनांकः- 05/10/2018 कोलकाता आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-M/s Titec Finacne Ltd. 604, Block “O” 1st Floor, 12, Krishna Chandra Dey Sarani, New Alipore, Kolkata-53

2.

""यथ"/Respondent-Income Tax Officer, Ward-7(2) Kolkata 3. संबं"धत आयकर आयु%त / Concerned CIT 4. आयकर आयु%त- अपील / CIT (A) 5. &वभागीय ")त)न"ध, आयकर अपील"य अ"धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड+ फाइल / Guard file. By order/आदेश से, // Sr. Private Secretary, Head of Office/DDO आयकर अपील"य अ"धकरण, कोलकाता ।

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