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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI AMARJIT SINGH, JM
Assessee by: Shri D. V. Lakhani (AR) Department by: Shri Rajat Mittal (DR) सुनवाईकीतारीख / Date of Hearing: 06.02.2018 घोषणाकीतारीख /Date of Pronouncement:. 14.02.2018 आदेश / O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 18.04.2015 passed by the Commissioner of Income Tax (Appeals)- 17, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2008-09.
The assessee has raised the following grounds:- “
On the facts and circumstances of the case, the Ld. CIT(A) has erred in invoking the provisions of Section 40(a)(ia) in respect of the audit fees to the extent of Rs.5,00,000/- and has erred in A.Y. 2008-09 confirming disallowance of the claim of expenditure of audit fees of Rs.5,00,000/-.
2. On the facts and circumstances of the case the appellant pays that the recipient of the income Deloitte Haskins & Sells, a firm of Chartered Account a firm of Chartered Accountant shas paid the tax on the sum of Rs.5,00,000/- being the audit fees paid to them and in view of this the provisions of Section 40(a)(ia) are not applicable and the disallowance made by the Ld. Assessing Officer and confirmed by the Ld. CIT(A) is not justified.
3. On the facts & circumstances of the case the appellant prays that the disallowance of Rs.5,00,000/- is not justified and be deleted.”
3. The brief facts of the case are that the assessee filed its return of income on 29.09.2008 declaring total income to the tune of Rs.45,03,05,789/- for the A.Y. 2008-09. The return was processed u/s 143(1) of the Act. The case was selected for scrutiny and notice u/s 143(2) of the Act dated 04.08.2009 was issued and served upon the assessee. Thereafter, the Assessing Officer completed the assessment u/s 143(3) of the Act on 30.09.2010 determining total income of the assessee to the tune of Rs.45,03,65,790/-. Thereafter, the assessment was reopened u/s 147 of the Act. Notice u/s 148 of the Act dated 26.03.2013 was issued and served upon the assessee. In response to the notice u/s 148 of the Act, the assessee filed return of income on 24.04.2013 declaring total income to the tune of Rs.45,03,65,789/- which was the returned income. The assessment was reopened on following grounds: - “3.0The reasons for reopening of the assessment are as under: - "As per Annexure 6 to letter dated 17.08.2010. the assesses has given details of TDS certificates claimed. A perusal of the same ITA. No.4719/M/2016 A.Y. 2008-09 reveals that TDS of Rs.11,82,655/- is claimed u/s.194I for a tote/ receipt of Rs. 40,21,5Q8/~ from IL & FS Investment Commodities LW and B.N Oil Pvt. Ltd The assesses has not shown rent received of R$. 40,21,5Q8S-either in profit and loss account OF its computation of income This has resulted in underassessment of Rs 40.21.508/- In the computation of income, the assesses has claimed loan tease payment of Rs. 13,73,3Q2/-. This expense is not claimed its profit and loss account No details are on record to show what is the nature of expenses of loan lease payment and how it is claimed and allowed as n allowably expenditure. This has resulted in underassessment of Rs.13,13.302/-. A perusal of miscellaneous expenses reveal that data entry charges of Rs.53,79,439/- are claimed out of which provision of Rs 8,79000/- is mads Similarly, in the auditors remuneration of Rs.18.75,000/- is shown as per provision for F. Y. ended 31*' March. 2008. Since any provision made is no! an allowable expenditure, there is an underassessment of Rs 27.54,000/- Hence. I have reason to believe- that Rs.80,88.810/- of income chargeable to tan has escaped assessment for She A.Y 2003-09 within the meaning of sub-clause (iii) oi clause (c) of Explanation 2 of section 14? of the Income Tax Act, 1961 The income chargeable to tax has escaped assessment is more than Rs.1 lakh."
4. Thereafter, the Assessing Officer raised various addition. On verification, it was found that the assessee paid the fees to the tune of Rs.15,00,000/- for the audit of the financial statement of the company for the assessment year ended on 31.03.2008 to Deloitte Haskins & Sells against which the Assessee made the provision. The assessee deducted the TDS on the amount of 10,00,000/- but did not deduct the tax on the remaining amount 5,00,000/-. Therefore, the said amount was added to the income of the assessee. The total income of the assessee was assessed to the tune of Rs.45,18,50,270/-.Feeling aggrieved, the assessee filed an appeal before the CIT(A) who A.Y. 2008-09