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Facts
The assessee's appeal is against the order confirming an addition of ₹.80,52,718/- on account of sales promotion expenditure due to lack of supporting documents. The assessee claimed that the authorities below disallowed the expenditure without considering documentary evidence, including additional evidence filed before the CIT(A) which was not admitted.
Held
The Tribunal noted that the Assessing Officer added the amount without supporting documents, and the CIT(A) confirmed it. The assessee argued that neither the Assessing Officer nor the CIT(A) provided an opportunity to substantiate the claim, despite online submissions. The Tribunal found that there was no opportunity for the assessee to present its case effectively.
Key Issues
Whether the disallowance of sales promotion expenditure made by the Assessing Officer and confirmed by the CIT(A) was justified without providing adequate opportunity to the assessee to substantiate its claim.
Sections Cited
IT Act
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Before: Shri S.S. Viswanethra Ravi&
Year: 2018-19 Zinnia Life Sciences Private Vs. The Deputy Commissioner of Limited, 239, Thiruvenkatasamy Road, Income Tax, Coimbatore 641 002, Tamil Nadu. Corporate Circle - 1, Coimbatore. [PAN: AAACZ7555L] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri H. Yeswanthkumar, Advocate ��थ� की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 12.11.2024 घोषणा की तारीख /Date of Pronouncement : 13.11.2024 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 30.05.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2018-19.
The assessee raised sole issue of challenging the action of the ld. CIT(A) in confirming the addition made on account of sales promotion expenditure in the facts and circumstances of the case.
We note that the Assessing Officer added an amount of ₹.80,52,718/- to the total income of the assessee on account of sales promotion expenditure in the absence of any supporting documents. The ld. CIT(A) confirmed the same by recording his reasons from para 7.2.1 to 8.1 of the impugned order. On perusal of both the orders at para 6 and 8.2 respectively, it is noted that both the authorities below made the disallowance in the absence of any documentary evidence in support of the claim of the assessee. We note that the assessee filed evidence by way of additional evidences before the ld. CIT(A), but, however, the said additional evidences were not admitted for the reason as it is reflecting in para 7.1.4 of the impugned order.
Before us, the ld. AR Shri H. Yeswanthkumar, Advocate filed paper book containing 406 pages. On perusal of the same, we note that the Assessing Officer issued show-cause notice on 23.02.2021 requesting the assessee to file reply on or before 02.03.2021. The assessee sought adjournment by letter dated 27.02.2021 upto 05.03.2021 for filing reply to the show-cause notice. The Assessing Officer, however, adjourned the matter till 08.03.2021 and it is noted that the assessee filed details on 03.03.2021, which is reflected from page 5 & 6 of the paper book. But, however, though the Assessing Officer passed the assessment order on 24.03.2021, but, not considered the details as submitted on 03.03.2021 by the assessee. As discussed above, the ld. CIT(A) did not entertain the additional evidences filed before the first appellate authority. The ld. AR pleaded for one more opportunity as the assessee is ready to prosecute its case by filing relevant evidences.
The ld. AR drew our attention to the paper book and submits that the evidences as reflecting from page 7 to 406 of the paper book are necessary for fair adjudication of the issue and requested to remand the matter to the file of the Assessing Officer.
The ld. DR Ms. R. Anita, Addl. CIT did not oppose the same.
Having heard both the parties and upon perusal of the assessment order and the impugned order, we note that there was no opportunity for the assessee to substantiate its case before the Assessing Officer as well as ld. CIT(A) despite uploading the details through online. Therefore, taking into consideration the material evidence as furnished in the form of paper book as well as in the interest of natural justice, we deem it proper to remand the matter to the file of the Assessing officer for fresh consideration. The assessee shall furnish complete details to substantiate its case before the Assessing Officer. Thus, the ground raised by the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 13th November, 2024 at Chennai.