What did the Tribunal hold?

The Tribunal, considering the principles of natural justice and the filing of additional evidence, decided to remand the matter back to the Assessing Officer for examination. The Assessing Officer is directed to examine the genuineness of the claim and decide accordingly.

What were the issues?

The primary issue was the genuineness of the business development expenditure claimed by the assessee. The Tribunal also considered the admissibility of additional evidence filed at the appellate stage.

Control & Applications Automation… vs ITO | ITAT Mumbai 2016

Q: What were the facts?

The assessee claimed business development expenditure of Rs. 12,06,679/-. The Assessing Officer doubted the genuineness of this expenditure. The assessee filed additional evidence before the Tribunal.

Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI

Before: Shri Joginder Singh, & Shri Ashwani Taneja

For Appellant: Shri Milin Dattani

For Respondent: Smt. N.V. Nadkarni-DR

Hearing: 14/06/2016

आदेश / O R D E R

Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 30/11/2015 of the Ld. First Appellate Authority, Mumbai, on the ground of confirming disallowance of business development expenditure of Rs.12,06,679/-.

During hearing, the ld. counsel for the assessee, Shri Milin Dattani, filed paper book containing additional evidence, which could not be filed before the ld. Assessing Officer/Ld. Commissioner of Income Tax (Appeal). It was explained that the additional evidence, filed by the assessee goes to the root of the matter and thus the disallowance made by the Assessing Officer may be deleted.

2.1. On the other hand, the ld. DR, Smt. N.V. Nadkarni, though defended the addition but contended that the additional evidence, filed by the assessee, before this Tribunal, requires examination by the Assessing Officer so that the interest of Revenue can be safeguarded.

2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee was providing R & D Support Services to its parent company for which the assessee charged 15% markup on the cost incurred for such services. The assessee has also claimed to have incurred cost for achieving solution business in India by appointing a dedicated Business

M/s Control & Applications Automation India Pvt. Ltd.

Development Manager in India, for which cost is charged as business development cost in India being an expenditure of Indian Company. The assessee claimed to have incurred Rs.12,06,679/- towards administrative expenses and business related activities incurred to secured business in India. The Ld. Assessing Officer doubted the genuineness of the expenditure. Keeping in view, the principle of natural justice and without going into merits of the claim, since the assessee has filed additional evidence for its claim, therefore, to examine the genuineness of such claim, we remand this file to the file of the Assessing Officer. The assessee is directed to furnish the additional evidence before the Assessing Officer, who will examine the claim of the assessee and its genuineness and then shall decide in accordance with law. The assessee be given opportunity. Thus, the appeal of the assessee is allowed for statistical purposes only.

Finally, the appeal of the assessee is allowed for statistical purposes only.

This order was pronounced in the open court in the presence of Ld. representatives from both sides at the conclusion of the hearing on 14/06/2016.

CONTROL & APPLICATIONS AUTOMATION INDIA P.LTD,MUMBAI vs. ITO 8(3)(4), MUMBAI

What did the Tribunal hold?

What were the facts?

What were the issues?

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