M/S LLYODA OFFSHORE GLOBAL SERVICES PRIVATE LIMITED,BANGALORE vs. DCIT, BANGALORE

In reply to the above remand report, assessee stated that it was not given sufficient opportunity and ad hoc disallowance made disregarding the documents submitted was unjustified. DRP after considering the submissions and remand report of the AO was of the opinion that assessee had chosen to file part details and documents and they were not willing to file the details called for by the AO. As per the DRP, it was the onus of the assessee to justify the claim of expenditure by submitting the evidence required. Taking this view of the matter, DRP confirmed the ad hoc disallowance.

Now before us, Ld. AR submitted that assessee had given detailed documents on 03.04.2012 before the AO during the course of assessment proceedings, placed at paper book page 626 to 671. As per the Ld. AR, notice dt 13.11.2013 (PB page 623 to 625) issued by the AO was received by the assessee on 06.12.2013 and as per this notice the details were to be furnished on or before 10.12.2013. Details which the AO had sought, which is alleged to not have been given by the assessee are in a notice dt 29.01.2014, which was served on the assessee only on 03.02.2014 (PB page 556 & 557). Assessee had on 14.02.2014 furnished all details that were called for, but regretfully the IT(TP)A.245/Bang/2015 Page - 5 assessment order was passed on 14.02.2014 giving no opportunity to the assessee. Ld. AR submitted that even during the DRP proceedings, though the matter was remanded to the AO, he refused to consider the details and submissions including the invoices supporting the expenditure claimed. Thus according to him, there was gross injustice, by denying a reasonable opportunity to the assessee for proving its claim of expenditure.

Per contra Ld. DR supported the orders of the lower authorities.

We have perused the orders and heard the rival contentions. We find from the chronology of events leading to the assessment order, that on the notice dt 29.01.2014 issued by the AO, assessee had made detailed submissions on 14.02.2014. No doubt in the notice of the AO time granted to the assessee was only up to 10.02.2014. However, the information called for in the said notice was, according to the assessee, voluminous and required time for compilation. Assessee’s submissions filed on 14.02.2014 was never considered by the AO or the DRP citing a reason that assessee had not filed it within the time period allowed to it. We are constrained to agree with the argument of the Ld. AR that sufficient opportunity was not granted to the assessee, since the assessment order was passed on the same day on which the assessee had filed the submissions. In the proceedings before the DRP, though there was a remand by the DRP, AO instead of verifying the evidence took a technical view that assessee had not availed the opportunities granted to it for filing the details and evidence before him during the course of assessment proceedings. In the IT(TP)A.245/Bang/2015 Page - 6 circumstances, we are of the opinion that the matter requires a fresh look by the AO. We, therefore, set aside the orders of authorities below and remit the issue regarding ad hoc disallowance of various expenditure back to the file of AO for consideration afresh after giving adequate opportunity to the assessee for substantiating its claim.

In the result, appeal of the assessee is treated as allowed for statistical purposes.