IND-AUST MARITIME P.LTD,NAVI MUMBAI vs. DCIT 10(3), MUMBAI

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ITA 7599/MUM/2013Status: DisposedITAT Mumbai03 February 2016AY 2010-113 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the CIT(A) had rejected documents on hyper-technical grounds and restored the issue to the AO for fresh adjudication after considering the evidence. The AO's appeal was dismissed as not maintainable.

What were the facts?

The assessee claimed commission payment of Rs. 82.62 lakhs, which was disallowed by the AO for lack of evidence. The CIT(A) upheld the disallowance. The assessee and AO filed cross-appeals.

What were the issues?

Whether the commission payment was allowable as an expenditure and whether the AO's appeal was maintainable due to low tax effect.

Which sections of the Income-tax Act were involved?

Section 37,Section 14A

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

ITA No.7599/Mum/2013
ITA No.7585/Mum/2013

Read from the judgment's own cause title. This page is filed under one of them.

अिधकरण, ‘एल’ खंडपीठ आयकर अपीलीय अपीलीय अिधकरण खंडपीठ मुंबई मुंबई आयकर आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण खंडपीठ खंडपीठ मुंबई मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI “L” BENCH सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"", लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं राम लाल नेगी एवं राम लाल नेगी राम लाल नेगी, , , , "याियक सद"य राम लाल नेगी "याियक सद"य "याियक सद"य "याियक सद"य Before S/Sh. Rajendra,Accountant Member & Ram Lal Negi,Judicial Member आयकर आयकर अपील अपील संसंसंसं/.ITA No.7599/Mum/2013,िनधा"रण िनधा"रण वष" वष"/Assessment Year-2010-11 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" M/s. Ind-Aust Maritime Private Dy. CIT -10(3) Limited,715, J.K. Chambers, Sector- Aayakar Bhavan 17,Vashi, Navi Mumbai-400 073. Vs. Mumbai-400 020. PAN:AAACI 7515 H (अपीलाथ" /Appellant) (""यथ" / Respondent) आयकर आयकर अपील अपील संसंसंसं/.ITA No.7585/Mum/2013,िनधा"रण िनधा"रण वष" वष"/Assessment Year-2010-11 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" Dy. CIT -10(3) Vs. M/s. Ind-Aust Maritime Private Aayakar Bhavan,Mumbai-400 020. Limited. (अपीलाथ" /Appellant) (""यथ" / Respondent) िनधा"रती िनधा"रती ओर ओर सेसेसेसे/Assessee by : None िनधा"रती िनधा"रती ओर ओर राज"व क" ओर से/ Revenue by : Shri Pankaj Kumar-DR सुनवाई सुनवाई क" क" तारीख तारीख / Date of Hearing : 27.01.2016 सुनवाई सुनवाई क" क" तारीख तारीख घोषणा क" तारीख / Date of Pronouncement : 03.02.2016 आयकर आयकर अिधिनयम अिधिनयम,1961 1961 क" क" धारा धारा 254 254(1)केकेकेके अ"तग"त अ"तग"त आदेश देश 1961 1961 254 254 आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त देश देश Order u/s.254(1)of the Income-tax Act,1961(Act) अनुसार PER RAJENDRA, AM- लेखा सद"य सद"य राजे"" राजे"" केकेकेके अनुसार लेखा लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging the order dtd.04.10.2013 of the CIT(A)-22,Mumbai the assessee and the Assessing Officer(AO)have filed cross appeals for the year under appeal.Assessee-company,engaged in the business of ship management and providing technical and allied services etc.filed its return of income on 01/10/2010,declaring total income at Rs.5.37 Crores.The AO completed the assessment u/s. 143(3) of the Act on 30.01.2013 determining the income of the assessee at Rs.

6.

39 Crores. 7599/Mum/2013: 2.Effective ground of appeal filed by the assessee is about disallowance of Rs.82.62 lakhs under the head commission payment.During the assessment proceedings,the AO found that the assessee had claimed expenditure of Rs.82,62,000/- as commission charges paid to Greatship Global offshore Services Pte.Ltd.(GGOSPL).He directed the assessee to file details with regard to the said expenses.As per the AO the assessee had filed details about payment and had claimed that same was allowable as per the provisions of Section 37 of the Act.After considering the same,he held that the assessee had made payment on the basis of the invoice dtd.08.03.2010,that details of services rendered were not filed,that it did not furnish MOU to justify payment of commission,that form 15CB was not produced,that TDS was not deducted by it,that it had failed to establish benefit derived out of the payment made to GGOSPL.Finally,he disallowed the commission payment,amounting to Rs.82.62 lakhs,claimed by the assessee. 3.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority (FAA).Before him it was contended that it had produced all the documents with regard to the commission payment,that copy of invoice,Form 15CB and the MOU entered in to between

ITA/7599 & 7585/M/13,AY.10-11-Ind.Aust Maritime

it and the foreign company were submitted vide letter dated 18.01.2013.Before him the assessee produced a confirmation letter of GGOSPL dated 13.09.2010 that gave details about the payment of commission.In the letter the foreign company stated that it had rendered technical and professional services to the assessee.The FAA mentioned that the confirmation letter and the MOU were not filed before the AO,that the assessee had not made any application under Rule 46A of the Income tax Rules,1962(Rules)for admission of additional evidences.Referring to sub rule 4 of the Rule 46 and many a cases,he did not consider both the documents while deciding the appeal. He also held that there was no evidence of rendering of services by GGSOPL. Finally,he rejected the appeal filed by the assessee. 4.During the course of hearing none appeared before us,as stated earlier.Departmental Representative (DR)relied upon the order of the AO and the FAA. 5.We have heard the DR perused the material before us. We find that the AO had mentioned in his order that the assessee had produced certain documents,that he had not mentioned as to which documents were furnished,that the assessee had filed the MOU and the confirmation letter of GGSOPL before the FAA,that he did not consider the same and rejected them under rule 46A of the Rules,that payment made by the assessee to the supplier of services was routed through banking channels.Considering the peculiar facts and circumstances of the case,we are of the opinion that the matter needs further verification and investigation,that the FAA should not have decided the appeal on a hyper technical ground.Therefore,in the interest of justice,we are restoring back the issue to the file of the AO,who will decide the matter after affording a reasonable opportunity of hearing to the assessee and after considering the documents filed before the FAA.The appellant-company is directed to extend full cooperation to the AO in submitting all the necessary documents.Effective ground is decided in favour of the assessee,in part. ITA No.7585/Mum/2013: 6.Solitary ground raised by the AO deals with addition made by him and reduced by the FAA u/s. 14A of the Act.On a query by the Bench,the DR fairly conceded that the tax involved in the appeal filed by the AO was below monetary tax limit prescribed by the CBDT vide Circular No.21/2015 dated 10. 12.2015.Therefore,we are dismissing the appeal filed by the AO as not maintainable. As a result,appeal filed by the assessee stands partly allowed and appeal of the AO is dismissed. फलतः िनधा"रती "ारा दािखल क" गई अपील अंशतः मंजूर क" जाती है और फलतः िनधा"रती अिधकारी "ारा दािखल क" गई अपील नामंजूर क" जाती है. Order pronounced in the open court on 3rd February, 2016. आदेश क" घोषणा खुले "यायालय म" "दनांक 3 फरवरी, 2016 को क" गई । (राम लाल नेगी /Ram Lal Negi) (राजे"" / RAJENDRA) "याियक सद"य / JUDICIAL MEMBER लेखा लेखा सद"य सद"य / ACCOUNTANT MEMBER लेखा लेखा सद"य सद"य मुंबई/Mumbai,"दनांक/Date: 03.02. 2016 व.िन.स.Jv.Sr.PS. 2

ITA/7599 & 7585/M/13,AY.10-11-Ind.Aust Maritime

आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत 1.Appellant /अपीलाथ"

2.

Respondent /""यथ" 3.The concerned CIT(A)/संब" अपीलीय आयकर आयु , 4.The concerned CIT /संब" आयकर आयु 5.DR A Bench, ITAT, Mumbai /िवभागीय "ितिनिध, ए खंडपीठ,आ.अ."याया.मुंबई 6.Guard File/गाड" फाईल स"यािपत "ित //// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst.

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