Income Tax Appellate Tribunal - Mumbai
Welset Plast Extrucions P. Ltd, Mumbai vs Department Of Income Tax on 23 December, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "G", MUMBAI
Before Shri R.S.Syal, AM and Shri D.K.Agarwal, JM
ITA No.3138/Mum/2010 : Asst. Year 2006-2007
The Asstt.Commissioner of Income-tax M/s.Welset Plast Extrusions Pvt.Ltd.
(OSD) 8(3) 8 Metalage Indl. Complex
Mumbai. Subhash Road, Off Caves Road
Vs.
Jogeshwari (E), Mumbai - 400 059.
PAN :AAACW0614K.
(Appellant) (Respondent)
Appellant by : Shri V.V.Shastri
Respondent by : Shri K.Shivaram
Date of Hearing : 20.12.2011 Date of Pronouncement :23.12.2011
ORDER
Per R.S.Syal, AM :
This appeal by the Revenue arises out of the order passed by the Commissioner of Income-tax (Appeals) on 05.02.2010 in relation to the assessment year 2006-2007.
2. The only ground is against the deletion of disallowance of professional fees of `13,78,309. Briefly stated the facts of the case are that the Assessing Officer observed that the assessee had claimed deduction towards professional fees paid to (i) Ask Quality Consultancy Services Private Limited - `3,03,050,
(ii) Ajit Shah - `4,17,567, (iii) Jai Prakash Mehendale - `99,180 and (iv) B.B.D'Costa - `5,58,512. During the course of assessment proceedings, the assessee was called upon to provide the details and substantiate the expenditure with documentary evidences for receiving services provided by the above four parties. The assessee furnished copies of invoices raised by these parties. The Assessing Officer opined that "there is a suspicion that whether the assessee had received any services from these parties or not". He, therefore, disallowed the entire professional fees of `13,78,309. The learned CIT(A) got convinced with the assessee's submission and ordered for the deletion of addition.
2 ITA No.3138/Mum/2010.M/s.Welset Plast Extrusions Private Limited.
3. After considering the rival submissions and perusing the relevant material on record it is observed from para 3.3 of the impugned order that the assessee furnished all the details called for by the A.O. during the assessment proceedings which were again provided to the learned first appellate authority. Complete details about the nature of services etc. have been set out in para 3.3 of the impugned order. The learned CIT(A) required the assessee to furnish the reasons for increase in the amount of professional fees in comparison with that paid in the preceding years. The assessee furnished such reasons which have been tabulated in para 3.5 of the impugned order. Apart from that, the assessee produced Confirmations from these four parties. The assessee made payments through banking channels and the tax was duly deducted at source from such payments, which was deposited with the exchequer. In our considered opinion there is no basis whatsoever on the part of the Assessing Officer to reject the entire claim for expenses in such an arbitrary manner. If he had any "suspicion" in his mind, he could have very well conducted further inquiry about the genuineness of the expenditure as copies of the relevant invoices were furnished before him. Having not done so, it is not open to disallow any expenditure without any reasonable basis. In our considered opinion the learned CIT(A) was justified in ordering for the deletion of addition. We uphold the same.
4. In the result, the appeal is dismissed.
Order pronounced on this 23rd day of December, 2011.
Sd/- Sd/-
(D.K.Agarwal) (R.S.Syal)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai : 23rd December, 2011.
Devdas* Sd/-
(R.K.Panda)
AM (Nominated)
3 ITA No.3138/Mum/2010.
M/s.Welset Plast Extrusions Private Limited.
Copy to :
1. The Appellant.
2. The Respondent.
3. The CIT concerned
4. The CIT(A)-XVIII, Mumbai.
5. The DR/ITAT, Mumbai.
6. Guard File.
TRUE COPY.
By Order Assistant Registrar, ITAT, Mumbai.