Income Tax Appellate Tribunal - Bangalore
Deputy Commissioner Of Income Tax, ... vs M/S Samson'S Distilleries P. Ltd.,, ... on 6 March, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
"A" BENCH : BANGALORE
BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND
SHRI LALIT KUMAR, JUDICIAL MEMBER
M.P. No. 303/Bang/2017
(in ITA No.552/Bang/2013)
Assessment Year :2007-08
M/s. Samsons Distilleries
Pvt. Ltd.,
The Deputy Commissioner of
No. 627, Anekonda,
Income Tax, Vs.
Davangere.
Central Circle - 1 (3),
Bangalore.
PAN; AACCS7708L
APPELLANT RESPONDENT
Appellant by : Shri B.R. Ramesh, JCIT (DR)
Respondent by : Smt. Sheethal Borkar, Advocate
Date of hearing : 23.02.2018
Date of Pronouncement : 06.03.2018
ORDER
Per Shri A.K. Garodia, Accountant Member
This M.P. is filed by the revenue stating that there are certain apparent mistakes in the impugned Tribunal order dated 31.05.2017.
2. The contentions raised by the revenue in the M.P. are as per para no. 2 of the M.P. which is reproduced hereinbelow.
"2. Kind attention is drawn to the factthat the Hon'ble ITAT hasstated that the assessee company could have at least produced the decision taken by the Board of Directors, regarding the technical consultancy services rendered by Sri S.S. Mallikarjun to the assessee company. Further Hon'ble ITAT has opined that mere competence or qualification cannot be a criteria for allowing the payment made by the assessee on account of technical consultancy fee. While the Hon'ble ITAT has recorded a finding that mere competence or qualification is not the criteria for allowing Technical Consultancy fee as deduction, it has however upheld the decision of the CIT(A) in restricting the disallowance to 25% (Rs.10,50,000/-) on the technical consultancy fees of Rs.42,00,000/-."M.P. No. 303/Bang/2017
(in ITA No.552/Bang/2013) Page 2 of 3
3. In the course of hearing of the M.P., it was submitted by the ld. DR of revenue that in para 6 of the Tribunal order, it is noted by the Tribunal that in the absence of any material evidence regarding the service actually rendered by Shri S.S. Mallikarjun, the mere competence or qualification cannot be a criteria for allowing the payment made by the assessee on account of technical consultancy fee. He submitted that as per this finding of the Tribunal, the entire payment of technical consultancy fee should have been disallowed but CIT(A) had earlier restricted disallowance to 25% of the total payment amounting to Rs. 10.50 Lakhs and the Tribunal has confirmed the order of CIT(A) but in view of this finding of the Tribunal that in the absence of any material evidence regarding the service actually rendered by Shri S.S. Mallikarjun, the mere competence or qualification cannot be a criteria for allowing the payment made by the assessee on account of technical consultancy fee, the Tribunal should have confirmed the entire disallowance and not only 25% disallowance of total fees. He submitted that this is an apparent mistake in the Tribunal order which should be rectified. At this juncture, a query was raised by the bench as to whether any ground was raised by the revenue in its appeal in respect of restricting the disallowance to 25% only by CIT (A). In reply, the ld. DR of revenue fairly conceded that there is no ground raised by the revenue in its appeal on this issue. The ld. AR of assessee submitted that there is no mistake in the Tribunal order.
4. We have considered the rival submissions. We find that para no. 6 of the Tribunal order is in respect of deciding ground no. 1 in assessee's appeal as per which the assessee is contesting the confirming of disallowance by CIT(A) of Rs. 10.50 Lakhs to the extent of 25% of the total payments made of Rs. 42 Lakhs on account of technical consultancy fees. As per the combined Tribunal order, the revenue's appeal was also there for the same assessment year against the same order of CIT (A) but there is no ground raised by the revenue in its appeal in respect of restricting the disallowance by CIT (A) to 25%. This is settled position of law that by filing the appeal before the Tribunal, the assessee cannot be worse of and since no ground is raised by the revenue in M.P. No. 303/Bang/2017 (in ITA No.552/Bang/2013) Page 3 of 3 its appeal in respect of relief allowed by CIT (A) on this account by restricting the disallowance to 25%, Tribunal could not have confirmed the disallowance in excess of disallowance confirmed by CIT (A) i.e. 25% of total amount paid by the assessee of Rs. 42 Lakhs on account of technical consultancy fees. In this view of the matter, we find that there is no apparent mistake in the impugned Tribunal order.
5. In the result, the M.P. filed by the revenue is dismissed. Order pronounced in the open court on the date mentioned on the caption page.
Sd/- Sd/-
(LALIT KUMAR) (ARUN KUMAR GARODIA)
Judicial Member Accountant Member
Bangalore,
Dated, the 06th March, 2018.
/MS/
Copy to:
1. Appellant 4. CIT(A)
2. Respondent 5. DR, ITAT, Bangalore
3. CIT 6. Guard file
By order
Senior Private Secretary,
Income Tax Appellate Tribunal,
Bangalore.