Leading Brands Of The World P.Ltd, ... vs Department Of Income Tax

The Income Tax Officer M/s.Leading Brands of the World Ward 5(2)(3) बना म/ Private Limited Mumbai. Vs. C/o.Anil A.Masand & Co., CAs 3, Shewa Apartment, 33-B, 3rd Floor Khar, Mumbai -400 052. PAN : AABCL1832F. (अपी लाथ /Appellant) ( यथ/Respondent)

अपी लाथ क ओरसे /Appellant by : Shri Asghar Zain यथ क ओरसे /Respondent by : Shri Nishant Ruparel

सन ुवा ई क ता रख / घोषणाक ता रख/ Date of Hearing : 26.02.2015 Date of Pronouncement : 13.03.2015.

आदे श/ ORDER

Per Amit Shukla (JM) :

This appeal has been preferred by the department against the order dated 21.09.2012, passed by the Commissioner of Income-tax (Appeals) - 9, Mumbai, [`CIT(A)' for short] for the quantum of assessment passed u/s 144, for the assessment year 2008-2009, on the following ground of appeal:-

"1. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in granting relief of Rs.82,43,737/- out of Rs.86,93,177/- added by the Assessing Officer without remanding back the issue to the Assessing Officer?"

2 ITA No.7081/Mum/2012 M/s.Leading Brands of the World Pvt.Ltd.

2. Brief facts of the case are that, the assessee-company is engaged in the business of brand development. Various notices were sent to the assessee on the address mentioned in the return of income, however, all the notices were returned back unserved. Finally, the Assessing Officer (AO) completed the assessment u/s 144. From the AIR information, the AO gathered the address of the assessee' s clients, to whom assessee had rendered its services. Notices u/s 133(6) were sent to these parties and information was sought for the transaction details. After receiving the information, the AO observed that the assessee had shown receipts from its business at Rs.76,20,408 and other income of Rs.23,23,889. Against this income, the assessee had claimed various expenses and declared income of Rs.3,87,925. He further observed that out of various notices sent to the parties, most of them have confirmed their transaction with the assessee, except for M/s.Vox Public Relations Private Limited (`Vox'for short), in whose case the notice returned back as unserved. Since it was not ascertainable whether this income was included in the assessee' s gross receipt or not, the receipt shown from this party aggregating to Rs.86,93,177 was added to the total income of the assessee.

3. Before the learned CIT(A), the assessee submitted that, only an amount of Rs.2,24,720 was received from Vox, which was on account of promotion of brand event for BMW. Vox had paid Rs.2,24,720 and has deducted tax to the extent of Rs.25,461. This is fully corroborated from the report in Form 26AS. Had there been a transaction of Rs.86,93,177, then the same would have been duly reflected. The learned CIT(A) noted down the relevant report in Form 26AS, which was as under:-

3 ITA No.7081/Mum/2012 M/s.Leading Brands of the World Pvt.Ltd.

Sr. Name of TAN of the Section Date of Amount Tax TDS Status Date of No the Deductor under paymen paid / deducted deposite of bookin . Deductor which t / credit credite (TDS + d Bookin g deductio d Surcharg g n made e + (P/F/U) Education @ Cess) 1 VOX DELVO7013 194J 30.08. 224720 23146 23146 F 19-10- Public G 2007 2007 Relation s India Pvt Ltd. 2 VOX DELVO7013 194J 13.09. 224720 2315 2315 F 01-11- Public G 2007 2007 Relation s India Pvt Ltd.

Based on this information, he reduced the said addition to Rs.4,49,540 after observing and holding as under:-

"5.4.2. Under the circumstances, the maximum disallowance that could have been made by the LAO amount to Rs.4,49,540/-. Secondly, the gross receipts as per the AIR figure is recorded at Rs.86,93,177/- and the gross receipts as per Form No.26AS has been recorded at Rs.90,30,257/-. On the other hand the appellant has disclosed gross receipts of Rs.76,20,408/- under the head business income and other income of RS.23,23,889/-. The LAO is directed to verify the exact amount of receipts received from M/s.VOX Public Relations India Pvt. Ltd. and restrict the addition to that extent only because the LAO has himself stated that all parties have confirmed the transactions with the appellant except M/s.VOX Public Relations India Pvt. Ltd. In view of the above, the addition of Rs.86,93,177/- is reduced to Rs.4,49,540/-."

4. After hearing both the parties, it is noticed that the AO has taken the gross receipt from Vox at Rs.86,93,177, without pointing out any material as to how such a receipt has been earned by the assessee from M/s.Vox. The CIT(A) has examined the Form 26AS, wherein it has been clearly mentioned that only two payments were received and TDS was deducted on such 4 ITA No.7081/Mum/2012 M/s.Leading Brands of the World Pvt.Ltd.

payments. Thus, there is no basis for the AO for estimating such a huge income. The learned CIT(A) has already noted the figure of gross receipt mentioned in the AIR and as recorded in Form No.26AS and has already added the difference to the income of the assessee. Thus, over and above such an addition, there is no material for making further addition. Accordingly, the finding of the CIT(A) is affirmed and the ground raised by the Revenue is dismissed.

5. पर णामतः र ाज व क अपी ल खार ज क जा ती ह ै। In the result, the Revenue' s appeal is dismissed.

Order pronounced on this 13th day of March, 2015.

आदे श क घो षणा दना क ंः कोक गई ।

Sd/- Sd/- (Sanjay Arora) (Amit Shukla) ले खासद य/ ACCOUNTANT MEMBER या ियक सद य/ JUDICIAL MEMBER

मं ब ुईMumbai; दना क ं Dated : 13th March, 2015. Devdas*

आदेशक ितिलप अ े षत/Copy of the Order forwarded to : 1. अपी लाथ / The Appellant 2. यथ / The Respondent. 3. आयकरआयु(अपी ल) / The CIT, Mumbai.

4. आयकरआयु / CIT(A) - 9, Mumbai

5. वभागी य ि तिनि ध, आयकरअपीली य अि धकर ण, मु बई / DR, ं ITAT, Mumbai

6. गाड फा ईल / Guard file.

आदे शानु सार / BY ORDER, स यापत ि त//True Copy//

उप/सहा यक पं जीका र(Dy./Asstt. Registrar) आयकरअपी लीय अि धकर ण, मु बई/ ITAT, Mumbai ं