2021 (6) TMI 394 - AT - Income Tax

Tribunal Upheld CIT(A)'s Findings Dismissing Revenue's Appeal for AY 2012-13

DCIT- 14 (2) (1), Mumbai Versus M/s Mahanagar Gas Ltd.

The Tribunal upheld the CIT(A)'s findings and dismissed the revenue's appeal for AY 2012-13. The Tribunal relied on previous rulings in the assessee's ... Addition u/s 40(a)(ia) - secondment expenses on which tax was not deducted at source - HELD THAT:- Since this issue is covered in favour of the assessee by the decisions of the Tribunal in assessee’s own case for the AYs 2009-10 [2017 (1) TMI 1751 - ITAT MUMBAI] & 2011-12 [2018 (2) TMI 2035 - ITAT MUMBAI] and since the findings of the ld. CIT(A) are in accordance with the decision of the Tribunal, we do not find any reason to interfere with the findings of the ld. CIT(A). We accordingly uphold the decision of the ld. CIT(A) and dismissed this ground of appeal of the revenue. Addition on estimation basis on account of compensation from customers - HELD THAT:- As decided in own case [2018 (2) TMI 2035 - ITAT MUMBAI] this Bench has deleted the identical addition in assessee’s case. Issues Involved:1. Appeal against order passed by Ld. Commissioner of Income Tax (Appeals)-22, Mumbai for AY 2012-13.2. Disallowance under section 40(a)(ia) of the Income Tax Act, 1961.3. Addition on account of compensation receivable from customers on accrual basis.4. Challenge of impugned order by the revenue.5. Grounds of appeal raised by the revenue.6. Decision based on ITAT's previous rulings in the assessee's case.7. Dismissal of appeal by the Tribunal.Issue 1: Appeal Against Ld. CIT (A) Order:The revenue appealed against the order of Ld. Commissioner of Income Tax (Appeals)-22, Mumbai for the Assessment Year (AY) 2012-13, where the CIT(A) partly allowed the appeal filed by the assessee against the assessment order passed under section 143(3) of the Income Tax Act, 1961 (the Act).Issue 2: Disallowance under Section 40(a)(ia):The Assessing Officer disallowed secondment charges under section 40(a)(ia) of the Act, along with other additions, totaling the assessee's income at &8377; 425,26,99,804. However, the CIT(A) deleted both these additions based on the decision of the predecessor in the assessee's own case for earlier assessment years.Issue 3: Addition on Accrual Basis:Another addition of &8377; 30,00,000 on account of compensation receivable from customers was made by the AO. The CIT(A) deleted this addition as well, following the mercantile system of accounting and the Tribunal's decision in the assessee's case for the AY 2011-12.Issue 4: Challenge by the Revenue:The revenue challenged the CIT(A)'s order, raising specific grounds of appeal related to the disallowed expenses and additions, emphasizing the non-deduction of tax at source and the accrual basis of accounting for compensation from customers.Issue 5: Grounds of Appeal by the Revenue:The revenue raised grounds of appeal related to the disallowed secondment expenses and the compensation from customers, highlighting the non-deduction of tax at source and the accounting treatment based on the mercantile system.Issue 6: Decision Based on Previous Rulings:The Tribunal examined the previous rulings in the assessee's case for AY 2011-12 and earlier years, where similar issues were decided in favor of the assessee. The Tribunal found no merit in the revenue's appeal, as the issues were already settled in the assessee's favor by the Tribunal's previous decisions.Issue 7: Dismissal of Appeal:Given the consistent decisions in the assessee's favor by the Tribunal, the current Bench upheld the CIT(A)'s findings and dismissed the revenue's appeal for the AY 2012-13, based on the precedents and lack of material changes in the present case.This detailed analysis of the judgment outlines the key issues involved, the specific challenges raised by the revenue, and the Tribunal's decision based on previous rulings and legal interpretations.