TaxTMI 
TaxTMI 
2019 (4) TMI 1506
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...., the assessee filed its return of income on 6th November 2007, declaring nil income. In course of assessment proceedings, the Assessing Officer on verifying the audited financial statements of the assessee noticed that against professional fees shown of Rs. 31,84,59,835, the assessee has incurred substantial expenses on account of salary, bonus, etc., amounting to Rs. 16,37,40,274, compared to preceding years expenditure of Rs. 8,55,96,230. Being of the view that the expenditure claimed by the assessee is disproportionate to the increase in income, the Assessing Officer called upon the assessee to explain the details of income and expenses. On verifying the details furnished by the assessee, the Assessing Officer noticed that in the previous year relevant to the assessment year under dispute, the assessee had various on-going projects, whereas the assessee has not shown any work-in-progress. On cross verifying the bill register for the period 1st April 2007 to 30th April 2007, the Assessing Officer observed that the assessee has raised bills of Rs. 84,07,964, in the month of March 2007, which consists of the bill for an amount of Rs. 47,92,500, raised on Diageo India Pvt. Ltd.,....
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....ficer. 5. The learned Departmental Representative relying upon the observations of the Assessing Officer submitted, since the major portion of the work was completed in the impugned assessment year, it should have been shown as work-in-progress in the accounts of the assessee and offered as income. He submitted, without offering the income in the assessment year wherein it accrued, the assessee has deferred it to the next assessment year. Therefore, he submitted, the Assessing Officer was justified in adding the amount to the income of the assessee. 6. The learned Authorised Representative submitted, the assessee is providing consultancy services, hence, there cannot be any work-in-progress. In any case of the matter, he submitted, the bill for the services rendered was raised in April 2007, the assessee has correctly offered it to tax in assessment year 2008-09 and the Assessing Officer has also assessed it as income in assessment year 2008-09. He submitted, the Assessing Officer has not disputed that the assessee has offered the unbilled amount of Rs. 47,92,500, as income in assessment year 2008-09. That being the case, the same amount cannot be taxed in two assessment year....
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....to be excluded from the income of the assessee in assessment year 2008-09, since, it has already been assessed in that assessment year. This is due to the settled legal principle that the same income cannot be assessed in two assessment years. 8. One more interesting fact relating to the impugned addition which has come to our notice is, as per the facts narrated by the Assessing Officer in the impugned assessment order, in the month of April 2007, the assessee had raised a number of bills totaling to Rs. 84,07,964=28. Whereas, out of those bills, the Assessing Officer has picked up only one bill raised on 18th April 2007, to Diageo India Pvt. Ltd. for the amount of Rs. 47,92,500, while ignoring rest of the bills raised in April 2007. Even two other bills raised by the assessee on Diageo India Pvt. Ltd. on 18th April 2007 and 23rd April 2007, have been ignored by the Assessing Officer. We do not find any rationale / logic behind such selective approach of the Assessing Officer. Be that as it may, since the amount in dispute has already been offered as income by the assessee in assessment year 2008-09 and assessed to tax, we do not find any reason to interfere with the decision o....
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....eport. 13. The learned Authorised Representative submitted, the Department should not have any grievance since learned Commissioner (Appeals) after verifying the factual details has found that there is no difference / discrepancy with regard to the amount of Rs. 17,66,393. Further, he submitted, since the Assessing Officer has not rejected the books of account of the assessee, no disallowance could be made. 14. We have considered rival submissions and perused material on record. As could be seen from the facts on record, the Assessing Officer has disallowed an amount of Rs. 80,74,715 due to failure on the part of the assessee to co-relate the reversal of entries, however, before learned Commissioner (Appeals), the assessee has filed fresh material reconciling the differences pointed out by the Assessing Officer and the learned Commissioner (Appeals) after considering the observations of the Assessing Officer in the remand report, the submissions made by the assessee and evidences filed was satisfied that the assessee has properly reconciled / co-related the reversal of entries for an amount of Rs. 17,66,393. The learned Departmental Representative has not brought before us an....
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....r, did not find merit in the submissions of the assessee. He observed, by contributing towards DTT subscription, the assessee has derived enduring benefit, therefore, the expenditure is of capital nature. Accordingly, he disallowed assessee's claim. The assessee challenged the aforesaid disallowance before the first appellate authority. 19. The learned Commissioner (Appeals) after considering the submissions of the assessee in the context of facts and material on record as well as the remand report furnished by the Assessing Officer observed that the expenditure was incurred by the assessee for enabling the profit making structure to work more efficiently. He observed, subscription made by the assessee for fine tuning business operation to enable the management to run its business effectively, efficiently and profitably leaving the fixed asset untouched, would be in the nature of revenue expenditure. Further, the learned Commissioner (Appeals) observed, since similar payment made towards DTT subscription was not disallowed in any of the earlier or subsequent assessment years, it should not be disallowed in the impugned assessment year. Accordingly, he deleted the addition made b....
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....ar subscription was paid by the assessee in the preceding as well as succeeding assessment years. Notably, on verifying the scrutiny assessment orders passed under section 143(3) of the Act for the assessment years 2006-07, 2009-10 and 2010-11 and 2011-12, copies of which have been submitted befor us, it is observed that no such disallowance was made by the Assessing Officer in the aforesaid assessment years. There being no difference in facts brought to our notice in the impugned assessment year, applying the rule of consistency also, the expenditure claimed by the assessee has to be allowed, since, the nature of expenditure as revenue has been accepted by the Department in all other assessment years except the impugned assessment year. That being the case, we uphold the decision of the learned Commissioner (Appeals) on the issue. Ground raised is dismissed. 23. In the result, Revenue's appeal is dismissed. ITA no.6787/Mum./2014 Assessee's Appeal 24. The only issue in assessee's appeal relates to disallowance of Rs. 63,28,322, out of the professional fees. 25. Factual aspect relating to the aforesaid issue has already been discussed herein before while deciding ground ....