9911796707
TMI Blog2020 (9) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... siness, are directed against the common order dated 30.01.2019, passed by the Income Tax Appellate Tribunal 'B' Bench, Chennai (for brevity "the Tribunal") in I.T.A.Nos.2412 & 2413/Chny/2017 for the assessment years 2013-14 and 2014-15. 2. There were two other appeals filed by the assessee against the very same order in T.C.A.Nos.468 and 469 of 2019 challenging that portion of the order passed by the Tribunal, which rejected the entire case of the assessee and allowed the Revenue's appeals on an issue, which was never canvassed by the Revenue. These appeals were disposed of by order dated 16.03.2020 and in this judgment, we are concerned about the correctness of the order passed by the Tribunal in I.T.A.Nos.2412 & 2413/Chny/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 143(1) of the Act and subsequently, the assessments were selected for scrutiny and notices were issued under Section 142(1) of the Act on 08.06.2015/09.06.2016 calling for details. After the books of accounts were produced by the assessee and information was furnished, the assessment was completed under Section 143(3) on 15.03.2016 by making an addition of Rs. 2,16,80,648/- towards inflation of expenditure under the head "Service Charges" and addition of Rs. 3,06,509/- towards interest on I.T. Refund for the assessment year 2013-14. The assessment for the year 2014-15 was completed under Section 143(3) of the Act on 30.09.2016 making an addition of Rs. 2,03,68,410/- stating to be bogus expenditure claimed towards service char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed relief in the absence of any evidence in support of the claim. During the course of assessment, the Assessing Officer pointed out that the assessee has debited amount towards service charges. The assessee was called upon to explain the same, who had stated that the service charges are paid in lieu of tips. Since the tips were received by the room boys only whereas, the other employees were not able to avail the same and ultimately, the matter was discussed with the employees and an agreement was entered into. The assessee furnished breakup of the service charges to the three category of employees, viz., permanent employees, managerial and other employees and administrative/temporary employees. The Assessing Officer examined a few of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37/- claimed by the assessee for the assessment year 2013-14, the CIT(A) accepted payment of Rs. 38,64,292/- and disallowed Rs. 1,22,70,445/-. For the assessment year 2014-15, the total amount of service charges claimed to have been paid is Rs. 1,40,36,121/- of which, the CIT(A) granted relief to the extent of Rs. 22,56,539/- and made disallowance of Rs. 1,17,79,582/-. In the opinion of the Tribunal, the orders of the CIT(A) were merely based on presumption that the assessee company would not have paid to the employees to the extent of service charges collected. There are two aspects to it. Firstly, whether the Assessing Officer was right in concluding that the assessee had adopted this modus operandi for inflating its expenditure. Under no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial Disputes Act, 1947. 9. The Assessing Officer while rejecting the assessee's contention has not disbelieved any of these documents. The payments effected in cash were sought to be substantiated by the assessee by producing vouchers. If the Assessing Officer was of the view that the vouchers are fabricated documents, then all of such employees should have been examined and statements should have been recorded and if the same was done, the assessee is entitled to an opportunity of cross examination. This having not been done, the assessment order is flawed on this aspect. The Assessing Officer has referred to statements of four persons and on reading of selected portions of the statement, as extracted in the assessment order, does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vouchers and registers, insofar as temporary employees are concerned, are not admissible, then there should have been a finding to the said effect, which is conspicuously absent in the orders passed by the CIT(A). 11. The Tribunal erred in observing that the orders of the CIT(A) to the extent it grants relief to the assessee are on presumption. This finding is incorrect because the relief granted by the CIT(A) was in respect of payments, which were verifiable. It is not in dispute that the vouchers and registers were produced before the Assessing Officer and the originals are also shown to have been produced at the time of assessment. The Assessing Officer merely going by statements of a few employees, cannot disbelieve statutory registe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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