TMI Blog2020 (11) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... w either that the sales were sham transactions or that the market prices were in fact paid by the purchasers, the mere fact that the goods were sold at a concessional rate to benefit the purchasers at the expense of the company would not entitle the income-tax department to assess the difference between the market price and the price paid by the purchasers, as profit of the company. We affirm the order of the Ld. CIT(A) deleting the addition - Decided against revenue. - ITA No. 1117/MUM/2019, ITA No. 1650/MUM/2019 - - - Dated:- 25-11-2020 - Shri Saktijit Dey (Judicial Member) And Shri N.K. Pradhan (Accountant Member) For the Assessee : Mr. Madhur Agarwal, AR For the Revenue : Ms. Shreekala Pardeshi, DR ORDER PER N.K. PRADHAN, A.M. The captioned cross appeals - one by the assessee and other by the Revenue- are directed against the order of the Commissioner of Income Tax (Appeals)-20, Mumbai [in short CIT(A)] and arise out of the assessment completed u/s 143(3) of the Income Tax Act 1961 (the Act ). As common issues are involved, we are proceeding to dispose them off by this consolidated order for the sake of convenience. ITA No. 1117/MUM/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the case are that the assessee filed its return of income for the assessment year (AY) 2013-14 on 29.11.2013 declaring total loss of ₹ 21,24,640/-. The assessee is engaged in providing market research in health insurance and healthcare service systems. It filed revised return to include net income of ₹ 18,27,684/-, thereby declaring total loss of ₹ 2,96,956/-. The Assessing Officer (AO) completed the assessment u/s 143(3) on 28.03.2016 by making an addition of ₹ 3,68,97,011/- on account of service charges. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that vide order dated 31.12.2018, the Ld. CIT(A) directed the AO to delete the sum of ₹ 3,66,00,060/- which was added as notional income. However, by his office letter dated 17.12.2018, the Ld. CIT(A) requested the assessee to explain the basis for debiting ₹ 74,16,058/- out of the other expenses of ₹ 9,95,10,344/- and ₹ 2,58,104/- out of the Employee Benefit Expenses debited to its profit and loss account. Also he asked the assessee to explain why the expenditure debited to the profit and loss account should not be restricted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 54,84,021/- 2. ₹ 1,99,30,449/- Total ₹ 2,54,14,470/- 4. Before us, the Ld. counsel for the assessee submits that the notice dated 17.12.2018 issued by the Ld. CIT(A) to the assessee mentions the following : Sub : Appeal No. - CIT (A), Mumbai- 20/10143/2016-17 for the Assessment Year 2013-14 regarding. The above noted appeal against the order u/s 143(3) of Income Tax Act preferred by you has been fixed for hearing on 27/12/2018 at 11:00 AM in my office. You are requested to attend in person or through a representative. Your counsel should bring the power of attorney while attending the appellate proceedings, if not filed so far. Attendance is not necessary if you wish that the appeal may be decided on the basis of your written submissions which may be furnished on or before the said date. Please also send your written MUMBAI.CIT.APL20@INCOMETAX.GOV.IN Drawing our attention to the above show cause notice it is stated by the Ld. counsel that the Ld. CIT(A) should have mentioned specifically the proposal for enhancement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. In the rectification application filed before the Ld. CIT(A) on 23.05.2019, the assessee has stated the following : a) Non-receipt of notice issued under section 251 of the Act On perusal of the Order, it is observed that your goodself has enhanced the income for non-furnishing of response as requested vide notice dated 17 December 2018 issued under section 251(2) of the Act requesting to explain why the enhancement should not be made. In this regard, we note that the said notice dated 17 December 2018 was issued to an old address of CHSI (i.e. Flat No. 1201, 12th Floor, Nair House, 14A Road, Ahinsa Marg, 14B Road, Khar West, Mumbai - 400052). It would be pertinent to note that, CHSI had changed its registered office address and updated the same in the income-tax database vide PAN rectification application dated 4 February 2016 (Copy of the application filed reflecting the updated address is enclosed as Annexure 4). The updated address of CHSI as per the application is as under: 401/402, Raheja Titanium, Western Express Highway, Goregaon East, Mumbai - 400063 The same was also intimated to the AO vide letter dated 3 December 2015. Copy of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case, Ld. CIT(A) was justified in not appreciating the fact that the functions so performed by the assessee company involved not only highly technical and professional skill but also the expertise of its directors etc, which cannot be believed to have been carried out without charging any professional fees or service charges. 4. Whether on the facts and circumstances of the case, Ld. CIT(A) was justified in not discussing and deliberating upon the various issues involved in the assessment as evident from para No.4.4.1 of the appellate order. 5. The appellant prays that the order of the Ld. CIT(A) on the grounds be set aside and that of the Assessing Officer be restored. 9. In the assessment order dated 28.03.2016, the AO considered the profit embedded in the development infrastructure for M/s Cigna TTK as income of the assessee. Observing that the assessee has incurred expenditure of ₹ 18,44,85,058/- for services rendered to M/s Cigna TTK during the year, the AO estimated the services charges @ 20% of ₹ 18,44,85,058/- which comes to ₹ 3,68,97,011/- and made an addition of it to the total income of the assessee. In appeal, the Ld. CIT(A) delete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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