Commissioner Of Income Tax-8 v. M/S. Datamatics Software Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1475 OF 2012 Commissioner of Income Tax-8, Vs.M/s. Datamatics Software Pvt. Ltd. … Appellant … Respondent ..... Mr. Arvind Pinto for the Appellant. …. CORAM : S.C. DHARMADHIKARI AND S.C. GUPTE, JJ. PC : DATE : 03 DECEMBER 2014 .This Income Tax Appeal challenges the order passed by the Income Tax Appellate Tribunal on 4 April 2012 and for the Assessment Years 2006-2007. 2.The Revenue's Appeal No.5433/Mum/2010 was dismissed by the Tribunal by confirming the order of the Commissioner of Income Tax (Appeal) dated 30 April 2010. 3.The issue, from which according to Mr. Pinto a substantial question of law arises, pertains to deletion of the addition of Rs.79,51,827/-. This is pertaining to an agreement between the Assessee Company and Knowledge Works Global Ltd.(KWGL). The assessee is supposed to be providing Facility Management Services to KWGL. The profit and loss account and TDS Certificate filed by the assessee enabled Pg 1 of 3 the Assessing Officer to hold that the same reveals that the Assessee Company was in receipt of Management fee from KWGL. He, therefore, called for the information and which information was provided by the assessee. The assessee produced the ledger account and related documents to show that there was such a transaction or an agreement with KWGL. However, the explanation that has been accepted by the Tribunal reveals that the agreement was terminated. Prior to termination, certain bills were raised by the assessee on KWGL, which record and mention the tax deducted at source on a certain amount. However, both the assessee and KWGL had the necessary books of account to prove that the entries have been reversed. There is no payment which has been received by the assessee in terms of the bills raised. Both parties mutually agreed to terminate the earlier agreement with effect from 1 May 2005. Hence, it is proved that the assessee did not receive payment for the services from May 2005 onwards. Hence, the A.O. could not have called upon the assessee by his communication to furnish the information. Apart therefrom, the information provided by the assessee reveals that there was a genuine business deal. That business deal was never questioned by the Assessing Officer. He has not held that it is collusive or malafide. In such circumstances, the Tribunal, as also the Commissioner, were justified in deleting the addition. Once the genuineness of ledger accounts and related documents has not been doubted then there was no material enabling the Assessing Officer to proceed against the assessee. There could not be any information or any material, which enables us to presume that there must have been some income and which is not disclosed by the assessee. In all such matters and when quasi judicial orders are passed and impugned in further Pg 2 of 3 appeals, the presumption is not as raised by Mr. Pinto or otherwise, the orders would speak for themselves. They must disclose application of mind to the relevant materials, which were produced or directed to be produced by parties. Once they have been produced and which are in the form of documents then their contents cannot be disbelieved by the Assessment Officer on general assumptions or presumptions, which are not found in law. In these circumstances, we are unable to appreciate the arguments of Mr. Pinto that the appeal deserves to be admitted as it raises substantial question of law. Conjectures and surmises or general assumptions or presumptions having no basis in law would not enable us to interfere with the impugned order. The appeal is devoid of merits and is, accordingly, dismissed. No costs. (S.C.GUPTE, J.) (S.C. DHARMADHIKARI, J.) Pg 3 of 3