Mahindra and Mahindra Financial Services Ltd. Vs DCIT (ITAT Mumbai)
ITAT Upholds 60% UPS Depreciation and Reduces Section 14A & Commission Disallowance
The Income Tax Appellate Tribunal (ITAT) Mumbai decided three connected appeals comprising two appeals by the assessee for Assessment Years (AYs) 2006-07 and 2007-08 and one appeal by the Revenue for AY 2006-07. The common issues related to disallowance of commission and brokerage expenditure, disallowance under Section 14A, and depreciation on UPS equipment.
For AY 2006-07, the assessee challenged the disallowance of commission and brokerage expenditure of Rs.2,54,97,367 sustained by the Commissioner of Income-tax (Appeals). The assessee contended that the Commissioner had travelled beyond the scope of the Tribunal’s earlier remand, that confirmations, PAN details, TDS deductions under Section 194H, bank payments, and KYC records established the genuineness of the payments, and that notices issued under Section 133(6) had either been served or could not reasonably be complied with after a lapse of more than ten years. The assessee also argued that the Assessing Officer had made an impermissible ad hoc disallowance.
The Revenue submitted that the Assessing Officer had fairly issued notices under Section 133(6) to 100 parties and had already granted relief in respect of parties that responded, making the remaining disallowance justified.
