M/s. Isha Decor Solutions India Pvt. Ltd., Gurgaon V. DCIT, Gurgaon

CO 220/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3616 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-03-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 14-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ABHISHEK GOEL
• Section: 43; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BEN CH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA ACCOUNTANT MEMBER ITA NO. 2366/DEL/2016 [A.Y 2011-12] THE D.C.I.T VS. ISHA DECOR SOLUTIONS INDIA PVT L TD CIRCLE - 2 J 2/14, DLF CITY, PHASE - 2 GURGAON GURGAON. PAN : AACCI 0675 C CO NO. 220/DEL/2016 (A/O ITA NO. 2366/DEL/2016 [A.Y 2011-12]) ISHA DECOR SOLUTIONS INDIA PVT LTD VS. THE D.C .I.T J 2/14, DLF CITY, PHASE - 2 CIRCLE - 2 GURGAON GURGAON. PAN : AACCI 0675 C [APPELLANT] [RESPONDENT] DATE OF HEARING : 04.03.2020 DATE OF PRONOUNCEMENT : 05.03.2020 ASSESSEE BY : SHRI ABHISHEK GOEL, CA REVENUE BY : MS. RAKHI VIMAL, SR. DR 2 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE ARE PREFERRED AGAINST THE ORDER OF THE CIT(A) - 1, GURGAON DATED 19.02.2016 PERTAINING TO A.Y 2011-12. 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT TH E LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 2,21,64,928/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED/UNVERIFIED SUNDRY CREDITORS. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT W HILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OFFICER FOUND T HAT THE ASSESSEE HAS SHOWN SUNDRY CREDITOR OF RS. 2,21,64,928/- IN THE N AME OF BO CONCEPT, DENMARK. THE ASSESSEE WAS ASKED TO FURNISH CONFIRM ATION FROM THE SAID CREDITOR. IN RESPONSE, THE ASSESSEE FURNISHED THE ADDRESS OF THE CREDITOR ALONGWITH COPY OF LEDGER ACCOUNT, WHICH WA S NOT FOUND TO BE VERIFIED AND CONFIRMED BY THE CREDITOR. 3 4. THE ASSESSING OFFICER ONCE AGAIN ASKED THE ASSES SEE TO FURNISH CONFIRMATION FROM THE SAID CREDITOR. ON RECEIVING N O PLAUSIBLE REPLY AND DRAWING SUPPORT FROM VARIOUS JUDICIAL DECISIONS , THE ASSESSING OFFICER MADE ADDITION OF RS. 2,21,64,928/- U/S 68 O F THE ACT. 5. BEFORE THE LD. CIT(A), IT WAS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THAT DURING THE ASSESSMENT PROCEEDINGS ITSELF, THE ASSESSEE HAS STATED THAT THE SAID CREDITS ARE ON AC COUNT OF PURCHASES MADE BY IT FROM THE COMPANY BO CONCEPT, DENMARK. I T WAS STRONGLY CONTENDED THAT THE PURCHASES COULD BE EASILY VERIFI ED FROM THE PURCHASE INVOICES, SHIPPING BILLS, BILLS OF ENTRY, ETC AND ALSO FROM THE LEDGER ACCOUNT OF THE SUPPLIER AND THE PAYMENTS ARE REFLECTED IN THE BANK ACCOUNTS. IT WAS EXPLAINED TO THE LD. CIT(A) THAT THE AMOUNT RELATES TO THE OUTSTANDING BALANCE IN THE ACCOUNT O F BO CONCEPT, DENMARK, THE SOLE SUPPLIER OF GOODS TO THE ASSESSEE COMPANY. 6. AFTER CONSIDERING THE FACTS AND SUBMISSIONS, THE LD. CIT(A) WAS CONVINCED WITH THE GENUINENESS OF THE TRANSACTIONS AND DELETED THE ADDITION MADE U/S 68 OF THE ACT. 4 7. BEFORE US, THE LD. DR STRONGLY RELIED UPON THE F INDINGS OF THE ASSESSING OFFICER. IT IS THE SAY OF THE LD. DR THA T THE LD. CIT(A) HIMSELF HAS NEITHER VERIFIED NOR DIRECTED THE ASSESSING OFF ICER TO VERIFY THE PURCHASES. 8. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. 9. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OR DERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT BO CONC EPT, DENMARK IS THE SOLE SUPPLIER OF GOODS TO THE ASSESSEE COMPANY. BO CONCEPT IS A BRANDED MANUFACTURER AND SUPPLIER OF READY TO ASSEM BLE FURNITURE AND THE COMPANY IS A FRANCHISEE, HAVING RETAIL OUTLET A T PALLADIUM MALL, MUMBAI. DETAILS OF PURCHASES ARE EXHIBITED AT PAGE S 43 TO 51 OF THE PAPER BOOK AND BALANCE OUTSTANDING IN THE NAME OF B O CONCEPTS, DENMARK IS OUT OF PURCHASES MADE FROM IT BY THE ASS ESSEE. THESE TRANSACTIONS ARE CONTINUOUS TRANSACTIONS. IN OUR C ONSIDERED OPINION, SUCH TRANSACTIONS DO NOT COME WITHIN THE PURVIEW OF SECTION 68 OF THE ACT. CONSIDERING THE FACTS OF THE CASE IN TOTALITY , WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A ). 5 10. THE CROSS OBJECTION IS IN SUPPORT OF THE ORDER OF THE LD. CIT(A) AND HENCE NEEDS NO SEPARATE ADJUDICATION AND, ACCOR DINGLY, DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 2366/DEL/2016 AS WELL AS THE CROSS OBJECTIONS IN CO NO. 220/DEL/2016 STAND DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05.03 .2020. SD/- SD/- [H.S. SIDHU] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05 TH MARCH, 2020. VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 6 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER