ACIT, CHENNAI V. M/s. Malar Travels & Tours P Ltd., CHENNAI

ITA 1016/CHNY/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7449 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 06-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C JOSEPH
• Keywords: Commercial expediency

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI C BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1016/MDS/2011 ASSESSMENT YEAR: 2005-06 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE IV(1), CHENNAI 34. VS. M/S. MALAR TRAVELS & TOURS P. LTD. NO. 116, KASI ARCADE, SIR THIYAGARAYA ROAD, CHENNAI 17. [PAN: AAACM2418H] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI A.C. JOSEPH, JCIT DR ASSESSEE BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE DATE OF HEARING : 01 . 0 3 .201 2 DATE OF PRONOUNCEMENT : 01.03.2012 ORDER PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) V, CHENNAI DATED 08.03.2011 PASSED IN ITA NO .539/2009-10 IN ASSESSMENT YEAR 2005-06. SHRI A.C. JOSEPH, JCIT-DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI SAROJ KUMAR PARIDA, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE. 2. THE REVENUE HAS RAISED 3 GROUNDS OF APPEAL AND THE ONLY ISSUE INVOLVED IN ALL THE GROUNDS OF APPEAL IS THAT THE L D. CIT(A) ERRED IN DELETING THE ADDITION OF ` .21,85,742/- ON ACCOUNT OF DISALLOWANCE OF TRADE DI SCOUNT. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT, I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.101 101101 1016 66 6/ // /M/ M/M/ M/11 1111 11 2 THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA S SHOWN ` .13,69,584/- AS COMMISSION INCOME, WHEREAS, THE COMMISSION RECEI VED AS PER TDS CERTIFICATE AMOUNTED TO ` .35,55,326/- AGAINST THE INCOME SHOWN BY THE ASSESSEE AT ` .13,69,584/-. ON A QUERY BY THE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT THE TRADE DISCOUNT ARE GIVE N TO THE CUSTOMERS AND AFTER REDUCING THE TRADE DISCOUNT, NET COMMISSION I S SHOWN AS INCOME. THE ASSESSEE FILED LEDGER ACCOUNT IN SUPPORT OF ITS CLA IM THAT OUT OF THE BILLS/INVOICES RAISED TRADE DISCOUNTS WERE GIVEN TO THE CUSTOMERS AND AFTER REDUCING THE TRADE DISCOUNTS, THE NET COMMISSION RE CEIPTS ARE SHOWN AS COMMISSION INCOME FOR TAXATION. IN THE OPINION OF T HE ASSESSING OFFICER, THE ASSESSEE REDUCED THE DISCOUNT FROM COMMISSION INCOM E TO AVOID OBLIGATION OF TAX AUDIT UNDER SECTION 44AB OF THE ACT. HE, THE REFORE, ADDED THE DIFFERENCES IN RESPECT OF ACCOUNT OF COMMISSION TO THE INCOME OF THE ASSESSEE. IN THIS WAY, HE MADE THE ADDITION OF ` .21,85,742/-. 4. ON APPEAL BY THE ASSESSEE, THE LD. CIT(A) DELET ED THE ADDITION BY OBSERVING AS UNDER: 4.1 I HAVE CONSIDERED THE FACTS OF THE CASE AND TH E RIVAL SUBMISSIONS. IT IS NOTICE THAT I HAD OCCASION TO DECIDE ASSESSEE S CASE IN THE EARLIER YEAR FOR THE ASSESSMENT YEAR 2004-05. I FIND THAT T HE ASSESSEES CASE IS SQUARELY COVERED BY THE DECISION OF THE EARLIER YEA R IN ITA NO. 613/2008-09. FOLLOWING THE PRECEDENTS I FIND NO REA SONS TO DEVIATE FROM THE FINDINGS GIVEN BY ME IN THE EARLIER ASSESS MENT YEAR. ACCORDINGLY, FOLLOWING THE ABOVE SUPRA THIS GROUND OF A APPEAL IS I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.101 101101 1016 66 6/ // /M/ M/M/ M/11 1111 11 3 ALLOWED. 5. THE FINDING OF THE LD. CIT(A) IN THE ASSESSMENT YEAR 2004-05 WAS AS UNDER: 7.3 I HAVE CONSIDERED THE ARGUMENTS AND EVIDENCES SUBMITTED BY THE ASSESSEE. AS POINTED OUT BY THE ASSESSEE IT IS A NO RMAL TRADE PRACTICE PASSED ON DISCOUNT THEY HAVE EARNED FROM THE AIRLIN ES TO THE CLIENTS PARTICULARLY IN THE CASE OF INTERNATIONAL TRAVELS A ND IN SOME CASES ON THE DOMESTIC TRAVEL ALSO. THIS IS DONE AS A MATTER OF COMMERCIAL EXPEDIENCY TO RETAIN THE CLIENTS AND IMPROVE THEIR BUSINESS. 7.4 AS POINTED OUT BY THE ASSESSEE, THE DISCOUNT PA SSED ON BY THEM IN ALL THE EARLIER YEARS HAVE BEEN ACCEPTED BY THE DEP ARTMENT. FOR THIS YEAR ALSO THE LEDGER ACCOUNTS OF AMOUNT COLLECTED F ROM THE CLIENTS WOULD CLEARLY SHOWS THAT THE AMOUNT REFLECTED IS ON LY NET OF DISCOUNT RECEIPTS GIVEN TO THE CLIENT. THEREFORE THERE IS NO BASIS FOR COMING TO THE CONCLUSION THAT THE APPELLANT HAS NOT PASSED ON THE DISCOUNT TO THE EXTENT OF ` .21,63,408 TO THE CLIENTS AND THE AMOUNT RETAINED F ROM THE CLIENT IS ONLY NET OF DISCOUNT. 7.5IN THE CIRCUMSTANCES THE ADDITION MADE BY THE AS SESSING OFFICER OF ` .21,63,408/- BEING TRADE DISCOUNT PASSED ON TO THE CLIENT IS HEREBY DELETED. THIS GROUND OF APPEAL IS TREATED AS ALLOWE D. 6. ON A QUERY FROM THE BENCH THE LD. DR SUBMITTED THAT THE REVENUE HAS ACCEPTED THE ORDER OF THE LD. CIT(A) PASSED IN THE ASSESSMENT YEAR 2004-05 AND NO APPEAL HAS BEEN FILED BEFORE THE TRIBUNAL AG AINST THAT ORDER. FURTHER, THE LD. DR COULD NOT POINT OUT ANY DISTINGUISHABLE FEATURES IN THE YEAR UNDER APPEAL FROM THE FACTS INVOLVED IN THE ASSESSMENT YE AR 2004-05. WE, THEREFORE, DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT IS CONFIRMED AND THE GROUNDS OF APPEAL O F THE REVENUE ARE DISMISSED. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.101 101101 1016 66 6/ // /M/ M/M/ M/11 1111 11 4 7. NO OTHER POINT HAS BEEN URGED BY THE REVENUE EX CEPT THE ABOVE POINT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES ON 01.03.2012. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER CHENNAI, DATED, THE 01.03.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.