ACIT, Jaipur V. SHIVANI ENCLAVE PVT. LTD., Jaipur

ITA 1026/JPR/2013

• Counselvise Citation: 102623114 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G G MUNDRA
• Keywords: Depreciation; Relationship of principal and agent
• Section: 143(3); 32

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 1026/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR. CUKE VS. M/S SHIVANI ENCLAVE PVT. LTD., 24, GOYAL HOUSE, AJMER ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AADCS 1951 L VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI KAILASH MANGAL (JCIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI G.G. MUNDRA (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/10/2015 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 10/11/2015 VKNS'K @ ORDER PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 08/10/2013 PASSED BY THE LEARNED CIT (AI, JAIPUR FO R A.Y. 2009-10 THE RESPECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT(A), HAS ERRED IN DELETING ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 2 THE ADDITION OF RS. 32,74,147/- MADE BY THE A.O. ON ACCOUNT OF EXCESS DEPRECIATION CLAIMED BY THE ASSESSEE ON WIND MILL PLANT. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A), HAS ERRED IN DELETING THE ADDITION THE DISALLOWANCE OF RS. 4,82,093/- MADE U/S 40(A)(IA) ON ACCOUNT OF NON DEDUCTION OF TDS FROM CREDIT CARD COMMISSION PAID TO BANK. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A), HAS ERRED IN DELETING THE DISALLOWANCES OF MISC. SUPPLY EXPENSES OF RS. 4,29,676/-. 2. THE FIRST GROUND OF THE REVENUE APPEAL IS AGAINST DELETING THE ADDITION OF RS. 32,74,147/- ON ACCOUNT OF EXCESS DE PRECIATION CLAIMED BY THE ASSESSEE ON WIND MILL PLANT. THE ASSESSEE IS R UNNING HOTELS, RESTAURANTS, BAR AND SHOPPING COMPLEX. IT FILED RET URN OF INCOME ON 27/09/2009 DECLARING TOTAL INCOME OF RS. 50,78,815/ -. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS INSTALLE D WIND MILL AT VILLAGE SAADIYA, DISTRICT JAISALMER, RAJASTHAN OF R S. 3,66,33,382/-. THE LD ASSESSING OFFICER CALLED THE DETAILS FROM THE AS SESSEE AND VERIFIED THE DEPRECIATION CLAIMED BY IT. THE ASSESSEE HAS CLA IMED DEPRECIATION @ 80% ON RS. 3,66,33,282/-. THE LD ASSESSING OFFICER OBSERVED THAT ANCILLARY ITEMS CONNECTED WITH INSTALLATION OF THE WI ND MILL. AS PER ACT, 80% DEPRECIATION IS PROVIDED ON ENERGY SAVING DEVIC ES AND DOES NOT ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 3 INCLUDE ANY OTHER ACCESSORIES & EXPENDITURE CONNECT ED WITH THE SYSTEM. THE ANCILLARY ITEM SHOULD HAVE BEEN PROVIDED DEPRECIATION EITHER UNDER THE HEAD BUILDING @ 10% OR AS PLANT AND MACHINERY @ 15%. THE LD ASSESSING OFFICER GAVE REASONABLE OPPORT UNITY OF BEING HEAD, WHICH WAS REPLIED VIDE LETTER DATED 02/11/2011, WHICH HAS BEEN REPRODUCED ON PAGE NO. 3 AND 4 OF THE ASSESSME NT ORDER. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD ASSESSING OFFICER REFERRED SECTION 32 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AS WELL AS SCHEDULE AS PER APPENDIX 1, RULE 5 OF THE ACT AND HELD THAT ALL THE ASSETS SHOULD BE EITHER COVERED UNDER FOUR HEADS PR OVIDED UNDER THIS APPENDIX, WHICH IS (I) LAND, (II) BUILDING, (III) PL ANT AND MACHINERY & (IV) FURNITURE, FOR WHICH DIFFERENT RATES OF DEPREC IATION HAVE BEEN PROVIDED BY THE LAW. AS PER APPENDIX-I, RULE 5 OF TH E ACT, THE DEPRECIATION ON WIND MILLS IS AS UNDER:- CLAUSE III: MACHINERY & PLANT (XIII) RENEWAL ENERGY SAVING DEVICES BEING: (I) WIND MILLS AND ANY SPECIALLY DESIGNED DEVICES WHICH RUN ON WIND MILLS. (M) ANY SPECIAL DEVICE INCLUDING ELECTRIC GENERATO RS AND PUMPS RUNNING ON WIND ENERGY. ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 4 THE CATEGORIZATION MADE IN THE APPENDIX SHOWS THAT T HERE IS NO INTENTION TO INCLUDE INTERNAL APPROACH ROADS, FOUND ATION WORK AND CRANE PLATFORM FOR WIND MILL, SUPPLY OF ELECTRIC ITE MS LIKE RSJ POLES DISC INSULATOR, CONDUCTOR ETC. IN THE ABOVE BLOCK O F ASSETS. FURTHER THE EXPENDITURE ON ACCOUNT OF LABOUR FOR CIVIL WORK OR ELECTRICAL WORK CARRIED OUT IN CONNECTION WITH THE INSTALLATION OF WI ND MILL ALSO CANNOT BE INCLUDED IN THE DEFINITION OF WIND MILL BY ANY M EANS BECAUSE THEY ARE NOT DEVICES IN ANY SENSE ARE MENTIONED IN (XIII )(L) AND (M). THE LD ASSESSING OFFICER RECATEGORIZED THE ASSETS SHOWN BY THE ASSESSEE IN THE BALANCE SHEET UNDER THE FOLLOWING HEADS: 1] EXPENDITURE INCURRED FOR CIVIL WORK CARRIED OUT AT SITE, CHARGES FOR CREATION OF FOUNDATION/PLATFORM. 2] EXPENDITURE INCURRED ON ACCESSORIES & ELECTRICA L ITEMS TO RENEWABLE ENERGY DEVICE AND THEIR COMPONENTS AND LAB OUR CHARGES FOR INSTALLATION OF ELECTRICAL LIE FOR TRANSMISSION AND METERING. 3] CONSIDERATION IN CONNECTION WITH TRANSFER OF LEA SE LAND. 4] POWER EVACUATION CHARGES. 5] INTEREST ON BANK LOAN. THEREAFTER HE CONSIDERED ALL THE CATEGORIZATION OF A SSETS PARTICULARLY EXPENDITURE INCURRED FOR CIVIL WORK CARRIED OUT AT S ITE, CHARGES FOR ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 5 CREATION OF FOUNDATION/PLATFORM, EXPENDITURE INCURR ED ON ACCESSORIES & ELECTRICAL ITEMS TO RENEWABLE ENERGY DEVICE AND TH EIR COMPONENTS AND LABOUR CHARGES FOR INSTALLATION OF ELECTRICAL L INE FOR TRANSMISSION AND METERING, LAND LEASE RELATED EXPENDITURE, POWER EVACUATION CHARGES & INTEREST CAPITALIZATION AND RECALCULATED THE DEPRECIATION AS PER ABOVE CATEGORIZATION BY THE ASSESSING OFFICER, WHICH IS AS UNDER:- ITEM AMOUNT INITIALLY INCURRED DURING F.Y. 2007-08 DEPRECIATION ALLOWED IN A.Y. 2008-09 WDV AS ON 01/4/2008 AFTER CONSIDERING ASSESSMENT ORDER U/S 143(3) FOR A.Y. 2008- 09 ALLOWABLE RATE OF DEPRECIATION DEPRECIATION ALLOWED FOR A.Y. 2009-10 (UNDER CONSIDERATION) WIND MILL PLANT 27420696 10968278 16452418 80% 13161934 BUILDING 2661554 133077 2528477 10% 252848 PLANT & MACHINERY 6451132 483834 5967298 15% 895095 LEASE AND HOLD LAND 100000 NIL NIL NIL NIL TOTAL ALLOWABLE DEPRECIATION 14309876 DEPRECIATION CLAIMED BY THE ASSESSEE 17584023 DIFFERENCE TO BE ADDED 3274147 FINALLY HE DISALLOWED DEPRECIATION OF RS. 32,74,147 AND THE SAME WAS ADDED IN THE INCOME OF THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A), WHO HAD ALLOWED THE APPEAL BY OBSERVING AS UNDER:- ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 6 4. I HAVE CONSIDERED SUBMISSIONS OF THE APPELLANT. IT IS NOTICED THAT THE A.O. DISALLOWED THE CLAIM OF DEPREC IATION ON THE GROUND THAT THE DEPRECIATION ON THE BUILDING AND PLANT AND MACHINERY MEANT FOR WIND MILL WAS NOT ENTIT LED TO DEPRECIATION @ 80%. THE A.O. ALSO DISALLOWED DEPRECIATION ON LEASEHOLD LAND. 4.1 IT IS FURTHER NOTED THAT THE DEPRECIATION ON WIN D MILL WAS DISALLOWED IN EARLIER YEARS ALSO. IN THE A.Y. 2008-0 9 THE RELIEF WAS GRANTED BY MY PREDECESSOR ON THE BASIS OF THE DECISION OF THE HONBLE ITAT IN THE CASE OF M/S CHIR ASH ASSOCIATES PVT. LTD. (ITA NO. 1632/JP/08). IT IS FU RTHER NOTED THAT THE APPEAL ON THIS GROUND WAS ALLOWED BY M Y PREDECESSOR IN A.Y. 2010-11 AS WELL. THEREFORE, FOLLO WING THE ORDER OF MY PREDECESSOR AS WELL AS OF THE HONBL E ITAT, THE DISALLOWANCE MADE BY THE A.O. IS DELETED. TH E APPEAL ON THIS GROUND IS, ACCORDINGLY, ALLOWED. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD. D R VEHEMENTLY SUPPORTED THE ORDER OF THE LD. ASSESSING OFFICER. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS SUPPORTED THE ORDER OF THE LD CIT(A) AND FURTHER SUBMITTED THAT THIS ISSUE HAS ALR EADY BEEN CONSIDERED BY THE HONBLE ITAT IN THE CASE OF M/S CH IRASH ASSOCIATES PVT. LTD. (ITA NO. 1632/JP/08) IN A.Y. 2008-09 WHER EIN THE HONBLE ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 7 BENCH HAS ALLOWED THE ASSESSEES APPEAL IN FAVOUR OF IT. THE ASSESSEE HAS FURTHER SUBMITTED AS UNDER:- THE ABOVE DISALLOWANCE OF DEPRECIATION ON WDV OF WIND POWER MILL IS SEQUEL OF SIMILAR DISALLOWANCE IN A.Y. 2008-09 AS STATED ABOVE. THE ASSESSEE COMPANY FILED APPEAL AGAINST THE ASSESSMENT ORDER FOR A.Y. 2008-09 BEFOR E CIT(A)-I, JAIPUR. THE CIT(A)-I, JAIPUR VIDE HIS APPE AL ORDER DATED 06/07/2011 IN APPEAL NO. 481/10-11 (COPY SUBMITTED) DELETED THE DISALLOWANCE OF DEPRECIATION AND DIRECTED THE A.O. TO TREAT THE ENTIRE COST OF RS. 3,66,33,382/- AS COST OF WIND MILL AND TO ALLOW DEPRE CIATION @ 80% (FOR YEAR) WHICH HAS BEEN CONFIRMED BY THIS HONBLE BENCH VIDE ORDER DATED 25/7/2014 IN ITA NO. 840/JP/2011. AS THE LD A.O. ADOPTING THE BASIS OF ASSESSMENT ORDER FOR A.Y. 2008-09 FOR MAKING SIMILA R DISALLOWANCE OF DEPRECIATION ON WDV B/F FROM A.Y. 20 08-09 THE LD CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCES A ND THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE FROM THE APP EAL ORDER FOR A.Y. 2008-09 OF CIT(A) DULY CONFIRMED BY T HE HONBLE BENCH IN APPEAL FILED BY DEPARTMENT. THE GR OUND OF APPEAL RAISED BY DEPARTMENT DESERVES TO BE DISMI SSED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THIS B ENCH HAS ALREADY CONSIDERED THE ASSESSEES OWN CASE IN ITA NO. 840/J P/2011 FOR A.Y. ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 8 2008-09 ON IDENTICAL FACTS. THE OPERATIVE PORTION OF THE ORDER IS REPRODUCED AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE VARIOUS HIGH CO URTS AS WELL AS COORDINATE BENCH OF ITAT, JAIPUR IN CASE OF DCIT VS. VIPPY SOLVEX PRODUCTS LTD. AND DCIT VS. M/S CHIRAG ASSOCIATES (P) LTD. RESPECTIVELY, HELD THAT FOUNDAT ION OF PLATFORM, ERECTION, INSTALLATION OF PLANT AND MACHI NERY, PREPARATION OF CRANE PLATFORM FOR WIND MILL AND OTH ER CIVIL WORK CARRIED OUT FOR INSTALLATION ARE INTERNAL PART OF WIND MILL, WHICH HAVE NOT INDEPENDENT USE. THUS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLED FOR 8 0% OF DEPRECIATION ON COMPOSITE WIND MILL PROJECT INCLUDI NG OTHER EXPENDITURE FOR PUT TO USE FOR WIND MILL. THUS, WE CONFIRM THE ORDER OF LEARNED CIT(A). 6. THE SECOND GROUND OF REVENUES APPEAL IS AGAINST DISALLOWANCE OF RS. 4,82,093/- U/S 40(A)(IA) OF THE ACT. THE LD A SSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DEBITED CREDIT CARD COMMISSION OF RS. 8,67,719/-. THE ASSESSEE HAS NOT DEDUCTED TDS ON PAYM ENT OF CREDIT CARD SERVICE CHARGES. EACH CHARGES APPEARED TO BE C OMMISSION IN RESPECT OF CREDIT CARD. SECTION 40(A)(IA) OF THE AC T IS SQUARELY APPLICABLE ON IT. THE ASSESSEE WAS GIVEN REASONABLE O PPORTUNITY OF BEING HEARD. THE ASSESSEES REPLY WAS REPRODUCED BY T HE ASSESSING OFFICER ON PAGE 15 TO 17 OF THE ASSESSMENT ORDER. A FTER CONSIDERING THE ASSESSEES REPLY, THE LD ASSESSING OFFICER HELD THAT ACTUALLY CREDIT CARD COMMISSION PAYMENT IS SERVICES CHARGES. THE LD ASSESSING ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 9 OFFICER ALSO ANALYSED THE CREDIT CARE FACILITY SERV ICES ON PAGE 17 TO 19 OF THE ASSESSMENT ORDER AND FINALLY HELD THAT SERVI CE CHARGES/CREDIT CARD COMMISSION IS NOTHING BUT COMMISSION IS DEFINE D IN SECTION 194H, WHICH HAS ALSO REPRODUCED BY THE ASSESSING OFF ICER ON PAGE 20 AND 21 OF THE ASSESSMENT ORDER. ACCORDINGLY, THE AS SESSEE IS LIABLE TO DEDUCT TDS U/S 194H OF THE ACT. HE FURTHER REFERRED CBDT CIRCULAR NO. 619 ON TDS DATED 04/12/1991 ON PAGE NO. 22 OF TH E ASSESSMENT ORDER. HE FURTHER RELIED ON THE DECISION IN THE CAS E OF CIT VS. SINGAPORE AIRLINES LTD. & OTHER AIRLINES, 213 TAXMAN 441, AHMADABAD TRIBUNAL ORDER IN THE CASE OF CANARA BANK VS. ITO 305 ITR (AT) 189, MUMBAI ITATS DECISION IN THE CASE OF U LTRA ENTERTAINMENT SOLUTIONS LTD. VS. ITO 17 SOT 249. ACCO RDINGLY, HE DISALLOWED THE COMMISSION PAYMENT RELATED TO THESE B ANKS AT RS. 4,82,093/- IN RESPECT OF AXIX BANK LTD. 7. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALLOWED THE APPEAL BY OBSERVING AS UNDER:- 6. I HAVE CONSIDERED FACTS OF THE CASE. IT IS SEEN THAT THIS ISSUE HAS ALREADY BEEN DECIDED IN THE APPEAL FOR A .Y. 2010-11 IN FAVOUR OF THE APPELLANT IN VIEW OF THE O RDER OF ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 10 THE HONBLE ITAT IN THE CASE OF M/S GEMS PARADISE FO R A.Y. 2008-09 (ITA NO. 746/JP/2011). IT HAS BEEN HEL D BY THE HONBLE ITAT THAT THE PROVISIONS OF SECTION 194H WERE NOT APPLICABLE WHEN THERE WAS NO RELATIONSHIP OF PRINCIPAL AND AGENT. FOLLOWING THE DECISION OF MY PREDECESSOR AND THE HONBLE ITAT THE DISALLOWANCE IS DELETED. THE APPEAL ON THIS GROUND IS, ACCORDINGLY, ALLOWED. 8. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT TH E OUTSET, THE LD AR OF THE ASSESSEE HAS SUBMITTED AS UNDER:- THE ABOVE ISSUE HAS ALSO BEEN DECIDED IN FAVOUR OF A SSESSEE BY THE HONBLE BENCH IN CASE OF ASSESSEE COMPANY FO R A.Y. 2008-09 VIDE ORDER DATED 25/07/2014 (C.O. NO. 26/JP /12 ARISING OUT OF ITA NO. 840/JP/2011) WHILE DECIDING C ROSS OBJECTIONS FILED BY ASSESSEE. THUS THE ISSUE IS COV ERED IN FAVOUR OF ASSESSEE FROM SAID APPEAL ORDER. THE LD CI T(A) HAS DECIDED THE APPEAL BY FOLLOWING ITAT, JAIPUR BENCH JU DGMENT IN CASE OF GEM PARADISE VS. ACIT (ITA NO. 746/JP/201 1 DECIDED ON 02/02/2012) IN WHICH IT WAS HELD THAT ASS ESSEE SOLD ITS GOODS THROUGH CREDIT CARD AND ON PRESENTAT ION OF BILL ISSUED AGAINST CREDIT CARD THE BANK MAKES PAYMENT T O ASSESSEE AFTER DEDUCTING AGREED FEES AS PER TERMS A ND CONDITIONS IN CASE OF CREDIT CARD. THIS IS NO A COMM ISSION PAYMENT BUT A FEES DEDUCTED BY THE BANK. THERE IS NO SUCH ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 11 RELATION BETWEEN THE BANK AND THE SHOP KEEPER WHICH ESTABLISHES THE RELATIONSHIP OF A PRINCIPAL AND COM MISSION AGENT. THEREFORE, PROVISION OF SECTION 194H ARE NOT ATTRACTED IN THIS TYPE OF TRANSACTION AND NO TDS IS TO BE DED UCTED THEREFROM. THE ISSUE THUS IS COVERED IN FAVOUR OF A SSESSEE FROM THE SAID JUDGMENT OF ITAT, JAIPUR BENCH AS WELL AS FROM APPEAL ORDER OF ITAT IN CASE OF ASSESSEE FOR A.Y. 20 08-09. THE JUDGMENTS OF OTHER BENCHES OF ITAT ALSO SUPPORTS THIS LEGAL POSITION WHICH ARE (I) TATA TELE SERVICES VS. DCIT 140 ITD 451 (BANG.) (II) DCIT VS VAH MAGNA RETAIL P LTD. ITA NO. 905/HYD 2011 (HYD). (III) ACIT VS JET AIRWAYS LTD. (2014) 146 ITD 682 (BO M) (IV) MARUDHAR HOTELS P LTD. VS. JCIT (2013) 156 TTJ 7 29 (JOD). 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THIS I SSUE HAS BEEN CONSIDERED BY THE COORDINATE BENCH IN GEM PARADISE VS. ACIT IN ITA NO. 746/JP/2011 IN WHICH IT HAS BEEN HELD THAT THE A SSESSEE SOLD ITS GOODS THROUGH CREDIT CARD AND ON PRESENTATION OF BI LL ISSUED AGAINST CREDIT CARD, THE BANK MAKES PAYMENT TO THE ASSESSEE AFTER DEDUCTING AGREED FEES AS PER TERMS AND CONDITIONS IN CASE OF CREDIT CARD. THIS IS ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 12 NOT A COMMISSION PAYMENT BUT A FEES DEDUCTED BY THE BANK. THERE IS NO SUCH RELATION BETWEEN THE BANK AND THE SHOP KEEPE R, WHICH ESTABLISHES THE RELATIONSHIP OF A PRINCIPAL AND COM MISSION AGENT. THEREFORE, TDS IS NOT LIABLE TO BE DEDUCTED ON PAYME NT MADE ON THE BASIS OF CREDIT CARD. THE OTHER CASE LAWS REFERRED BY THE ASSESSEE IS ALSO SQUARELY APPLICABLE. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD CIT(A). 10. THE 3 RD GROUND OF THE REVENUES APPEAL IS AGAINST DELETING THE DISALLOWANCES OF MISC. SUPPLY EXPENSES OF RS. 4,29,6 76/-. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CL AIMED RS, 21,48,379/- ON ACCOUNT OF MISCELLANEOUS SUPPLIES AN D EXPENSES. HE ASKED THE ASSESSEE TO FURNISH THE DETAILS OF THESE EXPENSES DURING THE ASSESSMENT PROCEEDINGS. THE LD ASSESSING OFFICER ON VERIFICATION, WAS FOUND THAT THESE EXPENSES WERE INCURRED MOSTLY IN CASH AND WERE NOT SUPPORTED BY BILLS. THE ASSESSEE HAD MADE SE LF MADE VOUCHERS WHICH ARE NOT VERIFIABLE. THE LD ASSESSING O FFICER HELD THAT IT CANNOT BE SAID THAT THESE EXPENSES WERE WHOLLY AND EX CLUSIVELY WERE INCURRED FOR BUSINESS PURPOSES, THEREFORE, HE DISAL LOWED 20% OUT OF THESE EXPENSES, WHICH COMES TO RS. 4,29,676/-. ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 13 11. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD DELETED THE ADDITION BY OBSERVING AS UNDER:- I HAVE CONSIDERED FACTS OF THE CASE. IT IS NOTICED THAT THE AO HAS MADE THIS DISALLOWANCE ON THE GROUND THAT THE EXPENDITURE OF RS. 21,48,379/- ON MISCELLANEOUS SUP PLIES AND EXPENSES WAS MAINLY IN CASH AND NOT SUPPORTED BY BILLS. IT IS, HOWEVER, SEEN FROM THE BREAK UP GIVEN BY THE APPELLANT THAT OUT OF THESE EXPENSES ONLY RS. 19,53 0/- HAVE BEEN INCURRED IN CASH. MOREOVER, THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE APPELLANT VIDE ORDER OF THE CIT(A)-III , JAIPUR FOR A.Y. 2006-07 IN APPEAL NO. 660/JPR/08-09 DATED 28/09/2010. SINCE, THIS ISSUE IS COVERED IN FAVOUR OF THE APPELLANT, THE DISALLOWANCE IS DELETED. THE APPEAL ON THIS GROUND IS, THEREFORE, ALSO ALLOWED. 12. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFF ICER. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS SUBMITTED THA T IN GENERAL ALL OF THE EXPENSES WERE INCURRED THROUGH CHEQUES AND SUPPO RTED WITH REGULAR BILLS OF REPUTED SUPPLIERS/SERVICE PROVIDER S AND ONLY AS AN EXCEPTION SOME VERY SMALL PAYMENTS MAY BE IN CASH. THE ASSESSEE IS A FIVE STAR HOTEL, WHICH WAS MANAGED PROFESSIONALLY, WHO HAD ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 14 REVENUE SHARING AGREEMENT WITH MULTINATIONAL GROUPS. IT PROCURES BILLS FOR ALL MAJOR EXPENSES AND PAYMENTS ARE THROU GH CHEQUES. INTERNAL VOUCHERS ARE PREPARED ONLY FOR SUCH PETTY EXPENSES FOR WHICH EXTERNAL VOUCHERS ARE NOT AVAILABLE AND SUCH V OUCHERS ARE ALSO SIGNED BY STORE KEEPER AND COUNTERSIGNED BY SENIOR MANAGEMENT STAFF. THE COMPANY HAS INTERNAL AUDIT SYSTEM AS WELL AS THERE IS STATUTORY AUDIT AND IN AUDIT REPORTS NOTHING ADVERS E HAS BEEN POINTED BY THE AUDITOR. THE LD ASSESSING OFFICER ALSO HAD NO T MADE ANY SPECIFIC REMARK BUT MADE A GENERAL REMARK. IN A.Y. 2008-09, 2006-07 AND IN A.Y. 2005-06 SUCH DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER. THE LD CIT(A) DELETED IN TOTO IN ALL THE YEA RS. THEREFORE, HE ARGUED TO CONFIRM THE ORDER OF THE LD CIT(A). 13. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE AS SESSEE IS A FIVE STAR HOTEL MANAGED PROFESSIONALLY. THERE IS AN AGREE MENT WITH MULTINATIONAL COMPANY IN SHARING RECEIPTS. THE LD AS SESSING OFFICER MADE ADDITION BY MAKING GENERAL OBSERVATION. HE IS NOT DEDUCTED ANY SPECIFIC BILL VOUCHERS THAT THE ASSESSEE HAS MA DE CASH PAYMENTS FOR EXPENSES OR MADE SELF MADE VOUCHERS. THE LD DR H AD NOT ITA 1026/JP/2013_ ACIT VS. M/S SHIVANI ENCLAVE P LTD. 15 CONTROVERTED THE FINDINGS GIVEN BY THE LD CIT(A), TH EREFORE, WE UPHOLD THE ORDER OF THE LD CIT(A). 14. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 10/11/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 10 TH NOVEMBER, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-2, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S SHIVANI ENCLAVE PVT. LTD., JAIPU R. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1026/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR