DCIT, Pune V. Chadha Reepu Daman, Pune

ITA 1098/PUN/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59971 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 02-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 1098/PN/2010 (ASSTT. YEAR: 2006-07) DY. COMMISSIONER OF INCOME-TAX, .. APPELLANT CIR. 8, AKURDI, PUNE VS. CHADHA REEPU DAMAN, .. RESPONDE NT PROP. ACHEMY FOILS, 253 TIRUMALA INDUSTRIAL ESTATE, HINJAWADI, PUNE 411 037 PAN: AAMPC1122D APPELLANT BY : SHRI S K AMBASTHA RESPONDENT BY : NONE DATE OF HEARING : 17.01.2012 DATE OF PRONOUNCEMENT : 24.01.2012 ORDER PER G.S. PANNU, A.M : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V, PUNE DATED 14. 5.2010 WHICH, IN TURN, HAS ARISEN FROM ORDER DATED 20.10.2009 PASSED BY THE ASSESSING OFFICER, UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SH ORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. IN THIS CASE, INSPITE OF NOTICES HAVING BEEN ISSUED ON M ORE THAN ONE OCCASION, NONE HAS APPEARED ON BEHALF OF THE RESPONDENT- ASSESSEE AND ACCORDINGLY, THE APPEAL IS DISPOSED OF AFTER HEARING THE APPELLANT-REVENUE ON MERITS AND EX-PARTE QUA THE RESPONDENT-ASSESSEE. 3. IN THIS APPEAL, ALTHOUGH REVENUE HAS RAISED MULTIPL E GROUNDS OF APPEAL, BUT ESSENTIALLY THE GRIEVANCE IS AGAINST THE DI RECTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) TO THE ASSESSING OFFICE R TO RECOMPUTE THE ASSESSEES INCOME FROM AGENCY COMMISSION AFTER ALLOWING ADMISSIBLE EXPENSES ON MERCANTILE BASIS. 4. IN BRIEF, THE FACTUAL BACKGROUND GIVING RISE TO THE PRESENT DISPUTE IS AS FOLLOWS. THE ASSESSEE IS AN INDIVIDUAL CARRYING ON THE BU SINESS OF MANUFACTURING/PRINTING OF ALUMINUM FOILS AND ALSO CARR YING ON THE BUSINESS OF INDENTING COMMISSION AGENCY. THE DISPUTE BEFORE US PERTAI NS TO THE MANNER OF COMPUTING INCOME FROM THE BUSINESS OF INDENTING COMMISSION AGENCY. IN THIS REGARD, THE ASSESSING OFFICER NOTICED THAT ASSESSEE WAS DECLA RING INCOME ON CASH BASIS WHICH, ACCORDING TO HIM, WAS NOT ACCEPTABLE AND HE REJECTED THE SAME BY INVOKING PROVISIONS OF SECTION 145(3) OF THE ACT. AFTER INVOKING SECTION 145(3) OF THE ACT, THE ASSESSING OFFICER WORKED OUT THE PROFITS OF INDENTING COMMISSION AGENCY BUSINESS BY ADOPTING TOTAL RECE IPTS AS PER THE TDS CERTIFICATES ISSUED AND REDUCING THEREFROM THE EXPEN DITURE AS CLAIMED IN THE PROFIT & LOSS ACCOUNT THEREBY RESULTING IN AN INCOME OF RS 6,05,978/- AS AGAINST RS 1,67,933/- DISCLOSED BY THE ASSESSEE. 5. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS UPHELD T HE ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOK RESULTS DECLARED ON CASH BASIS AND COMPUTING THE INCOME OF THE INDENTING COMMISSION ON MERCA NTILE BASIS. SIMULTANEOUSLY, THE COMMISSIONER OF INCOME-TAX (APPEAL S) DIRECTED THE ASSESSING OFFICER THAT THE EXPENSES BE ALLOWED TO THE ASSESSE E ON THE SAME BASIS I. E. MERCANTILE BASIS AND NOT ON CASH BASIS. CONSIDER ING THAT THE SAME WAS A FACTUAL ASPECT REQUIRING VERIFICATION, THE COMMISSIO NER OF INCOME-TAX (APPEALS) HAS DIRECTED THE ASSESSING OFFICER TO RECOMPUTE THE ASSESSEES INCOME FROM COMMISSION AGENCY AFTER ALLOWING ALL EXPENDI TURE ON MERCANTILE BASIS. AGAINST SUCH DIRECTION, REVENUE IS IN APPEAL BEFORE US. 6. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) EXCEEDED HIS JURISDI CTION IN DIRECTING THE ASSESSING OFFICER TO ALLOW EXPENSES ON MERCANTILE BASI S EVEN WHEN IT WAS CLEAR THAT THE ASSESSING OFFICER HAS ALLOWED EXPENSES AS CLAI MED IN THE PROFIT & LOSS ACCOUNT. 7. WE HAVE CONSIDERED THE SUBMISSIONS PUTFORTH BY THE REV ENUE AND FIND NO REASONS TO INTERFERE WITH THE DECISION OF THE COMMI SSIONER OF INCOME-TAX (APPEALS). QUITE CLEARLY, THE INCOME OF THE ASSESSEE HAS B EEN DIRECTED TO BE COMPUTED ON MERCANTILE BASIS AS AGAINST CASH BASIS DISCLOSED TH E PROFIT & LOSS ACCOUNT ANNEXED WITH THE RETURN OF INCOME. AS A CONSEQ UENCE, THE COMMISSIONER OF INCOME-TAX (APPEALS) MADE NO MISTAKE IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE EXPENSES ALSO ON MERCANTILE BASIS AFTER VERIFYING THE FACTUAL POSITION SOUGHT TO BE MADE OUT BY THE ASSESSEE IN THIS REGARD. WE FIND THAT THE DIRECTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) WITH REGARD TO THE ALLOWABILITY OF THE EXPE NSES, WHICH IS NOW SOUGHT TO BE CHALLENGED BY THE REVENUE, IS FAIR AND REASONABL E INTENDED TO ACHIEVE IN THE MATTER OF ACCOUNTING FOR THE CORRECT INCOME, AND TH EREFORE, WE FIND NO REASON TO INTERFERE WITH THE SAME. ACCORDINGLY, WE AFFI RM THE DIRECTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE OBJECTION RAISED BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 24 TH DAY OF JANUARY, 2012. SD/- SD/- (I C SUDHIR) (G.S . PANNU) JUDICIAL MEMBER ACCOUNTANT MEMB ER PUNE, DATED: 24 TH JANUARY, 2012 B COPY TO:- 1) CHADHAREEPU DAMAN, PUNE 2) DCIT CIR. 8 PUNE 3) THE CIT (A)-V, PUNE 4 THE CIT-V, PUNE 5) DR, A BENCH, I.T.A.T.,PUNE. 6) GUARD FILE TRUE COPY BY ORDER SR. PS, ITAT PUNE