ITO, New Delhi V. M/s. All Time Softech Pvt. Ltd., Delhi

ITA 1428/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4327 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDER SINGH
• Keywords: Additional evidence; TDS
• Section: 144

Judgement Text

1 ITA NO. 1428/DEL/2017 IN THE INCOME TAX APPE LLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND DR. B. R. R. KUMAR, ACCOUNT ANT MEMBER ITA NO. 1428/DEL/ 2017 ( A.Y 2012-13) (THROUGH VIDEO C ONFERENCING) ITO WARD-2(2), ROOM NO. 375, C. R. BUILDING, I. P. ESTATE, NEW DELHI (APPELLANT) VS ALL TIME SOFTECH PVT. LTD. 1/3866, BHAGWANPUR KHERA, BHAGIRATH VIHAR, LONI ROAD DELHI AAKCA0326Q (RESPONDENT) APPELLANT BY SH. VIRENDER SINGH, SR. DR RESPONDENT BY NONE ORDER PER SUCHITRA KAMBLE, JM THIS APPEALS IS FILED BY THE REVENUE AGAINST THE OR DER DATED 05/1/2016 PASSED BY CIT(A)-1, NEW DELHI FOR ASSESSMENT YEAR 2 012-13. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD CIT(A) ERRED IN LAW AND ON FACTS IN HOLDI NG THAT THE SUM OF RS. 17,34,797/- IS TAXABLE , ON RECEIPT BASIS WHICH IS AGAINST THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE COMPANY AS ACC RUAL OF INCOME IS EVIDENCED BY DEDUCTION OF TAX THEREON DURING THE PR EVIOUS YEAR UNDER CONSIDERATION. 2. LD CIT(A) ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.3,51,90,000/- MADE U/S 68 OF IT ACT, 1961 FOR TH E FOLLOWING REASONS: 2.1 LD C1T(A) ERRED IN LAW IN ADMITTING ADDITIONAL EVI DENCE WITHOUT DATE OF HEARING 28.09.2021 DATE OF PRONOUNCEMENT 05.10.2021 2 ITA NO. 1428/DEL/2017 RECORDING REASONS IN WRITING AS MANDATED BY RULE 46 A(2) OF I. R. RULE 1962. 2.2 THE ADMISSION OF ADDITIONAL EVIDENCE PRODUCED IN T HE HEARING BY THE ASSESSEE, BY THE CIT(A) CANNOT BE INFERRED BY T HE FACT THAT THESE WERE FORWARDED TO THE AO SEEKING REMAND REPORT OR PROVID ING OPPORTUNITY IS REGULATED BY RULE 46A(3) OF THE RULES. 2.3 LD C1T(A) ERRED IN LAW AND ON FACTS IN RELYING UPO N AOS REPORT AS IT DOES NOT RECORD ANY FINDING REGARDING CREDITWORTHIN ESS OF SO CALLED INVESTORS AND GENUINENESS OF RELATED TRANSACTIONS. 2.4 LD CIT(A) OUT TO HAVE RECORDED A CLEAR FINDING OF CREDITWORTHINESS OF SHARE APPLICANTS AND GENUINENESS OF RELATED TRANSAC TIONS PARTICULARLY WHEN ASSESSEE DID NOT APPEAR BEFORE THE AO IN COURSE OF ASSESSMENT PROCEEDINGS. 3. THE ASSESSEE COMPANY IS ENGAGED IN MANPOW ER SUPPLY AND SOFTWARE SERVICES. RETURN OF INCOME WAS FILED ON 31.03.2013 DECLARING NIL INCOME. ASSESSMENT U/S 144 WAS MADE ON 13.03.2015 DETERMINING TOTAL INCOME AT RS.3,69,34,060/-. IN THE ASSESSMENT ORDER PASSED U/S 144, THE ASSESSING OFFICER HAS ADDED RS.17,34,797/- ON ACCOUNT OF TDS RECEIPTS RECORDED IN AS 26. THE ASSESSING OFFICER ALSO ADDED RS.3,51,90,000/- ON ACCOUNT OF SHARE CAPITAL INCLUDING SHARE PREMIUM OF RS.3,15,81,000/- RECEIVED BY THE ASSESSEE DURING THE YEAR. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE AS SESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. 5. AT THE TIME OF HEARING DESPITE GIVING NOTICE NON E APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, WE ARE PROCEEDING ON THE BASIS OF ASSESSMENT ORDER, ORDER OF THE CIT(A) AND THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES BY THE ASSESSEE/AR. 6. THE LD. DR SUBMITTED THAT THE CIT(A) ERRED IN HO LDING THAT A SUM OF RS. 17,34,797/- IS TAXABLE ON RECEIPT BASIS WHICH IS AG AINST THE METHOD OF 3 ITA NO. 1428/DEL/2017 ACCOUNTING FOLLOWED BY THE ASSESSEE COMPANY AS ACCR UED OF INCOME IS INCURRED BY DEDUCTION OF TAX THEREON DURING THE PREVIOUS YEA R UNDER CONSIDERATION. AS REGARDS, DELETION OF ADDITION OF RS.3,51,90,000/- M ADE U/S 68 OF THE INCOME TAX ACT, 1961, THE LD. DR SUBMITTED THAT THE CIT(A) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE WITHOUT RECORDING REASONS IN WR ITING AS MANDATED BY RULE 46A (2) OF THE INCOME TAX RULES 1962. THE LD. DR F URTHER SUBMITTED THAT SIMPLY RELYING WITH REMAND REPORT OF THE ASSESSING OFFICER WITHOUT RECORDING ANY REASONS REGARDING CREDITWORTHINESS OF SO CALLED INVESTORS AND GENUINENESS OF RELATED TRANSACTIONS CANNOT BE THE GROUND FOR DE LETION OF THE ADDITION. THUS, THE LD. DR SUBMITTED THAT THE MATTER MAY BE REMANDE D BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER ADJUDICATION OF THE E VIDENCES. 7. WE HAVE HEARD LD. DR AND PERUSED THE MATERIAL AV AILABLE ON RECORD. AS REGARDS GROUND NO. 1, THE CIT(A) HAS GIVEN THE CATE GORICAL FINDING THAT THE ASSESSEE IS FOLLOWING ACCRUAL METHOD OF ACCOUNTING. THEREFORE, IT HAS NOT RECOGNIZED THE REVENUE DURING FINANCIAL YEAR 2011-1 2 AND NOT REPORTED THE SAID AMOUNT TO THE INCOME TAX, BUT THE ASSESSEE HAS OFFERED THIS INCOME IN ASSESSMENT YEAR 2013-14 AND THE ASSESSEE HAS FILED COPY OF CONFIRMATION OF ACCOUNT FROM THE PARTIES WHICH RECEIVED ON 4/6/2012 . THUS, NO PAYMENT WAS RECEIVED BY THE ASSESSEE IN THE YEAR 2011-12 AND ON LY THE TDS WAS DEDUCTED BY MS MEP ENGINEERING AND CONTRACTING COMPANY. THE REFORE, THE CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS. 17,34,797/-. T HERE IS NO NEED TO INTERFERE WITH THE ORDER OF THE CIT(A). THUS, GROUND NO. 1 I S DISMISSED. AS REGARDS ADMISSION OF THE ADDITIONAL EVIDENCES, THE CIT(A) I N PARA 5 HAS CATEGORICALLY GIVEN THE REASON AS TO WHY SAID ADDITIONAL EVIDENCE HAS TO BE ADMITTED. THERE IS NO NEED TO INTERFERE WITH THE FINDINGS OF THE CI T(A). THUS, GROUND NO. 2 IS DISMISSED. THE APPEAL OF THE REVENUE IS DISMISSED. 4 ITA NO. 1428/DEL/2017 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 05 TH DAY OF OCTOBER, 2021 SD/- SD/- (B. R. R. KUMAR) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 05/10/2021 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI