ACIT, New Delhi V. M/s. Ferro & Singh Industrial Co., New Delhi

ITA 1488/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7495 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARVINDER KAUR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI A.T. VARKEY : JUDICIAL MEMBER ITA NO. 1488/DEL/2013 A.Y. 2009-10 ACIT, CIRCLE 33(1), VS. FERRO & SINGH INDUSTRIAL CO ., NEW DELHI. 22, PUSA ROAD, NEW DELHI. PAN: AAAFF 1105 D ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SMT. PARVINDER KAUR SR. DR RESPONDENT BY : NONE DATE OF HEARING : 11-12-2014 DATE OF ORDER : _____-12-2014. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, PREFERRED BY THE DEPARTMENT, IS DIR ECTED AGAINST THE ORDER DATED 27-12--2012, PASSED BY THE CIT(APPEALS )-XXVI, NEW DELHI IN APPEAL NO. 274/2011-12 FOR A.Y. 2009-10. FOLLOWING GROUNDS ARE RAISED: 1. THE CIT(A) HAS ERRED IN RESTRICTING THE ADDITIO N TO RS. 19,791/- OUT OF TOTAL ADDITION OF RS. 1,01,962/- MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN INTER EST INCOME REFLECTED IN AIR AND IN RETURN OF THE ASSESSEE BY T AKING INTO ACCOUNT INTEREST INCOME DECLARED BY THE ASSESSEE IN A.Y. 2008- 09. 2. THE CIT(A) HAS ERRED IN DELETING THE ADDITION TO RS. 17,11,119/- MADE BY THE ASSESSING OFFICER BY DISALL OWING 5% 2 1488/DEL/2013 ACIT VS. M/S FERRO & SINGH INDUSTRIAL CO. OF PURCHASES DESPITE THE FACT THAT THE ASESSEE COUL D NOT PRODUCE BOOKS OF ACCOUNTS DURING THE ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS. 3. THE CIT(A) HAS ERRED IN RESTRICTING THE DISALLOW ANCE TO 10% INSTEAD OF 25% MADE BY THE ASSESSING OFFICER OU T OF TOTAL EXPENSES DESPITE THE FACTS THAT THE ASSESSEE COULD NOT PRODUCE BOOKS OF ACCOUNTS DURING THE ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS. 2. NONE PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE AT THE HEARING. WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE, QUA ASSE SSEE, ON MERITS AND IN THAT PROCESS WE HAVE HEARD LD. DR AND PERUSED THE ENTIRE MATERIAL PLACED ON RECORD. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 28,77,385/-. DURING T HE YEAR UNDER CONSIDERATION THE ASSESSEE FIRM WAS ENGAGED IN THE BUSINESS OF EXPORT OF AUTO-PARTS. THE AO OBSERVED THAT ON THE BASIS OF AI R INFORMATION IT WAS NOTICED THAT ASSESSEE HAD RECEIVED INTEREST OF RS. 88,239/- FROM SANTURIAN BANK OF PUNJAB AND RS. 5,82,524/- FROM HDFC BANK LT D. THE ASSESSEE ACCEPTED THAT IN ITS RETURN OF INCOME IT HAD DECLA RED ONLY RS. 5,68,801/-. THUS, THERE WAS DIFFERENCE OF RS. 1,01,962/-, WHICH HE ADDED TO ASSESSEES TOTAL INCOME. FURTHER, HE OBSERVED THAT ASSESSEE DI D NOT PRODUCE THE BOOKS OF 3 1488/DEL/2013 ACIT VS. M/S FERRO & SINGH INDUSTRIAL CO. ACCOUNT. THEREFORE, HE DISALLOWED 5% OF PURCHASES(R S. 3,42,22,387/-) I.E. RS. 17,11,119/- AND 25% OF EXPENSES (RS. 48,17,732/ -) I.E. RS. 12,04,433/-. 4. BEFORE LD. CIT(A), AS REGARDS THE DIFFERENCE OF RS. 1,01,962/-, IN INTEREST INCOME RETURNED BY ASSESSEE, THE ASSESSEE FILED A DETAILED RECONCILIATION STATEMENT WHICH HAS BEEN REPRODUCED AT PAGES 5 & 6 OF THE LD. CIT(A)S ORDER, WHICH IS REPRODUCED HEREUNDER: PARTICULARS AY 2007-08 AY 2008-09 AY 2009-10 AY 201 0-11 AY 2011-12 INTEREST AS PER P&L A/C 4,41,116.00 5,18,538.00 5,68,801.00 8,05,851.00 9,0 0,788.00 TDS ON FDR CLAIMED 44,975.00 53,410.00 68,846.00 79,837.00 99,475.00 INTEREST INCOME AS PER FORM 26 AS FIGURES NOT AVAILABLE ON NSDL SITE 4,36,367.00 6,70,763.00 7,98,374.00 6,12,502.00 TDS ON FDR AS PER FORM 26AS FIGURES NOT AVAILABLE ON NSDL SITE 44,946.00 68,846.00 79,837.00 61,250.00 5. LD. CIT(A) AFTER CONSIDERING THE RECONCILIATION STATEMENT OBSERVED AS UNDER: ON PERUSAL OF THE RECONCILIATION STATEMENT IT IS S EEN THAT THE APPELLANT HAD DECLARED INTEREST OF RS. 5,18,338/- F OR THE AY 2008-2009 AS COMPARED TO RS. 4,36,861/- AS PER FORM 26 AS. IT HAS BEEN CONTENDED THAT THE DIFFERENCE IN AIR INFOR MATION AND INTEREST AS PER P&L A/C WRITTEN SUBMISSIONS WAS ON ACCOUNT OF EXCESS INTEREST CREDITED BY IT IN THE AY 2008-2009 OF RS. 82,171/-. HOWEVER, ON PERUSAL OF THE RECONCILIATION STATEMENT IT IS SEEN THAT THE APPELLANT HAS DECLARED LESS INTERE ST IN AY 2009- 2010 AS COMPARED TO THE INTEREST REFLECTED IN FORM 26AS. THE INTEREST FOR TWO YEARS I.E. ASSESSMENT YEARS 2008-2 009 & 2009- 2010 ARE CLUBBED TOGETHER AND IT IS SEEN THAT THE A PPELLANT HAS DECLARED AN INTEREST INCOME OF RS. 10,87,339/- FOR THE TWO YEARS AS COMPARED TO INCOME OF RS. 11,07,130/- AS PER FOR M 26AS. 4 1488/DEL/2013 ACIT VS. M/S FERRO & SINGH INDUSTRIAL CO. THERE IS STILL SHORTFALL OF RS. 19,791/- IN THE INT EREST THAT SHOULD HAVE BEEN BROUGHT TO TAX. THEREFORE, THE DIFFERENCE OF CUMULATIVE INTEREST FOR THE TWO ASSESSMENT YEARS CO MPARED TO FORM 26 AS SHOULD HAVE BEEN ADDED TO THE INCOME OF THE APPELLANT. THEREFORE, THE APPELLANT GETS RELIEF OF RS. 82,171/- AND THE ASSESSING OFFICER IS DIRECTED TO RESTRICT T HE ADDITION OF INTEREST INCOME TO RS. 19,791/- AND PASS A CONSEQUE NTIAL ORDER ACCORDINGLY. 6. WE HAVE HEARD LD. DR AND PERUSED THE RECORD. LD . DR COULD NOT CONTROVERT THE FINDING OF LD. CIT(A) IN ANY RESPECT . WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDING OF LD. CIT(A) BECAUSE LD. CIT(A) HAS, AFTER CONSIDERING THE RECONCILIATION SUSTAINED THE ADDITION OF RS. 19,7991/-. GROUND IS DISMISSED. 7. AS REGARDS DISALLOWANCE BEING 5% ON ACCOUNT OF PURCHASE AND 25% OF TOTAL EXPENSES DEBITED TO P&L A/C THE ASSESSEE H AD TAKEN A GROUND BEFORE LD. CIT(A) THAT THOUGH BOOKS OF ACCOUNT WERE PRODUC ED BEFORE AO, HE DID NOT TAKE NOTE OF THE SAME. IT WAS FURTHER SUBMITTED THAT DETAILS OF ALL EXPENSES WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND COPIES WERE ATTACHED. THE ASSESSEE HAD ALSO FILED A COMPAR ATIVE CHART OF EXPENSES FOR THE PAST TWO YEARS TO DEMONSTRATE THAT THERE WA S NO VARIATION. 8. LD. CIT(A), AFTER CONSIDERING THE ASSESSEES SUB MISSIONS AND , INTER ALIA, TAKING NOTE OF THE FACT THAT BOOKS OF ACCOUN T OF ASSESSEE WERE AUDITED AND FURTHER TAKING NOTE OF THE FACT THAT THE TRADIN G RESULTS WERE BETTER FROM EARLIER YEARS, DELETED THE ADDITION ON ACCOUNT OF P URCHASES, INTER ALIA, OBSERVING THAT NO DISCREPANCY HAD BEEN POINTED OUT BY THE AO. 5 1488/DEL/2013 ACIT VS. M/S FERRO & SINGH INDUSTRIAL CO. 9. AS REGARDS THE DISALLOWANCE OF EXPENSES, LD. CIT (A) RESTRICTED THE DISALLOWANCE TO 10%. 10. WE HAVE HEARD LD. DR AND PERUSED THE RECORD. T HE AO HAS OBSERVED IN THE ASSESSMENT ORDER THAT VIDE NOTE SHEET ENTRY DATED 27-12-2011 HE HAD REQUIRED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOU NT ON 28-12-2011 AND ON THE SAME DATE HE HAS PASSED THE ORDER. THEREFORE, T HE GROUND BEFORE LD. CIT(A) REGARDING PRODUCTION OF BOOKS OF ACCOUNT BY ASSESSEE WERE RIGHTLY ACCEPTED BY LD. CIT(A). TAKING INTO CONSIDERATION T HE SPECIFIC GROUND TAKEN BEFORE LD. CIT(A) REGARDING PRODUCTION OF BOOKS OF A/C BEFORE THE AO, IN WHICH NO DISCREPANCY WAS POINTED OUT BY THE AO, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). 11. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 19-12-2014. SD/- SD/- ( A.T. VARKEY ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19-12-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 6 1488/DEL/2013 ACIT VS. M/S FERRO & SINGH INDUSTRIAL CO.