Smt. Veena Sood, Shimla V. ITO, Shimla

ITA 150/CHANDI/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2324 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-04-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 06-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Depreciation
• Section: 143(3); 194C; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.150 /CHD/2012 (ASSESSMENT YEAR: 2006-07) SMT.VEENA SOOD, VS. THE INCOME TAX OFFICER, PROP. M/S DIMPLE TRADERS, WARD 1 LOWER BAZAR, SHIMLA. SHIMLA. PAN: AKBPS8577P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VISHAL MOHAN RESPONDENT BY : SHRI N.K. SAINI DR DATE OF HEARING : 16.04.2013 DATE OF PRONOUNCEMENT : 29.04.2013 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (A), SHIMLA DATED 21.11. 2011 RELATING TO ASSESSMENT YEAR 2006-07, AGAINST THE ORDER PASSED U /S 143(3) OF INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD.CIT(A) IS NOT JUSTIFIED IN UPHOLDING AN ADDITION OF RS.157952/- ON ACCOUNT OF ALLEGED DIFFERENCE IN THE INCOME SHOWN BY THE ASSESSEE AND THAT AS SHOWN IN THE TDS CERTIFICATE ISSUED BY TATA TELE SERVICES LTD. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) IS NOT JUSTIFIED IN UPHOLDING AN ADDITION OF RS.234130/- ON ACCOUNT OF ALLEGED PURCHASES NOT TO HAVE BEEN ENTERED IN THE BOOKS OF ACCOUNT UNDER SECTION 69 OF THE INCOME TAX ACT, 1961. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) IS NOT JUSTIFIED IN UPHOLDING AN ADDITION OF RS.47411/- ON ACCOUNT OF CREDIT NOTES GIVEN BY M/S DRIVE INDIA. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) IS NOT JUSTIFIED IN UPHOLDING AN ADDITION MADE BY THE LD.A.O. ON ACCOUNT OF ALLEGED EXCESSIVE DEPRECIATION VIZ A VIZ MAZDA TRUCK. 2 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS.23996/- ON ACCOUNT OF ALLEGED PERSONAL USER VIZ A VIZ TELEPHONE EXPENSES, CAR INSURANCE, CAR DEPRECIATION AND VEHICLE RUNNING EXPENSES. 4. THE ISSUE IN GROUND NO.1 IS AGAINST ADDITION OF RS.1,57,952. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSE SSEE DURING THE YEAR UNDER CONSIDERATION HAD DECLARED INCOME FROM TATA ( SALES PROMOTION ACCOUNT) AT RS.5,00,679/-. HOWEVER, TDS CERTIFICAT E ANNEXED WITH THE RETURN OF INCOME REFLECTED TOTAL PAYMENTS AT RS.6,5 8,631/- I.E. RS.5,45,181/- UNDER SECTION 194H AND RS.1,13,450/- UNDER SECTION 194C OF THE ACT. THE ASSESSEE WAS SHOW CAUSED TO RECONC ILE THE DIFFERENCE BETWEEN THE TWO. THE REPLY OF THE ASSESSEE IS INCO RPORATED UNDER PARA 3 AT PAGES 2 AND 3 OF THE ASSESSMENT ORDER. THE CLAI M OF THE ASSESSEE WAS THAT SUM OF RS.5,00,679/- WAS RECEIVED BY THE ASSES SEE AND THE SAME WAS SHOWN IN THE RETURN OF INCOME. THE ASSESSING OFFIC ER FURTHER ASKED THE ASSESSEE AS TO HOW THE CREDIT OF TOTAL TAX DEDUCTED AT SOURCE HAD BEEN CLAIMED BY THE ASSESSEE. THE ASSESSEE WAS UNABLE T O RECONCILE THE DIFFERENCE AND THE DIFFERENCE OF RS.1,57,952/- WAS ADDED AS INCOME OF THE ASSESSEE. 5. THE CIT (APPEALS) UPHELD THE ORDER OF THE ASSESS ING OFFICER. THE ASSESSEE IS IN APPEAL AGAINST THE SAME. SHRI VISHA L MOHAN APPEARED ON BEHALF OF THE ASSESSEE AND SHRI N.K. SAINI PUT IN A PPEARANCE FOR THE REVENUE AND PUT FORWARD THEIR CONTENTIONS. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. AS PER THE PRE-AMENDED PROVISIONS OF SECTION 199 OF TH E ACT FOR THE RELEVANT ASSESSMENT YEAR, WHERE THE ASSESSEE HAS CLAIMED THE CREDIT OF TAX DEDUCTED AT SOURCE, THE INCOME CORRESPONDING TO SUC H TAX DEDUCTED AT SOURCE IS TO BE INCLUDED IN THE HANDS OF THE ASSESS EE. ADMITTEDLY, THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNT ING AND THE AMOUNTS WHICH HAD ACCRUED TO THE ASSESSEE EVEN WHEN NOT REC EIVED HAD TO BE ACCOUNTED FOR BY THE ASSESSEE IN HIS BOOKS OF ACCOU NT. HOWEVER, IN THE 3 FACTS OF THE PRESENT CASE THE TOTAL PAYMENT OF RS.6 ,58,631/- WAS PAID/CREDITED TO THE ACCOUNT OF THE ASSESSEE BY PRI NCIPAL, ON WHICH TAX WAS DEDUCTED AT SOURCE AND TDS CERTIFICATE WAS ISSU ED, WHICH WAS ATTACHED BY THE ASSESSEE ALONGWITH RETURN OF INCOME . THE ASSESSEE HAD CLAIMED THE CREDIT OF THE TOTAL TDS DEDUCTED OUT OF THE ACCOUNT OF THE ASSESSEE BUT HAD REFLECTED ONLY SUM OF RS.5,00,679/ - IN THE PROFIT & LOSS ACCOUNT AS THE AMOUNT RECEIVED BY THE ASSESSEE. TH E AMOUNT ACCRUING TO THE ASSESSEE ON WHICH TAX WAS DEDUCTED AT SOURCE WA S NOT ACCOUNTED FOR BY THE ASSESSEE. IN VIEW OF THE PROVISIONS OF SECT ION 199 OF THE ACT AND ALSO BECAUSE OF THE SYSTEM OF ACCOUNTING BEING FOLL OWED BY THE ASSESSEE, THE BALANCE RECEIPT OF RS.1,57,952/- ARE INCLUDIBLE IN THE HANDS OF THE ASSESSEE IRRESPECTIVE OF THE FACT THAT THE SAID AMO UNT HAD NOT BEEN RECEIVED BY THE ASSESSEE, BUT THE SAME ACCRUED TO T HE ASSESSEE AS TAX HAS BEEN DEDUCTED OUT OF SUCH PAYMENTS. WE ARE IN CONF ORMITY WITH THE ORDERS OF THE AUTHORITIES BELOW IN MAKING ADDITION OF RS.1,57,952/- AND THUS GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSE D. 7. THE ISSUE IN GROUND NO.2 RAISED BY THE ASSESSEE IS AGAINST THE ADDITION OF RS.2,34,130/- ON ACCOUNT OF ALLEGED PUR CHASES. THE GROUND NO.3 RAISED BY THE ASSESSEE IS AGAINST THE ADDITION OF RS.47,411/- ON ACCOUNT OF CREDIT NOTES. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS THE ASSESSING OFFICER REQUISITIONED SOME OF THE CRE DITORS TO FILE COPIES OF ACCOUNT, WHICH WERE COMPARED WITH THE BOOKS OF A CCOUNT OF THE ASSESSEE. IN THE CASE OF M/S DRIVE INDIA ENTERPRIS ES SOLUTIONS LTD., THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD NOT A CCOUNTED FOR THREE PURCHASE BILLS TOTALING RS.2,34,130/-. THE ASSESSE E WAS ASKED TO FILE RECONCILIATION STATEMENT AND IN REPLY IT WAS CONTEN DED BY THE ASSESSEE THAT THE SAID BILLS HAD NEVER BEEN RECEIVED BY THE ASSESSEE AND THE EXPLANATION IN THIS REGARD SHOULD BE SOUGHT FROM TA TA TELLY SERVICES/M/S DRIVE INDIA ENTERPRISES SOLUTIONS LTD. FURTHER OPP ORTUNITY WAS GIVEN TO THE ASSESSEE TO RECONCILE DISCREPANCIES. HOWEVER, THE ASSESSEE FAILED TO RECONCILE/FILE ANY EVIDENCE. IN THE ABSENCE OF ANY EVIDENCE AVAILABLE OF 4 PURCHASE BILLS TOTALING RS.2,34,130/-, THE SAME WAS ADDED AS INCOME OF THE ASSESSEE. 8. ANOTHER ADDITION WAS MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF CREDIT NOTES NOT ACCOUNTED FOR TOTALING RS.47,411/- RECEIVED FROM M/S DRIVE INDIA ENTERPRISES SOLUTIONS LTD. THE ASSESSE E WAS NOT ABLE TO RECONCILE THE DIFFERENCES AND THE VALUE OF THE CRED IT NOTES TOTALING RS.47,411/- WAS ADDED AS INCOME OF THE ASSESSEE. T HE CIT (APPEALS) CONFIRMED BOTH THE ADDITIONS OF RS.2,34,130/- AND R S.47,411/-. 9. THE ASSESSEE IS IN APPEAL AGAINST BOTH THE ADDIT IONS AND HAD RAISED THE ISSUE VIDE GROUND OF APPEAL NOS.2 AND 3. THE L EARNED A.R. FOR THE ASSESSEE DREW OUR ATTENTION TO THE LEDGER ACCOUNT O F M/S DRIVE INDIA ENTERPRISES SOLUTIONS LTD. IN THE BOOKS OF SOLE PRO PRIETARY CONCERN OF THE ASSESSEE M/S DIMPLE TRADERS PLACED AT PAGES 24 TO 29 OF THE PAPER BOOK AND POINTED OUT THAT NO SUCH PURCHASES OR CRED IT NOTES WERE ACCOUNTED FOR BY THE ASSESSEE AS THE SAID PURCHASES WERE NOT MADE BY THE ASSESSEE. THE LEARNED A.R. FOR THE ASSESSEE STRESS ED THAT NO ADDITION ON THIS ACCOUNT WAS WARRANTED IN THE HANDS OF THE ASSE SSEE. 10. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANC E ON THE ORDERS OF THE AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE IS A DEALER OF THE PRODUCTS OF TATA TELLY SERVICES THROUGH M/S DRIVE INDIA ENTERPRISES SOLUTIONS LTD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER COMPARED THE COPY OF ACCOUNT OF M/S DRIVE INDIA ENTERPRISES SOLUTIONS LTD. IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WITH THE COPY OF ACCOUNT OF THE ASSESSEE I N THE BOOKS OF M/S DRIVE INDIA ENTERPRISES SOLUTIONS LTD. AND FOUND TH REE PURCHASE BILLS WERE NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF T HE ASSESSEE THOUGH SHOWN IN THE BOOKS OF ACCOUNT OF M/S DRIVE INDIA EN TERPRISES SOLUTIONS LTD. THE DETAILS OF THE THREE BILLS TOTALING RS.2, 34,130/- ARE AS UNDER: 5 DATE VCH.TYPE AMOUNT 24.11.2005(PRE PAID) 150 RS.1,11,199.92 09.01.2006(PRE PAID) 179 RS. 21,530.08 10.02.2006(PRE PAID) 90033593 RS.1,01,400.00 TOTAL: RS.2,34,130.00 12. THE EXPLANATION OF THE ASSESSEE WAS THAT IT HAD NOT MADE ABOVE SAID PURCHASES AND HENCE NOT REFLECTED IN ITS BOOKS OF ACCOUNT. THE SECOND PLEA OF THE ASSESSEE WAS THAT ALL THE PURCHA SES MADE FROM M/S DRIVE INDIA ENTERPRISES SOLUTIONS LTD. WERE PAID BY WAY OF ACCOUNT PAYEE CHEQUES AND CREDIT OF ACCOUNT OF THE PARTIES REFLECT THE SAME. THE ONUS CAST UPON THE ASSESSEE TO RECONCILE THE DIFFER ENCE OF RS.2,34,130/- HAS NOT BEEN DISCHARGED BY THE ASSESSEE. WE FIND N O MERIT IN THE CLAIM OF THE ASSESSEE THAT IT HAD NOT MADE THE ABOVE SAID PURCHASES AND EVEN ARBITRATION PROCEEDINGS IN THE CASE HAVE BEEN DECID ED AGAINST THE ASSESSEE WHICH THOUGH ARE CONTESTED BEFORE THE COUR T OF LAW. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE UPHOLD THE ADDITION OF RS.2,34,130/-. FURTHER ANOTHER ADDITION OF RS.4 7,411/- HAS BEEN MADE ON ACCOUNT OF CREDIT NOTES ISSUED BY M/S DRIVE INDI A ENTERPRISES SOLUTIONS LTD. WHICH HAVE NOT BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. WE DIRECT THE ASSESSING O FFICER TO SET OFF THE SAID CREDIT NOTES OF RS.47,411/- AGAINST ADDITION O F RS.2,34,130/- AND THE BALANCE ADDITION OF RS.1,86,719/- IS CONFIRMED. TH E GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS DISMISSED AND GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS ALLOWED. 13. THE GROUND OF APPEAL NO.4 RAISED BY THE ASSESSE E IS NOT PRESSED AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. 14. THE GROUND OF APPEAL NO.5 RAISED BY THE ASSESSE E IS AGAINST THE DISALLOWANCE ON ACCOUNT OF PERSONAL USE OF TELEPHON E EXPENSES, CAR INSURANCE, CAR DEPRECIATION AND VEHICLE RUNNING EXP ENSES AT 1/6 TH OF THE TOTAL EXPENSES. IN THE TOTALITY OF THE FACTS AND C IRCUMSTANCES OF THE CASE 6 WE DIRECT THE ASSESSING OFFICER TO DISALLOW 1/10 TH OF THE TOTAL EXPENSES UNDER THE ABOVE SAID HEADS. THE GROUND OF APPEAL N O.5 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF APRIL, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 29 TH APRIL, 2013 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH