Smt, Suman Mahajan, New Delhi V. Addl. CIT, New Delhi

ITA 156/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65457 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 06-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 11-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR PRABHA KANT
• Keywords: Additional evidence

Judgement Text

ITA NO. 156/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 156/DEL/2011 A.Y. : 2007-08 SMT. SUMAN MAHAJAN, PROP. M/S GLOBAL OVERSEAS, 10872, JHANDEWALAN ROAD, NABI KARIM, NEW DELHI 110 055 (PAN: AAZPM9901F) VS. ADDITIONAL C.I.T., RANGE NO. 39, NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. K. SAMPATH, ADVOCATE DEPARTMENT BY : DR. PRABHA KANT, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXVIII, NEW DELHI DATED 15.9.2010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- I) WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (A) WAS JUSTIFIED IN CONFIRMING THE ADDITION OF ` 678339/- ON ACCOUNT OF DEPB LICENSES. II) WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (A) WAS ITA NO. 156/DEL/2011 2 JUSTIFIED IN CONFIRMING THE ADDITION OF ` 25119/- ON ACCOUNT OF OFFICE EXPENSES. III) WHETHER THE ASSESSEE CRAVES, LEAVE TO ORDER, ADD, AMEND OR DELETE ANYTHING IN THE AFORESAID GROUNDS OF APPEAL. IV) ANY OTHER GROUND OF APPEAL TO BE ADDED AT THE TIME OF HEARING. 3. APROPOS ISSUE OF ADDITION ON ACCOUNT OF DEPB LIC ENSES IN THIS CASE ASSESSING OFFICER NOTED THAT DURING THE YEAR ASSESSEE HAD MADE PURCHASE FROM M/S SHIKHAR ENTERPRIS ES APART FROM OTHER PARTIES. AS PER THE COPY OF ACCOUNT OF THE ASSESSEE WITH THIS CONCERN, THE ASSESSEE HAS PURCHASED FROM THIS FIRM ON 26.3.2007 AT ` 5,69,796/- AND ON 28.3.2007 AT ` 1,08,543/-. ASSES SEE WAS ASKED TO GIVE THE EXPLANATION IN THIS REGARD. ASSESSEE COULD NOT PROVIDE THE SATISFACTORY EXPLANATION IN THIS REGARD. HENCE, A SSESSING OFFICER ADDED THE SAME OF ` 6,78,339/- TO THE INCOME OF TH E ASSESSEE. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) ASS ESSEE SUBMITTED VARIOUS DETAILS AND DOCUMENTS. ASSESSEE F ILED ADDITIONAL EVIDENCES. HOWEVER, LD. COMMISSIONER OF INCOME TAX (A) DID NOT ADMIT THE ADDITIONAL EVIDENCES. ON MERITS ALSO HE H ELD THAT THE ASSESSEE HAS NOT EXPLAINED WHY THIS AMOUNT DOES NOT FORM PART OF THE CLOSING STOCK. HENCE, LD. COMMISSIONER OF INCOME TA X (A) CONFIRMED THE ASSESSING OFFICERS ACTION. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. ITA NO. 156/DEL/2011 3 6. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE AS SESSEE HAS SUBMITTED ALL THE RELEVANT DETAILS BEFORE THE LD. C OMMISSIONER OF INCOME TAX (A) AND ASSESSEE HAS PLEADED THAT ADDITI ONAL DOCUMENTS MAY BE ACCEPTED BY THE LD. COMMISSIONER OF INCOME TAX (A). HOWEVER, LD. COMMISSIONER OF INCOME TAX (A) DID NOT GIVE THE ASSESSEE ANY OPPORTUNITY AND REJECTED THE ADDITIONA L EVIDENCES. HENCE, HE PLEADED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (A) TO CONSIDER THE A DDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE. 6.1 LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND PLEADED THA T THE ADDITION MAY BE SUSTAINED. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORDS. WE FIND THAT ASSESSEE HAS SUBMITTED THE ADDITIONAL EVIDENCES. IT WAS NOT ADMITTED BY THE LD. COMMISSION ER OF INCOME TAX (A). IN OUR CONSIDERED OPINION, THESE DOCUMENTS S HOULD HAVE BEEN CONSIDERED BY THE LD. COMMISSIONER OF INCOME TAX (A). HOWEVER, LD. COMMISSIONER OF INCOME TAX (A) HAS FAILED TO DO SO. IN OUR CONSIDERED OPINION, INTEREST OF JUSTICE WILL BE SER VED IF THE MATTER IS REMITTED TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (A) TO CONSIDER THE ISSUE AFRESH BY REFERENCE TO THE ADDI TIONAL EVIDENCE FILED BY THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 8. APROPOS ISSUE OF ADDITION ON ACCOUNT OF OFFICE E XPENSES ON THIS ISSUE ASSESSING OFFICER NOTED THAT ASSESS EE HAS DEBITED THE P&L ACCOUNT AT ` 3,26,307/- UNDER THE HEAD OFF ICE EXPENSES. THESE INCLUDE PAYMENT TO M/S G4S SECURITIES SERVICES INDIA PVT. LTD. FOR THE FIRST THREE MONTHS AT ` 74,187/- AND FOR NEX T TEN MONTHS @ ` ITA NO. 156/DEL/2011 4 25,119/- PER MONTH. ASSESSING OFFICER HELD THAT SI NCE THE PAYMENT TO THIS COMPANY DURING THE YEAR SHOULD BE FOR TWELVE MO NTHS ONLY, A SUM OF ` 25,119/- WOULD BE DISALLOWED AND ADDED IN THE INCOME OF THE ASSESSEE. 9. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) CONFIRMED THIS ADDITION. 10. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APP EAL BEFORE US. 11. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE E NTIRE EXPENDITURE SHOULD BE ALLOWED IN THE HANDS OF THE A SSESSEE AS EXPENDITURE WAS GENUINE AND NOT BOGUS. HE FURTHER RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE C ASE OF C.I.T. VS. M/S VISHNU INDUSTRIAL GASES P LTD. VIDE ORDER DATED 6.5. 2008. 11.1 LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND SUBMITTED THAT MIXED SYSTEM OF ACCOUNTING IS NOT ALLOWABLE AS P ER THE PRESENT INCOME TAX ACT. HE SUBMITTED THAT THE CASE LAW REL IED UPON BY THE ASSESSEE IS OF THE PERIOD WHEN MIXED SYSTEM OF ACCOU NTING PERMITTED BY THE INCOME TAX ACT. HE CLAIMED THAT ONLY 12 MON THS EXPENDITURE SHOULD BE ALLOWED AS THE SAME PERTAIN TO THE CURRENT YEAR AND HE CLAIMED A SUM OF ` 25,119/- SHOULD BE DISALLOWED. 12. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND CONSIDERABLE COGENCY IN THE SUB MISSIONS OF THE LD. DEPARTMENTAL REPRESENTATIVE. IT IS A SETTLED LAW T HAT IN THE PRESENT SCHEME OF INCOME TAX ACT THE BOOKS OF ACCOUNTS HAS T O BE MAINTAINED EITHER ON CASH OR ON MERCANTILE SYSTEM. HYBRID SYS TEM IS NOT PERMISSIBLE. UNDER THE CIRCUMSTANCES, WE FIND CO NSIDERABLE COGENCY IN THE ACTION OF THE REVENUE AUTHORITIES BE LOW, WHEREIN IT WAS ITA NO. 156/DEL/2011 5 HELD THAT ONLY 12 MONTHS EXPENDITURE SHOULD BE DI SALLOWED IN THE CURRENT ASSESSMENT YEAR. ACCORDINGLY, WE UPHOLD THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/9/2012. SD/- SD/- [ [[ [I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 14/9/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES