Xerox India Ltd., New Delhi V. DCIT, New Delhi

ITA 1580/DEL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69484 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 04-11-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 09-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Revised return; Ignorance of law
• Section: 43B; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH H HH H : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .1580/DEL/2010 1580/DEL/2010 1580/DEL/2010 1580/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004- -- -05 0505 05 M/S XEROX INDIA LIMITED, M/S XEROX INDIA LIMITED, M/S XEROX INDIA LIMITED, M/S XEROX INDIA LIMITED, 5 55 5 TH THTH TH AND 6 AND 6 AND 6 AND 6 TH THTH TH FLOOR, FLOOR, FLOOR, FLOOR, VATIKA B VATIKA B VATIKA B VATIKA BUSINESS PARK, USINESS PARK, USINESS PARK, USINESS PARK, BLOCK BLOCK BLOCK BLOCK- -- -I, SECTOR I, SECTOR I, SECTOR I, SECTOR- -- -49, 49, 49, 49, SOHNA ROAD, SOHNA ROAD, SOHNA ROAD, SOHNA ROAD, GURGAON GURGAON GURGAON GURGAON 122 018, 122 018, 122 018, 122 018, HARYANA. HARYANA. HARYANA. HARYANA. PAN : AAACM8634R. PAN : AAACM8634R. PAN : AAACM8634R. PAN : AAACM8634R. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -20, 20, 20, 20, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY WADHWA, CA. RESPONDENT BY : SHRI SAMEER SHARMA, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-I, NEW DELHI DATED 12 TH FEBRUARY, 2010 FOR THE AY 2004- 05. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE ORDER DATED 12.02.2010 PASSED BY THE LD.CIT(A )- 1, NEW DELHI IS BAD IN LAW AND ON FACTS. 2. (I). THAT THE LD.CIT(A) HAS ERRED IN LAW AND O N FACTS IN DENYING ADDITIONAL CLAIMS ON THE GROUND THAT CLAI MS WERE NOT MADE BY WAY OF FILING THE REVISED RETURN UN DER SECTION 139(5) OF THE INCOME-TAX ACT, 1961. THE ASSE SSEE DID NEITHER CLAIM THOSE ADDITIONAL CLAIMS IN THE ORIGINAL/REVISED RETURN NOR CLAIMED BEFORE ASSESSING ITA-1580/DEL/2010 2 OFFICER BUT WERE CLAIMED FIRST TIME BEFORE THE LD.CI T(A). THOSE CLAIMS WERE A) INADVERTENT DISALLOWANCE TAKEN IN THE RETURN OF INCOME UNDER THE MISTAKEN BELIEF THAT FREIGHT EXPENSE S OF RS.1,62,25,506/- WERE DEBITED TO THE PROFIT & LOSS A/C , WHEREAS SAID FREIGHT EXPENSES WERE NOT AT ALL DEBITED T O THE PROFIT & LOSS A/C OF THAT YEAR; AND B) ANOTHER FREIGHT EXPENSES OF RS.35,83,542/- WHICH WAS DEBITED TO THE PRIOR PERIOD EXPENSES A/C(PPE) ( WHICH IS SHOWN BELOW-THE-LINE IN P&L A/C), WHEREAS WHILE REVERSING THE SAID EXPENSES CREDIT WAS GIVEN TO THE FREIGHT PAID A/C (WHICH IS SHOWN ABOVE-THE-LINE IN THE P&L A/C) INSTEAD OF PRIOR PERIOD EXPENSES A/C. SUCH BOO KING OF EXPENSE BELOW-THE-LINE AND REVERSAL THEREOF ABOVE- THE- LINE RESULTED IN OFFERING HIGHER INCOME FOR TAXATIO N TO THE EXTENT OF RS.35,83,542/-. (II). THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DENYING THE AFORESAID ADDITIONAL CLAIMS REGARDING FREIGHT EXPENSES AND PRIOR PERIOD EXPENSES IN SPITE OF THE FACT THAT ON MERITS, IN REMAND PROCEEDINGS, THE ALLOWABILITY OF THE SAID CLAIMS HAD BEEN GONE INTO IN DETAIL AND THE LEAR NED ASSESSING OFFICER WAS OF THE VIEW THAT THE CLAIMS MADE BY THE APPELLANT WERE OTHERWISE FACTUALLY CORRECT. 3. I. THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FAC TS IN REJECTING THE CLAIM OF DEDUCTION U/S 43B OF THE I NCOME- TAX ACT, 1961 AMOUNTING TO RS.2,96,52,486/- MADE BY FILING, WITH THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A LETTER DATED 21.12.2006 ON THE GROUND THAT THE LETTER WAS FILED BEYOND THE PERIOD O F FILING THE REVISED RETURN U/S 139(5) OF THE ACT. II. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REJECTING THE ADDITIONAL CLAIM OF DEDUCTION UNDE R SECTION 43B OF THE ACT IN SPITE OF THE FACT THAT ON MERITS TH E ALLOWABILITY OF THE SAID CLAIM HAD BEEN GONE INTO IN DETAIL AND AMPLE EVIDENCES WERE PRODUCED BEFORE THE LEARNED ASSESSING OFFICER TO SUBSTANTIATE THE ALLOWANCE. 4. THAT THE LD.CIT(A) HAS ERRED IN LAW AND FACTS IN REJECTING THE ABOVE CLAIMS IN RESPECT OF FREIGHT EXPE NSES, PRIOR PERIOD EXPENSES AND DEDUCTION UNDER SECTION 43 B BY SUMMARILY IGNORING THE JUDGEMENTS OF APEX COURT, HIGH ITA-1580/DEL/2010 3 COURTS AND TRIBUNALS AND BOARDS CIRCULARS DATED 11.04.1955 WHEREIN IT HAS BEEN CLEARLY HELD THAT ON LY LEGITIMATE TAX DUE FROM THE ASSESSEE SHOULD BE COLLECTED AND THE ASSESSEE SHOULD NOT BE PENALIZED BECAUSE OF ERRORS/OMISSIONS OR IGNORANCE OF LAW. 5. THE APPELLANT CRAVES LEAVE TO ADD, MODIFY OR AMEN D ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. AT THE TIME OF HEARING BEFORE US, IT IS STATED BY THE LEARNED COUNSEL THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE REQUESTED FOR ALLOWABILITY OF ADDITIONAL CLAIMS OF EXPENDITURE AMOUNTING TO ` 2,96,52,486/-. THE SAME WAS NOT ENTERTAINED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS NOT FI LED THE REVISED RETURN CLAIMING SUCH ADDITIONAL EXPENDITURE W ITHIN THE TIME LIMIT PERMITTED UNDER SECTION 139(5). THAT ON APPE AL, LEARNED CIT(A) CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER A ND, AFTER CONSIDERING THE SAME, HE, RELYING UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT [2 006] 284 ITR 323 (SC), HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN RE JECTING THE APPELLANTS CLAIM REGARDING ALLOWABILITY OF EXPENDIT URE CLAIMED DURING THE ASSESSMENT PROCEEDINGS WITHOUT FILING THE REVISED RET URN. HE SUBMITTED THAT NOW THIS ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE BY A CATENA OF DECISIONS OF HON'BLE JURISDICTIONAL HIGH COU RT. IN THIS REGARD, HE RELIED UPON THE FOLLOWING DECISIONS:- (I) CIT VS. JAI PARABOLIC SPRINGS LTD. [2008] 306 ITR 4 2 (DELHI). (II) CIT VS. NATRAJ STATIONERY PRODUCTS P. LTD. [2009] 312 ITR 22 (DELHI). (III) CIT VS. ROSE SERVICES APARTMENT INDIA P.LTD. [2010] 326 ITR 100 (DELHI). (IV) CIT VS. JINDAL SAW PIPES LTD. [2010] 328 ITR 338 (D ELHI). ITA-1580/DEL/2010 4 (V) CIT VS. SAM GLOBAL SECURITIES LTD. [2013] 38 TAXMANN.COM 129 (DELHI). THE LEARNED COUNSEL STATED THAT NOW THE MATTER IS BEF ORE THE ITAT AND IT IS SETTLED LAW THAT THE JURISDICTION OF TH E ITAT IS VERY WIDE AND THE ITAT CAN PERMIT THE ASSESSEE TO RAISE ANY GROUND FACTUAL OR LEGAL PROVIDED THE FACTS RELATING TO THAT GROUND ARE ON THE RECORD OF THE LOWER AUTHORITIES. HE SUBMITTED THAT THERE IS NO DISPU TE THAT ALL THE FACTS RELATING TO ADDITIONAL CLAIM OF EXPENDITURE MA DE BY THE ASSESSEE ARE ALREADY ON RECORD. HE ALSO POINTED OUT THAT PAR T OF THE CLAIM IS WITH REGARD TO ALLOWABILITY OF SECTION 43B WHICH WA S DISALLOWED IN THE EARLIER YEAR WHEN THE PAYMENT WAS NOT MADE. THAT AS PER THE EXPRESS PROVISIONS OF SECTION 43B, THE DEDUCTION IS ALLOWABLE IN THE YEAR IN WHICH PAYMENT IS MADE. THAT THE ASSESSEE MADE THE PAYM ENT DURING THE ACCOUNTING YEAR RELEVANT TO ASSESSMENT YEAR UNDER C ONSIDERATION AND, THEREFORE, IT WAS INCUMBENT UPON THE ASSESSING OFFI CER TO ALLOW THE DEDUCTION IRRESPECTIVE OF THE CLAIM BEING MADE B Y THE ASSESSEE. HE, THEREFORE, SUBMITTED THAT THE ENTIRE ADDITIONAL CLAIM FOR EXPENDITURE MADE BEFORE THE ASSESSING OFFICER SHOULD BE DIRECTED TO BE ALLOWED. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE DECI SION OF HONBLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD . (SUPRA). HOWEVER, HE ALTERNATIVELY SUBMITTED THAT IF AT ALL T HE ITAT DEEMS IT PROPER TO ENTERTAIN THE ASSESSEES CLAIM, THE MATTER SHO ULD BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE TH E ASSESSEES CLAIM ON MERITS BECAUSE NEITHER THE ASSESSING OFFICER NOR THE CIT(A) HAS EXAMINED THE ALLOWABILITY OF ASSESSEES CLAIM ON MERI TS. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE SIDES AND PERUSE D THE MATERIAL PLACED BEFORE US. AFTER CONSIDERING THE ARGUMENTS OF BOTH ITA-1580/DEL/2010 5 THE SIDES AND THE FACTS OF THE CASE, WE ARE OF THE OPIN ION THAT THE ISSUE IS NOW SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT. THAT IN THE CASE OF SAM GLOBAL SECURITIES LTD. (SUPRA), THE FACTS WERE THAT IN THE R ETURN OF INCOME, THE ASSESSEE HAD NOT CLAIMED EXEMPTION UNDER SECTION 10(35) ON THE DIVIDEND INCOME FROM THE MUTUAL FUNDS AND THE LOSS O N SALE OF UNITS AS BUSINESS LOSS. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED THE REVISED COMPUTATION OF INCOME CLAIMING EXEMPTION AS WELL AS BUSINESS LOSS. HOWEVER, THE ASSESSING OFFICER AS WELL AS CIT(A) REJ ECTED THE ASSESSEES CLAIM ON THE GROUND THAT THE ASSESSEE HAD NOT CLA IMED IT BY FILING OF REVISED RETURN UNDER SECTION 139(5) WITHIN THE TIME LIMIT. THE ASSESSING OFFICER AS WELL AS CIT(A) BOTH RELIED UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD . VS. CIT [2006] 284 ITR 323. ON FURTHER APPEAL, THE ITAT ACCEPTED THE ASSESSEES CLAIM AND REMANDED THE MATTER TO THE ASSESSING OFFICER TO CONSIDER THE ASSESSEES CLAIM ON MERITS. THE ITAT ALSO HELD THAT A N OFFICER MUST NOT TAKEN ADVANTAGE OF IGNORANCE OF THE ASSESSEE. THAT THE REVENUE, AGGRIEVED WITH THE ORDER OF THE ITAT, WAS IN APPEAL BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT. THAT THE HON'BLE JURISDIC TIONAL HIGH COURT UPHELD THE ORDER OF THE ITAT AND THE APPEAL OF THE REVENUE WAS DISMISSED FOLLOWING ITS OWN EARLIER ORDERS. THAT THE RE LEVANT PORTION OF JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IS REPR ODUCED BELOW FOR READY REFERENCE:- 8. DECISION IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA ) WAS DISTINGUISHED IN JAI PARABOLIC SPRINGS LTD. (SUPRA) IN THE FOLLOWING WORDS:- IN GOETZE (INDIA) LTD. V. CIT [2006] 284 ITR 323 ( SC) WHEREIN DEDUCTION CLAIMED BY WAY OF A LETTER BEFORE THE ASSESSING OFFICER, WAS DISALLOWED ON THE GROUND THAT THER E WAS NO PROVISION UNDER THE ACT TO MAKE AMENDMENT IN T HE RETURN WITHOUT FILING A REVISED RETURN. APPEAL TO T HE SUPREME COURT, AS THE DECISION WAS UPHELD BY THE TRIB UNAL ITA-1580/DEL/2010 6 AND THE HIGH COURT, WAS DISMISSED MAKING CLEAR THAT THE DECISION WAS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY TO ENTERTAIN CLAIM FOR DEDUCTION OTHERWISE THAN BY A REVISED RETURN, AND DID NOT IMPINGE ON THE POWE R OF THE TRIBUNAL. 9. IN CIT V. NATRAJ STATIONERY PRODUCTS (P) LTD. [20 09] 312 ITR 22/177 TAXMAN 168 (DELHI) RELIANCE PLACED O N GOETZE (INDIA) LTD. (SUPRA) BY THE REVENUE WAS REJECT ED, AS THE ASSESSEE HAD NOT MADE ANY NEW CLAIM BUT HAD ASKED FOR RE-COMPUTATION OF DEDUCTION UNDER SECTION 80-IB . THE SAID DECISION MAY NOT BE SQUARELY APPLICABLE BUT THE COURTS HAVE TAKEN A PRAGMATIC VIEW AND NOT THE TECHN ICAL VIEW AS WHAT IS REQUIRED TO BE DETERMINED IS THE TAXAB LE INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE LAW. IN THIS SENSE, ASSESSMENT PROCEEDINGS ARE NOT ADVERSARIAL IN NATURE. 10. IN CIT V. ROSE SERVICES APARTMENT INDIA (P) LTD. [2010] 326 ITR 100 (DELHI) RELYING UPON THE DECISION OF THE SUPREME COURT IN NATIONAL THERMAL POWER CO. LTD. (SU PRA), A DIVISION BENCH OF THIS COURT REJECTED THE PLEA OF T HE REVENUE THAT THE TRIBUNAL COULD NOT HAVE ENTERTAINE D THE PLEA, HOLDING THAT THE TRIBUNAL WAS EMPOWERED TO DEA L WITH THE ISSUE AND WAS ENTITLED TO DETERMINE THE CLAIM OF L OSS, IF AT ALL, UNDER ONE SECTION/PROVISION OR THE OTHER. 11. DECISION IN GOETZE (INDIA) LTD. (SUPRA) WAS AGAIN RELIED UPON BY THE REVENUE IN CIT V. JINDAL SAW PIP ES LTD. [2010] 328 ITR 338 (DELHI) BUT THE CONTENTION WAS NO T ACCEPTED, OBSERVING THAT THE TRIBUNALS JURISDICTION I S COMPREHENSIVE AND ASSIMILATES ISSUES IN THE APPEAL FROM THE ORDER OF THE CIT (APPEALS) AND THE TRIBUNAL HAS T HE DISCRETION TO ALLOW A NEW GROUND TO BE RAISED. 12. IN VIEW OF THE AFORESAID DISCUSSION, WE ARE NOT INCLINED TO INTERFERE WITH ORDER PASSED BY THE TRIBUN AL. THE APPEAL IS DISMISSED. THAT THE FACTS OF THE ASSESSEES CASE ARE IDENTICAL. TH EREFORE, THE RATIO OF THE ABOVE DECISION OF HON'BLE JURISDICTI ONAL HIGH COURT WOULD BE SQUARELY APPLICABLE. RESPECTFULLY FOLLOWIN G THE SAME, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS POINT AND RESTORE THE ITA-1580/DEL/2010 7 MATTER TO THE FILE OF THE ASSESSING OFFICER. WE DIRECT HIM TO EXAMINE THE ASSESSEES CLAIM ON MERITS WITH REGARD TO ADDITIONAL CLAIM OF EXPENDITURE AMOUNTING TO ` 2,96,52,486/- AND THEREAFTER READJUDICATE THE SAME IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT THE ASSESSING OFFICER WILL ALLOW ADEQUATE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE WHILE GIVING EFFECT TO THIS ORDER. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEEMED TO B E ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 8 TH NOVEMBER, 2013. SD/- SD/- ( (( (CHANDRA MOHAN GAR CHANDRA MOHAN GAR CHANDRA MOHAN GAR CHANDRA MOHAN GARG GG G) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 08.11.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S XEROX INDIA LIMITED, M/S XEROX INDIA LIMITED, M/S XEROX INDIA LIMITED, M/S XEROX INDIA LIMITED, 5 55 5 TH THTH TH AND 6 AND 6 AND 6 AND 6 TH THTH TH FLOOR, VATIKA BUSINESS PARK, FLOOR, VATIKA BUSINESS PARK, FLOOR, VATIKA BUSINESS PARK, FLOOR, VATIKA BUSINESS PARK, BLOCK BLOCK BLOCK BLOCK- -- -I, SECTOR I, SECTOR I, SECTOR I, SECTOR- -- -49, SOHNA ROAD, 49, SOHNA ROAD, 49, SOHNA ROAD, 49, SOHNA ROAD, GURGAON GURGAON GURGAON GURGAON 122 018, HARYANA. 122 018, HARYANA. 122 018, HARYANA. 122 018, HARYANA. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -20, NEW DELHI. 20, NEW DELHI. 20, NEW DELHI. 20, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR