M/s. Sanspareils Greenlands Pvt. Ltd., Meerut V. ACIT, Meerut

ITA 1663/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8457 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 30-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIJAY KUMAR CHADHA SENIOR
• Assessee Lawyers: PREMJIT S KASHYAP
• Keywords: Depreciation; Opportunity of being heard; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1663/DEL./2016 (ASSESSMENT YEAR : 2012-13) M/S. SANSPAREILS GREENLANDS PVT. LTD., VS. ACIT, CI RCLE 2, C/O J.M. CHADHA & CHADHA, MEERUT. 299, P.L. SHARMA ROAD, MEERUT. (PAN : AACCS2788N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PREMJIT S. KASHYAP, CA REVENUE BY : DR. VIJAY KUMAR CHADHA, SENIOR DR DATE OF HEARING : 26.09.2019 DATE OF ORDER : 07.10.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. SANSPAREILS GREENLANDS PVT. LTD. ( HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 27.01.2016 PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS), MEERUT QUA THE ASSESSME NT YEAR 2012-13 ON THE GROUNDS INTER ALIA THAT :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF RS.65,83,370/- ON AC COUNT OF SALES PROMOTION AND DISALLOWANCE OF RS.16,49,043/- ON ACC OUNT OF COST OF GOODS FOR FREE REPLACEMENT. ITA NO.1663/DEL./2016 2 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS FUR THER NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF RS.65,4 4,633/- ON ACCOUNT OF DISCOUNT TO INDIAN CUSTOMERS. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ISSUE AT HAND ARE : ASSESSEE IS INTO THE BUSINESS OF MANUFAC TURE, PURCHASE, SALE AND EXPORT OF SPORTS GOODS. DURING ASSESSMENT PROC EEDINGS, ASSESSING OFFICER (AO) NOTICED THAT THE ASSESSEE HAS NOT PROD UCED ANY EVIDENCE QUA THE COST OF GOODS FOR SALES PROMOTION AND COST OF GOODS REPLACED TO THE TUNE OF RS.1,31,66,740/- AND RS.32,66,827/- RES PECTIVELY AND REACHED THE CONCLUSION THAT AS AGAINST THE GOODS RE PLACED IN THE PRECEDING YEARS WORTH OF RS. 19,53,457/-, ASSESSEE REPLACED COST QUA THE YEAR UNDER ASSESSMENT TO THE TUNE OF RS.32,98,086/- WHICH IS RAISED BY 68% AS COMPARED TO THE LAST YEAR WHEREAS SALES HAVE BEEN INCREASED TO THE TUNE OF 19% ONLY AND ALSO PROCEEDED TO HOLD THA T IN THE PRECEDING YEAR, COST OF GOODS FOR SALE PROMOTION WAS RS.64,81 ,403/- BUT DURING THE YEAR UNDER ASSESSMENT IT WAS RS.1,31,66,740/- WHICH IS INCREASED BY 104% AND CONSEQUENTLY ALLOWED 50% OF THE COST OF SA LES PROMOTION AND COST REPLACED ONLY AND THEREBY MADE AN ADDITION OF RS.82,32,413/- (RS.16,49,043/- + RS.65,83,370/-). 3. AO ALSO NOTICED THAT THE ASSESSEE HAS DEBITED DI SCOUNT TO THE INDIAN CUSTOMERS TO THE TUNE OF RS.1,69,72,985/- IN COMPARISON TO RS.76,67,906/- IN THE PRECEDING YEAR WITH A STEEP R ISE OF 121% WHEREAS INCREASE IN DOMESTIC SALES IS OF 36% ONLY AND PROCE EDED TO ALLOW THE ITA NO.1663/DEL./2016 3 INCREASE IN DEPRECIATION @ 36% INCREASE AND THEREBY MADE AN ADDITION OF RS.65,44,633/-. 4. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS CONFIRMED THE ADDITIONS BY PARTLY ALLOW ING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 6. UNDISPUTEDLY, THE AO HAS DISALLOWED ALL THE AFOR ESAID EXPENSES ON AD HOC BASIS. IT IS ALSO NOT IN DISPUTE THAT NE ITHER IN THE PRECEDING YEARS NOR IN THE SUCCEEDING YEARS, SUCH EXPENSES CL AIMED BY THE ASSESSEE HAVE BEEN DISALLOWED BY THE REVENUE. 7. AT THE VERY OUTSET, LD. AR FOR THE ASSESSEE CONT ENDED THAT ALL THE NECESSARY DOCUMENTS QUA ALLOWANCES CLAIMED HAVE BEE N PRODUCED BEFORE THE AO. AO AS WELL AS LD. CIT (A) HAVE TIME AND AGAIN MENTIONED IN THE ORDER THAT THE ADDITIONS ARE BEING MADE ON ACCOUNT OF NON-FURNISHING OF THE REQUISITE DOCUMENTARY EVIDENC E TO SUBSTANTIATE THE SALE PROMOTION, GOODS REPLACED AND DISCOUNT GIVEN T O THE INDIAN CUSTOMERS. FOR PERUSAL OF THE BENCH, ASSESSEE PROD UCED PLETHORA OF DOCUMENTS TO SUPPORT HIS CONTENTION WHICH ARE AVAIL ABLE AT PAGES 45 TO 193 OF THE PAPER BOOK. ITA NO.1663/DEL./2016 4 8. IN VIEW OF THE MATTER, WE ARE OF THE CONSIDERED VIEW THAT WHEN THE ASSESSEE HAS PRODUCED REQUISITE DOCUMENTARY EVI DENCE BEFORE THE AO, THE ADDITION WAS NOT REQUIRED TO BE MADE ON THE AD HOC BASIS RATHER IT SHOULD HAVE BEEN MADE, IF ANY, ON THE BASIS OF A CTUAL FACTS OF THE CASE. IN THESE CIRCUMSTANCES, WE DEEM IT NECESSARY TO REM AND THE CASE BACK TO THE AO TO DECIDE AFRESH IN THE LIGHT OF THE DOCUMEN TS RELIED UPON BY THE ASSESSEE AS WELL AS IN THE LIGHT OF THE FACTS THAT SUCH ALLOWANCES CLAIMED BY THE ASSESSEE HAVE BEEN ALLOWED BY THE REVENUE IT SELF IN THE PRECEDING AS WELL AS SUCCEEDING YEARS. NEEDLESS TO SAY THAT THE AO SHALL PROVIDE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO PASS THE ORDER AFRESH. CONSEQUENTLY, THE APPEAL FILED BY THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 7 TH DAY OF OCTOBER, 2019. SD/- SD/- (N.K. BILLAIYA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 7 TH DAY OF OCTOBER, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.