Replika Press Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 1702/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6899 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 31-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESANG Y SHERPA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F, NEW DELHI BEFORE SHRI J. S. REDDY, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER I.T.A. NO.1702/DEL/2013 (ASSESSMENT YEAR 2009-10) REPLIKA PRESS PVT. LTD., VS. DCIT, CIRCLE 15(1), B-214, ASHOK VIHAR, NEW DELHI PHASE I, DELHI GIR / PAN :AAACR1084L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SAMPATH, ADV. RESPONDENT BY : SMT. KESANG Y SHERPA, SR. DR DATE OF HEARING: 31.12.2015 DATE OF PRONOUNCEMENT: 05.02.2016 ORDER PER KULDIP SINGH, JM: THE APPELLANT, M/S. REPLIKA PRESS PVT. LTD.(HEREIN AFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL, SO UGHT TO SET ASIDE THE IMPUGNED ORDER DATED 01.02.2013 PASSED BY LD. CIT(A ) XVIII, NEW DELHI QUA THE ASSESSMENT YEAR 2009-10 ON THE GROUND THAT: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ACTION OF THE AUTHORITIES BELOW IN ABANDONING T HE BOOK VERSION OF SALES AND PROFIT AND IN MAKING ADDITIONS ARISING OUT OF TIMING DIFFERENCE IN SALES OF - I) RS.13,17,916/-TO RANDOM HOUSE PUBLISHERS (I) P . LTD.; II) RS.1,17,48,220/- TO JAYPEE BROTHERS MEDICAL PUBLISHERS PVT. LTD.; III) RS. 1,26,190/- TO MMS E-EDUCATION PVT. L.TD. : 2 I.T.A.NO.1702/DEL/2013 IV) RS. 2,7 4,643/- TO THIEME MEDICAL AND SCIENTIF IC PUBLISHES PVT. LTD.; V) RS.67,100/- TO WISHWA PRAKASHAN PUBLISHERS & EXPORTS PVT. LTD. & ' 1714/- TO SARA BOOKS P. LTD. IS ARBITRARY, ERRONEOUS, MISCONCEIVED AND ILLEGAL A ND MUST BE QUASHED. 2. BRIEFLY STATED, THE FACTS OF THIS CASE ARE: DURI NG THE PROCESSING OF RETURN OF INCOME FILED BY THE ASSESSEE DECLARING IN COME OF RS.5,64,96,160/- QUA ASSESSMENT YEAR 2008-09, WAS S UBJECTED TO SCRUTINY AND CONSEQUENT UPON STATUTORY NOTICE ISSUED, MR. JA YANT KHULLAR, CA/AR ATTENDED THE PROCEEDINGS ON BEHALF OF THE ASSESSEE AND FURNISHED DETAILS. FROM THE ITS INFORMATION, ASSESSING OFFICER GATHERE D THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.81,69,098/- FROM M/S. RANDOM HOUSE PUBLISHERS INDIA PVT. LTD., WHEREAS FROM THE DETAI LS, IT IS NOTED THAT THE ASSESSEE HAD BOOKED AN AMOUNT OF RS.75,84,142/- AND ASSESSING OFFICER CALLED UPON THE ASSESSEE TO RECONCILE THE SAME. TH E ASSESSEE CLAIMED THAT THE BALANCE AMOUNT OF RS.5,84,956/- HAS BEEN BOOKED IN THE SUBSEQUENT FINANCIAL YEAR. TO VERIFY THIS FACT, INFORMATION W AS CALLED U/S 133(6) FROM THE CONCERNED PARTIES, WHICH INDICATED THAT THEY HA VE BOOKED THE EXPENDITURE OF RS.89,02,058/- , WHICH IS MORE THAN WHAT HAS BEEN BOOKED BY THE ASSESSEE AND INFORMATION AVAILABLE UNDER ITS . THE RECEIPT OF ASSESSEE WERE REQUIRED TO BE AT RS.89,02,058/- AS AGAINST THE BOOKED AMOUNT OF RS.75,84,142/- BOOKED BY THE ASSESSEE AN D CONSEQUENTLY, THE DIFFERENCE OF RS.13,17,916/- WAS ADDED TO THE INCOM E OF THE ASSESSEE BEING UNDISCLOSED RECEIPT. 3 I.T.A.NO.1702/DEL/2013 3. FROM THE ITS INFORMATION, IT WAS FURTHER GATHERE D BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.5,75,55,867/- AS AGAINST THE AMOUNT OF RS.4,67,25,440/- BOOKED BY TH E ASSESSEE LEADING TO THE DIFFERENCE OF RS.1,08,30,427/-. THE ASSESSEE C LAIMED THE DIFFERENCE TO BE ON ACCOUNT OF BILLING DONE IN THE NEXT YEAR WHER EAS CLIENT HAS BOOKED SALES IN THIS YEAR ON COMMERCIAL INVOICE BASIS. FI NDING THE EXPLANATION OF THE ASSESSEE NOT SATISFACTORY, AMOUNT OF RS.1,17,48 ,220/- WAS ADDED TO THE INCOME OF THE ASSESSEE BEING CONCEALED INCOME / SU PPRESSED SALES. 5. FROM THE ITS INFORMATION, ASSESSING OFFICER FURT HER GATHERED THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.2,93,730/ - FROM MMS E- EDUCATION PVT. LTD., RS.8,51,730/- FROM THIEME MEDI CAL AND SCIENTIFIC PUBLISHERS PVT. LTD. AN RS.2,33,684/- FROM WISHWA P RAKASHAN PUBLISHERS AND EXPORTS P. LTD. WHEREAS THE ASSESSEE HAD BOOKED AN AMOUNT OF RS.1,67,540/-, RS.5,77,087/- AND RS.1,66,584/- RESP ECTIVELY. THE ASSESSEE EXPLAINED THE DIFFERENCE OF RS.1,26,190/-, 2,74,643 /- AND RS.67,100/- ON ACCOUNT OF BILLING BOOKED AT THE INVOICE OF PAYMENT INSTEAD OF ON GOODS RECEIVED BASIS / BILLING DONE IN NEXT YEAR. FINDIN G THE EXPLANATION OF THE ASSESSEE NOT SATISFACTORY, THE ASSESSING OFFICER AD DED AN AMOUNT OF RS.1,26,190/-, RS.2,74,643/- AND RS.67,100/- TO THE INCOME OF THE ASSESSEE BEING CONCEALED INCOME. SIMILARLY, IN CASE OF M/S. SARA BOOKS PVT. LTD., PAYMENT OF RS.1,56,750/- HAS BEEN SHOWN WHEREAS THE ASSESSEE HAS BOOKED RS.1,54,856/- AND THE DIFFERENCE OF RS.1,714 /- REMAINED UNEXPLAINED AND THE SAME IS ADDED TO THE INCOME OF THE ASSESSEE. 4 I.T.A.NO.1702/DEL/2013 6. THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A ) WHO HAS DISMISSED THE APPEAL. FEELING AGGRIEVED, THE ASSES SEE CARRIED THE MATTER BEFORE THE TRIBUNAL BY FILING THE PRESENT APPEAL. 7. LD. A.R. FOR THE ASSESSEE, CHALLENGING THE IMPUG NED ORDER, CONTENDED THAT THE RECONCILIATION STATEMENT TO TALL Y THE DIFFERENCE POINTED OUT, HAS BEEN FILED BY THE ASSESSEE AND LD. CIT(A) HAS DECLARED THE ACCOUNTS BOOKS AS CORRECT; THAT LD. CIT(A) HAS ERRE D IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F DIFFERENCE IN TIMING OF SALES AND PURCHASE MADE BY THE ASSESSEE. HOWEVE R, ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORDER PASSED BY LD. CIT(A) . 8. WE HAVE HEARD BOTH THE LD. AUTHORIZED REPRESENTA TIVES AND PERUSED THE MATERIAL PLACED ON RECORD IN THE LIGHT OF THE O RDERS OF AUTHORITIES BELOW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE SOLE QUESTION ARISES FOR DETERMINATION IN TH IS CASE IS, AS TO WHETHER LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDI TION MADE BY THE ASSESSING OFFICER DUE TO LACK OF RECONCILIATION OF SALE AND PROFITS IN THE BOOKS OF ACCOUNTS BY THE ASSESSEE COMPANY. UNDISPUTEDLY, THE RECONCILIATION AND EXPLANATION FURNISHED BY THE ASS ESSEE TO EXPLAIN THE DIFFERENCE OF TIMING IN THE SALES AND PROFITS INCOR PORATED IN THE BOOKS OF ACCOUNTS IN THE ITS INFORMATION AVAILABLE HAS NOT B EEN ACCEPTED BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS WHO HAS THEREBY MADE THE ADDITION IN QUESTION. 10. LD. CIT(A) IN ORDER TO CONFIRM THE ADDITION MAD E BY THE ASSESSING OFFICER, RETURNED THE FINDINGS TO THE FOLLOWING EFF ECT: 5 I.T.A.NO.1702/DEL/2013 4.5 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT OR DER, SUBMISSIONS, REMAND REPORT, AND REJOINDER THEREOF. 1116 FACTS OF THE CASE AS PER ASSESSMENT ORDER ME THAT AS PER ITS INFORMATION AVA ILABLE WITH THE ASSESSING OFFICER THE ASSESSEE HAD MADE SALES TO VA RIOUS PARTIES AS UNDER: S. NO NAME OF THE PARTIES ITS INFORMATION SALES AS PER RETURN DIFFERENCE/ ADDITION 1 M/S. RANDOM HOUSE PUBLISHERS (I) PVT. LTD. 81,69,098 75,84,142 5,84,956 2 M/S. JAYPEE BROTHERS MEDICAL PUBLISHERS PVT. LTD. 5,756,55,867 4,67,25,440 1,08,30,427 3 M/S.MMS E-EDUCATION PVT. LTD. 2,93,730 1,67,540 1,26,190 4 M/S. THIEME MEDICAL * SCIENTIFIC PUBLISHERS PVT. LTD. 8,51,730 5,77,087 2,74,643 5 M/S. WISHWA PRAKAHAN PUBLISHERS & EXPORT PVT. LTD., 2,33,684 1,66,584 67,100 6 M/S. SARA BOOKS PVT. LTD. 1,56,570 1,54,856 1,714 AS THERE WAS DIFFERENCE IN THE AMOUNT OF SALES BOOK ED INFORMATION AVAILABLE IN ITS DATA IN RESPECT OF THE ABOVE SIX P ARTIES, THE ASSESSING OFFICER SENT NOTICES U/S 133(6) OF THE I.T. ACI, 19 61 TO VERIFY THE SALES AS PER THEIR LEDGER ACCOUNTS. THE RESPONSE WAS AS UN DER:- (I) M/S RANDOM HOUSE PUBLISHERS. [L) PVT. LTD., INF ORMED THAT IT HAD BOOKED PURCHASES DURING THE FINANCIAL YEAR 2008-09 FROM M/S. REPLIKA PRESS PVT. LTD. PVT. LTD. TO THE TUNE OF HS . 8902.058./- WHEREAS AS PER ITS INFORMATION THIS FIGURE WAS RS.8 1,69,098/- WHICH WAS HIGHER THAN THE INFORMATION OF ITS DATA, AND THE ASSESSEE HAS SHOWN THE SALES BOOKED FOR THIS PARTY AS RS.75,84,142/- IN ITS LEDGER. THE DIFFERENCE OF RS .13,17,916/- WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNDISCLOSED RECEIPTS FOR THE YEAR. (II) M/S. JAYPEE BROTHERS MEDICAL PUBLISHERS PVT. L TD. INFORMED THAT IT HAD BOOKED PURCHASES TO THE TUNE OF RS. 5.6 5_.60.0741- WHEREAS THE ASSESSEE HAD SHOWN SALES TO THIS PARTY AT RS. 4,67,25,440/- AND AS PER ITS INFORMATION SALES TO H IS PARTY WAS RS. 5,75,55,867/-. THE DIFFERENCE OF RS.1,08,30,427/- WAS ADDED TO THE INCOME OF THE ASSESSEE FOR THE YEAR. ALSO IN THIS C ASE THE AO DETECTED A DIFFERENCE IN OPENING BALANCE AND CLOSIN G BALANCE OF RS. 6 I.T.A.NO.1702/DEL/2013 9,17,793/- AND ADDED THE TOTAL DIFFERENCE OF RS. 1, 17,48,2201- TO THE TOTAL INCOME OF THE ASSESSEE AS SUPPRESSED SALES. (III) RS. 2,93,730/- FROM MMS E-EDUCATION PVT. LTD. AS AGAINST RS.L,67,50/- BOOKED BY THE ASSESSEE. THE AMOUNT OF DIFFERENCE OF RS.1,26,190/- WAS ADDED AS SUPPRESSED SALES FOR THE YEAR. (IV) RS.8,51,730/- FROM M/S. THIEME MEDICAL AND SCI ENTIFIC PUBLISHERS PVT. LTD. AS AGAINST RS.5,77,087/- BOOKE D BY THE ASSESSEE. THE AMOUNT OF DIFFERENCE OF RS.2,74,643/- WAS ADDED AS SUPPRESSED SALES FOR THE YEAR. (V) RS.2,33,684/- FROM M/S. WISHWA PRAKASHAN PUBLIS HERS & EXPORTS PVT. LTD. AS AGAINST RS 1,66,584/- BOOKED B Y THE ASSESSEE. THE AMOUNT OF DIFFERENCE OF RS. 67,100/- WAG ADDED AS SUPPRESSED SALES FOR THE YEAR. (VI) M/S. SARA BOOKS PIA. LTD. HAD SHOWN PAYMENT O F RS.1,56,570/- WHEREAS THE ASSESSEE HAS BOOKED RS.1, 54,856/-. THE AMOUNT OF RS.1,714/- WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT WAS EXAMINED BY THE ASSESSING OFFICER WHO REPORTED THAT DURING THE REMA ND PROCEEDINGS, THE ASSESSEE COMPANY EXPLAINED THAT TH E COMPANY CONSISTENTLY AND CONTINUOUSLY FOLLOWING THE ACCOUNT ING POLICY. ACCOUNTING STANDARD 9 AND RECOGNIZES ITS REVENUE O N THE BASIS OF EXCISE INVOICE WHICH ISSUED ONLY AT THE TIME, WHEN THE GOODS / BOOKS ARE ACTUALLY AND PHYSICALLY GETS OUT OF ITS F ACTORY PREMISES WHEREAS, THE PARTIES ARE FOLLOWING SOME OTHER ACCOU NTING POLICIES AND BOOKED ALE PURCHASES SOMETIMES AT THE LIME OF G IVING PURCHASE ORDER / BEFORE RECEIVING THE PHYSICAL DELIVERY OF G OODS / BOOKS AND SOMETIMES THEY BOOKED PURCHASES AT THE TIME OF MAKI NG THE PAYMENT AND TRIED TO ESTABLISH ITS CONTENTION THAT THE ONLY REASON OF DIFFERENCES IS MAINLY DUE TO TIMING OF BOOKING THE PURCHASE / SALES. THE ASSESSEE FURTHER SUBMITTED THAT IT HAS ALREADY SUBMITTED SCHEDULES REGARDING ACCOUNTING POLICIES AND THE MET HOD OR REVENUE RECOGNITION DURING THE ASSESSMENT PROCEEDINGS AS A PART OF AUDITED BALANCE SHEET. DURING THE REMAND PROCEEDINGS THE ASSESSEE COMPANY HAS PROVIDED RECONCILIATION STATEMENT PREPARED IN RESPECT OF EAC H PARTY WHICH 7 I.T.A.NO.1702/DEL/2013 ALSO CONTAINS THE INFORMATION QUANTITY & VOLUME WIS E, AND PER THE RECONCILIATION STATEMENT ALL THE DIFFERENCES ARE TA LLIED AS ON CLOSING BALANCE ON 31.03.2012. THE ASSESSING OFFICER WAS TH EREFORE, CONVINCED THAT THE DIFFERENCES WERE TALLIED AND THE DIFFERENCE NOTICED BY THE EARLIER ASSESSING OFFICER WAS ON ACC OUNT OF DIFFERENT ACCOUNTING POLICIES BEING FOLLOWED BY THE APPELLANT COMPANY AND BY THE PURCHASING PARTIES. 11. FROM THE PERUSAL OF THE IMPUGNED ORDER, RECORDS RELIED UPON BY THE PARTIES AND ARGUMENTS ADDRESSED BY THE LD. A.R., WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE AD DITION MADE BY THE ASSESSING OFFICER FOR THE FOLLOWING REASONS: I) THAT WHEN THE LD. CIT(A) HAS ACCEPTED THE RECON CILIATION STATEMENT TALLYING ALL THE DIFFERENCES OF CLOSING B ALANCE AS ON 31.03.2012 MADE BY THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS, LD. CIT(A) WAS NOT EXPECTED TO PROCEED ON THE BASIS OF CONJECTURES AND SURMISE; II) THAT THE FINDINGS OF LD. CIT(A) THAT THE DOCUME NTARY EVIDENCE ACCEPTED BY THE ASSESSING OFFICER DURING R EMAND PROCEEDINGS, DO NOT SEEM TO BE RELIABLE, ARE NOT BA SED UPON ANY COGENT REASONS, BECAUSE THE DIFFERENCE EARLIER NOTE D BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS WAS ONLY ON ACCOUNT OF DIFFERENT ACCOUNTING POLICIES BEING ADOP TED BY THE ASSESSEE COMPANY AND BY THE PURCHASING PARTIES AND THIS DIFFERENCE COULD ONLY BE FURTHER RECONCILED BY VERIFYING THE R ECORDS OF PURCHASING PARTIES; III) THAT WHEN LD. CIT(A) HAS HERSELF RECORDED THE FINDINGS THAT THE ASSESSING OFFICER DURING REMAND PROCEEDINGS SHO ULD HAVE 8 I.T.A.NO.1702/DEL/2013 VERIFIED ALL THESE FACTS BEFORE ACCEPTING THE RECON CILIATION STATEMENT OF THE ASSESSEE COMPANY, SHE WAS NOT RIGHT TO PROCE ED WITH THE CONFIRMATION OF ADDITION WITHOUT GETTING THE DUE VE RIFICATION DONE; IV) THAT LD. CIT(A) BEING A QUASI JUDICIAL AUTHORIT Y IS REQUIRED TO PROVIDE AN OPPORTUNITY OF BEING HEARD TO THE PARTIE S BEFORE DECIDING THE MATTER. 12. IN THE INSTANT CASE, LD. CIT(A) HAS DISPUTED TH E RECONCILIATION STATEMENT, ACCEPTED BY THE ASSESSING OFFICER DURING REMAND PROCEEDINGS, WITHOUT GETTING THE SAME VERIFIED FROM THE PURCHASI NG PARTIES. SO, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER IS REQUIRED TO BE RESTORED TO THE LD. CIT(A) TO DECIDE AFRESH AFTER PROVIDING OPPORTUNITY OF BEING HEARD TO THE PARTIES CONCERNED. 13. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. 14. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH FEB., 2016. SD./- SD./- (J. S. REDDY) (KULDIP SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 05.02.2016 SP. COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI) 9 I.T.A.NO.1702/DEL/2013 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 13/1 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 21/1 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 5/2/16 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 5/2 SR. PS/PS 7 FILE SENT TO BENCH CLERK 8/2 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER