Bernina International Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1947/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7567 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-11-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 27-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: V MOHAN; VED JAIN ADV SMT RANO JAIN
• Keywords: Documents seized
• Section: 142(1); 80HHC; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO. - 1947 /DEL/201 2 (ASSESSMENT YEAR - 2 002 - 03 ) BERNINA INTERNATIONAL PVT. LTD., STATE BANK OF PATIALA BLDG., MEHRAULI - MAHIPALPUR ROAD, MAHIPALPUR, NEW DELHI - 110037. P AN - AABCB4006G (APPELLANT) VS ITO, WARD - 2(4), ROOM NO. - 381, C.R. BUILDING, INCOME TAX OFFICE, I.P.ESTATE, NEW DELHI - 110002. (RESPONDENT) APPELLANT BY SH.VED JAIN, ADV., SMT. RANO JAIN, CA & SH. V.MOHAN, ADV. RESPONDENT BY MS. Y.KAKKAR, DR ORDER PER DIVA SINGH, JM TH IS IS AN APPEAL FILED BY THE ASSESSEE CHALLENGING THE CORRECTNESS OF THE ORDER DATED 28.02.2012 OF CIT(A) - V, NEW DELHI P ERTAINING TO 200 2 - 0 3 ASSESSMENT YEAR . THE RELEVANT FACTS AS EMANATING FROM THE ORDER ARE THAT THE ASSESSEE DECLARED AN INCOME OF RS.3,06,788/ - BY WAY OF FILING THE RETURN DATED 31.10.2002. IT WAS PROCESSED U/S 143(1) (A) . AS PER THE ASSESSMENT ORDER SEARCH OPERATION U/S 13 2(1) W AS CARRIED OUT O N KOCHAR GROUP OF CASES ON 24.04.2003 BY THE DIRECTORATE OF PATNA AND RELATED SURVEY OPERATIONS WERE CARRIED OUT AT VARIOUS PLACES INCLUDING DELHI. THE SURVEY OPERATION IN RESPECT OF ASSESSEE WAS CARRIED OUT AT D - 2/2265, VASANT KUNJ , NEW DELHI VIDE LETTER DATED F.NO.DDIT(INV.)II/MUZ/2003 - 04/518 DATED 19.03.2004 AND WAS FORWARDED TO THE CONCERNED AO FOR FURTHER ACTION. IN RESPONSE TO THE ISSUANCE OF NOTICES U/S 148 AND NOTICES U/S 143(2) AND 142(1) THE 2 I.T.A .NO. - 1947 /DEL/201 2 ASSESSEE WAS REQUIRED TO EXPLAI N , T HE FOLLOWING SPECIFIC DOCUMENTS SEIZED WHOSE CONTENTS ARE EXTRACTED FROM THE ASSESSMENT ORDER AND READ AS UNDER: - PARTY NAME INVOICE NO. ACTUAL AMT. BILL AMT CASH TO BE TAKEN SHOELINE 43 9,65,640 10,53,240 87,600 / - SHOE POINT 82 3,46,086 4,93,968 1,47,882/ - 2. THE ASSESSEE IN REPLY IS FOUND TO HAVE STATED BEFORE THE AO THAT THESE WERE NOTES OF THE SOME EMPLOYEES AND THE MANAGEMENT WAS NOT AWARE OF THE SAME. TH IS EXPLANATION WAS NOT ACCEPTED AN D AN ADDITION OF RS.2,35,482/ - WAS MADE AS INCOME OF THE ASSESSEE NOT DISCLOSED IN THE BOOKS OF ACCOUNT U/S 69 OF THE INCOME TAX ACT. THE SAID ADDITION W AS CONFIRMED IN APPEAL BY THE CIT(A) . 3. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4 . ALTHOUGH VARIOUS GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN THE PRESENT APPEAL HOWEVER THE LD. AR SUBMITTED THAT HE WOULD ADDRESS ONLY THREE ARGUMENTS. ADDRESSING THE FIRST ADDITION OF RS.87,600/ - IT WAS SUBMITTED THAT THE SAME HAS BEEN CONFIRMED BY THE CIT(A) ON THE GROUND THAT LEDGER ACCOUNT OF THE ASSESSEE AND THE PARTIES BOTH CONFIRMED THAT THE AMOUNT OF THE BILL WAS RS.10,53,240/ - AND ACCORDINGLY THE ASSESSEE MAY NOT HAVE A CASE UNLESS THE CONSISTENT ARGUMENT ADVANCED IS ACCEPTED NAMELY THAT THE SPECIFIC NOTING WAS MADE BY AN EMPLOYEE , MR. DEEPAK AND DOES NOT RECORD THE CORRECT FACTS AND THE MANAGEMENT DOES NOT ACCEPT THE DOCUMENT AS A CORRECT RECORDING OF FACTS. HOWEVER QUA THE SECOND ADDITION CONFIRMED BY THE CIT(A) OF RS.1,47,882/ - . IT WAS H IS STAND THAT THE CIT(A) HAS IGNORED THE FACT THAT BOTH THE LEDGER ACCOUNT OF THE ASSESSEE AND THE BILL OF THE PARTY SHOE POINT SHOW THAT T HE INVOICE WAS OF THE ACTUAL AMOUNT OF RS.3,46,086/ - AND IN THESE CIRCUMSTANCES THE DEPARTMENT SHOULD HAVE TAKEN THIS FACT INTO CONSIDERATION AND THE CIT(A) WHILE CONFIRMING THE ISSUE IN PARA 4(I) OF HIS ORDER IN PARA 4 SUB - PARA (2) IGNORING THIS EVIDENCE ON RECORD CONCLUDES THAT IT IS MOST LIKELY THAT BALANCE AMOUNT OF RS.1,47,900/ - HAD BEEN TAKEN IN CASH. IT WAS HIS SUBMISSION INVITING ATTENTION TO PAPER BOOK PAGE NO. - 26 & 27 WHICH ARE ADDRESSING THE INVOICE NO. - 43 OF M/S SHOE LINE THAT THE ACTUAL AMOUNT AS PER THE 3 I.T.A .NO. - 1947 /DEL/201 2 SCRIBBLED NOTE, COPY OF WHICH IS PLACED AT PAPER BOOK PAGE NO. - 1 IS RS.9,65,640/ - . THE INVOICE IN THE LEDGER ACCOUNT ARE FOR RS.10,53,240/ - . FOR SHOE POINT THE RELEVANT DOCUMENTS IN PAPER BOOK PAGE NO. - 24 & 25 WOULD SHOW THAT THE DEBIT FOR THE YEAR IS FOR RS.3,46,086/ - AND BILL RAISED FOR M/S SHOES POINT IS ALSO RS.3 ,46,086/ - . IN THESE CIRCUMSTANCES, EVEN IF THE ASSESSEE S STAND THAT THESE WERE MERE SCRIBBLING OF SOME EMPLOYEES NOT OWNED BY THE MANAGEMENT IS IGNORED EVEN THEN THE ONLY ADDITION WHICH MAY STAND IN THE EYES OF LAW IN THE ADDITION OF RS.87,600/ - . ADDRES SING THE THIRD ARGUMENT IT WAS HIS PRAYER THAT CONSIDERING THE FACT THAT THE ASSESSEE IS ELIGIBLE TO GET DEDUCTION U/S 80HHC , T HE AO MAY BE DIRECTED TO RE - COMPUTE THE DEDUCTION IN TERMS OF THE DIRECTION OF THE ITAT IN THE DECISION OF M/S RAJ SONS JEWELLE RS VS. ITO 86 TTJ 1106 (DEL.). 5 . LD. SR. DR RELYING UPON THE ORDERS OF THE AUTHORITIES BELOW SUBMITTED THAT THE ADDITION DESERVES TO BE SUSTAINED AS THE ARGUMENT THAT THE EMPLOYEE WITHOUT KNOWLEDGE OF THE MANAGEMENT CAN BE SCRIBBLING NOTES HAS NOT BEEN AC CEPTED AND SHOULD ALSO NOT BE ACCEPTED BASED ON MERE ASSERTIONS. THE FACTS REMAIN THAT THE DOCUMENTS SHOW THAT THE ASSESSEE IN RESPECT OF THE SPECIFIC INVOICES HAS SET OUT ACTUAL BILL AND ASKED BILL ACCORDINGLY THE PRESUMPTION DRAWN BY THE CIT(A) I N UPHOLDING THE ADDITION IS WARRANTED ON FACTS WAS RELIED UPON . ADDRESSING THE WITHOUT PREJUDICE ARGUMENT ADVANCED BY THE LD. AR IT WAS HER SUBMISSION THAT THERE CAN BE NO PRESUMPTION THAT THE SURRENDERED AMOUNT REPRESENT EXPORT INCOME. SPECIAL DEDUCTION IT WAS SUBMITTED HAS BEEN HELD TO BE AVAILABLE ON FULFILLMENT OF CERTAIN CONDITIONS SPECIFIED U/S 80HHC. RELIANCE IN SUPPORT OF THE SAID PROPOSITION WAS P LACED ON SARLA HANDI CRAFTS P. LTD. VS ACIT 296 ITR 94 (P&H). 6 . LD. AR IN REPLY STATED TH A T THE PRINCIPLE LAID DOWN BY THE HON BLE PUNJAB & HARYANA HIGH COURT DOES NOT HAVE ANY APPLICABILITY IN THE FACTS O F THE PRESENT CASE AS IT IS NOT THE CASE OF THE AS SESSEE THAT SOME UNACCOUNTED FUNDS ARE BEING SURRENDERED. IT WAS SUBMITTED THAT IT IS SIMPLY A CASE WHERE THE INCOME OF THE ASSESSEE IS BEING INC R E A S E D BY DISALLOWING A PART OF THE EXPENDITURE. THUS ONCE THE 4 I.T.A .NO. - 1947 /DEL/201 2 EXPENSES HAVE BEEN REDUCED THE RESULTANT PROFI T IS FROM THE EXPORT. IN RESPONSE TO THE QUERY BY THE BENCH WHETHER THE ASSESSEE HAS ANY DOMESTIC SALES OR NOT IT WAS CLARIFIED EVEN THOUGH THE ASSESSEE DOES HAVE A DOMESTIC SALES ALSO HOWEVER PROPORTIONATE DEDUCTION MAY BE DIRECTED TO BE CARRIED OUT BY THE AO AND LET HIM EXAMINE THE ISSUE. THE ISSUE IT WAS SUBMITTED HAS BEEN ADDRESSED BY THE ORDER OF THE DELHI BENCH RELIED UPON. 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE SAME SPECIFI CALLY PAPER BOOK PAGE NO. - 1, 26 & 27 PERTAINING TO M/S SHOE LINE. IT IS SEEN THAT THE ACTUAL AMOUNT ADDRESSED IN PAPER BOOK P A G E - I IS RS.9,65,640/ - AND THE BILL AMOUNT IS RS.10,53,240/ - AS SUCH THE ADDITION OF RS.87,600/ - DESERVES TO BE SUSTAINED. HOWEVER IN REGARD TO THE SECOND PARTY NAMELY M/S SHOE POINT AS PER INVOICE NO. - 82 THE ACTUAL PURCHASE FROM THE PARTIES IS RS.3,46,086/ - AND AS AGAINST THE AMOUNT OF RS.4,93,986/ - APPEARING IN THE PAPER BOOK PAGE NO. - 1. THE AMOUNT OF RS.3,46,086/ - IS SUPPORTED BY T HE LEDGER OF BOTH THE PARTIES RECORDED IN THE BOOKS OF ACCOUNTS AND THE BILL RAISED BY THE CONCERNED PARTIES AVAILABLE AT PAGE 25 AND DEBIT VOUCHER AT PAGE 24. ON ACCOUNT OF THIS FACT, WE DO NOT FIND OURSELVES IN AGREEMENT WITH THE FINDING OF THE CIT(A) T HAT IT IS MOST LIKELY THAT IT MUST HAVE BEEN TAKEN IN CASH. ACCORDINGLY ADDITION SUSTAINED OF RS.1,47,882/ - IS DIRECTED TO BE DELETED. TO THIS EXTENT THE ASSESSEE SUCCEEDS . C ONSIDERING THE WITHOUT PREJUDICE ARGUMENTS OF THE ASSESSEE, WE DIRECT THE AO T O CONSIDER THE ALLOWABILITY OF ASSESSEE S CLAIM IF PERMISSIBLE IN LAW. 8 . IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 2 T H OF DECEMBER 2014. S D / - S D / - ( T.S.KAPOOR ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 2 / 12 /2014 *AMIT KUMAR* 5 I.T.A .NO. - 1947 /DEL/201 2 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI