The DCIT, Circle-1(3), Ahmedabad V. Smt. Neetaben Seth, Ahmedabad

ITA 2314/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8683 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 16-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI RIFAUR RAHMAN, ACCOUNTANT MEMBER ./ ITA NO.2314/AHD/2017 / ASSTT. YEAR: 2013-14 DCIT, CIR.1(3) AHMEDABAD. VS. SMT.NEETA SETH 4,5,6 KB COMMERCIAL CENTRE NR. DINBAI TOWER LALDARWAJA AHMEDABAD 380 001. PAN : AEQPS 9091 H / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI L.P. JAIN, SR.DR ASSESSEE BY : MS.URVASHI SHODHAN, AR ! / DATE OF HEARING : 28/06/2019 '#$ ! / DATE OF PRONOUNCEMENT: 15/07/2019 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF THE LD.CIT(A)-10, AHMEDABAD DATED 9.8.2017 PASSED FOR T HE ASSTT.YEAR 2013-14. 2. REVENUE HAS TAKEN THREE GROUNDS OF APPEAL, OUT O F THAT GROUND NO.1 AND 2 ARE SUBSTANTIAL GROUNDS OF APPEAL . THEY READ AS UNDER: ITA NO.2314/AHD/2017 2 I) THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF TRADE DEPOSIT OF RS.96,21,107/- II) THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF ADVANCE RECEIVED BY THE ASSESSEE OF RS.58,121/- 3. IT HAS BEEN BROUGHT TO OUR NOTICE THAT BOTH THE ISSUES ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T HE ITAT PASSED IN THE ASSTT.YEAR 2010-11. THE LD.CIT(A) HAS CONSI DERED BOTH THESE ISSUES ELABORATELY. BEFORE ADVERTING TO THE I SSUE, WE WOULD LIKE TO NOTE OF THE FINDING RECORDED BY THE CIT(A), WHICH READS AS UNDER: 1. THE SUBMISSIONS MADE BY THE APPELLANT, THE MATE RIAL AVAILABLE ON RECORD AS WELL AS THE ASSESSMENT ORDER PASSED BY THE AO WERE PERUSED AND CONSIDERED. THE FIRST EF FECTIVE GROUND OF APPEAL IS AGAINST THE ADDITIONS OF RS. 96 .21.107/- MADE BY THE ASSESSING OFFICER CONSIDERING THE TRADE DEPOSITS AS REVENUE RECEIPTS. THE APPELLANT CONTENDED THAT T HIS ISSUE HAS BEEN DECIDED BY THE HON'BLE IT AT, 'B' BENCH, AHMEDABAD, VIDE ORDER DATED 09/08/2016 IN THE APPEL LANT'S OWN CASE FOR A.Y. 2010-11 IN HER FAVOUR. THE OPERAT IVE PARA OF THE HON'BLE ITAT'S ORDER IS REPRODUCED AS UNDER: - '5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE CONSIDERING THE TRADE DEPOSITS RECEIVED BY THE ASSESSES AS THE INCO ME OF ASSESSES. WE FIND THAT THE ID. CIT(A) WHILE DELE TING THE ADDITION HAS NOTED THAT ASSESSES IS CARRYING ON THE BUSINESS SALES THROUGH AUTHORISED REPRESENTATIVE DEALERS (ARDS) APPOINTED BY THE ASSESSEE AND SALES SERVICE PROVIDERS (SSPS) APPOINTED BY HERO MOTORS L TD. SINCE ASSESSEE'S VEHICLES ARE KEPT WITH ARDS AND SS PS FOR DISPLAY, TEST DRIVE, ETC., TRADE DEPOSITS ARE R ECEIVED FROM THEM BY THE ASSESSEE BY WAY OF SECURITY DEPOSI TS. THE ID. CIT(A) WHILE DELETING THE ADDITION HAS GIVE N A FINDING , THAT AS AND WHEN THE SALES TAKE PLACE THR OUGH ITA NO.2314/AHD/2017 3 ARDS AND SSPS, THE SALE PROCEEDS A/E ACCOUNTED AS INCOME BY THE ASSESSEE AND THIS METHOD OF ACCOUNTIN G HAS BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE AND HAS ALSO BEEN ACCEPTED BY THE REVENUE IN THE I SCRUTINY PROCEEDINGS. HE HAS FURTHER- NOTED THAT DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAD RECEIVED TRADE DEPOSITS OF RS. 35.5 LACS AND HAS REPAID RS. 26 LAC S OUT OF IT AND IN EFFECT THE NET TRADE RECEIVED BY THE ASSESSEE DURING THE YEAR WAS ONLY TO THE TUNE OF RS . 9.5 LACS. UNDER THESE CIRCUMSTANCES, ID. CIT(A) HAD DELETED THE ADDITION. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL TO CONTROVERT THE FINDINGS OF I D. CIT(A). IN VIEW OF THE AFORESAID FACTS, WE SEE NO R EASON TO INTERFERE WITH THE ORDER OF ID. CIT(A) AND THIS GROUND OF REVENUE IS DISMISSED.' 4.1 I AS MENTIONED ABOVE, THE ISSUE HAS BEEN DECIDE D IN FAVOUR OF THE APPELLANT IN HER OWN CASE FOR A.Y. 20 10-11 BY THE HON'BLE JURISDICTIONAL ITAT, AHMEDABAD. THEREFO RE, THE ADDITIONS MADE BY THE A.O ARE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 5. THE SECOND GROUND OF APPEAL IS AGAINST THE ADDIT ION OF RS. 58,121/- MADE BY THE A.O BY CONSIDERING THE ADVANCE RECEIPTS FROM CUSTOMERS AND SALES AND WORKED OUT GP @ 5.43% ON THE SALES. THE APPELLANT CONTENDED THAT TH IS ADVANCE RECEIPTS HAVE BEEN SHOWN AS SALES IN THE NE XT FINANCIAL YEAR. THEREFORE, THE ADDITIONS MADE BY TH E A.O ARE NOT JUSTIFIED. ON GOING THROUGH THE FACTS OF THE CA SE, THE CONTENTION OF THE APPELLANT IS FOUND FACTUALLY CORR ECT. HENCE ADDITION OF RS. 58,121/- MADE BY THE ASSESSING OFFI CER IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. AS FAR AS FIRST ISSU E IS CONCERNED, WE FIND THAT IT IS SQUARELY COVERED IN FAVOUR OF THE A SSESSEE BY THE ORDER OF THE ITAT PASSED IN HER OWN CASE FOR THE AS STT.YEAR 2010- 11. COPY OF THAT ORDER HAS BEEN PLACED ON RECORD A S DISCERNIBLE FROM THE DISCUSSION EXTRACTED (SUPRA). THE ASSESSE E HAS BEEN CARRYING ON THE BUSINESS THROUGH AUTHORIZED REPRESE NTATIVE ITA NO.2314/AHD/2017 4 DEALERS. IN ORDER TO PROVIDE THEM VEHICLES FOR DISP LAY AND TEST DRIVING, IT USED TO TAKE SECURITY DEPOSITS. WHETHE R THOSE TRADE DEPOSITS ARE TO BE CONSIDERED AS PART OF SALE OR NO T AND OUGHT TO BE BROUGHT TO TAX, WAS THE ISSUE INVOLVED IN EARLIE R YEAR, WHEREIN IT HAS BEEN HELD THAT ADVANCE TAKEN IN THE SHAPE OF TRADE DEPOSITS WAS NOT TO BE TREATED AS REVENUE RECEIPTS. SIMILAR LY, WITH REGARD TO SECOND ISSUE, THE LD.CIT(A) HAS OBSERVED THAT TH ESE ADVANCE RECEIPTS FROM CUSTOMERS HAVE BEEN RECOGNIZED AS SAL E BY THE ASSESSEE, HENCE, NO ADDITION WOULD JUSTIFY ON THAT COUNT. AFTER GOING THROUGH WELL REASONED ORDER OF THE LD.CIT(A) WE DO NOT FIND ANY MERIT IN THIS APPEAL OF THE REVENUE. IT IS DIS MISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 15 TH JULY, 2019. SD/- SD/- (RIFAUR RAHMAN) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER