RISK DESIGN AND ADVERTISING LTD, MUMBAI V. DCIT CC 38, MUMBAI

ITA 2332/MUM/2012

• Counselvise Citation: 233219914 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: DR P DANIEL
• Section: 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.2304 AND 2332/MUM/2012 ( / ASSESSMENT YEARS : 2005-06 AND 2008-09) M/S RISK DESIGN AND ADVERTISING LTD., PLOT NO.8, SHAH INDUSTRIAL ESTATE, OFF VEERA DESAI ROAD, ANDHERI (W), MUMBAI-400053 / VS. THE DY. COMMISSIONER OF INCOME TAX CC 38, MUMBAI. ( / APPELLANT) .. ( ! / RESPONDENT) ./ '# ./ PAN/GIRNO.:AACCD0946R $ / APPELLANT BY : DR.P.DANIEL ! % $ /RESPONDENT BY SHRI VIJAY KUMAR BORA & ' % ( ) / DATE OF HEARING : 29.10.2014 *+ % ( ) /DATE OF PRONOUNCEMENT : 10.11.2014. / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE ORDERS PASSED BY LD CIT(A)-41, MUMBAI AND THEY RELATE TO T HE ASSESSMENT YEARS 2005- 06 AND 2008-09. 2. IN ASSESSMENT YEAR 2005-06, THE ASSESSEE IS AGGR IEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.1.00 CRO RE MADE BY THE ASSESSING OFFICER. 3. THE FACTS RELATING THE ABOVE SAID ISSUE ARE DI SCUSSED IN BRIEF. THE REVENUE CARRIED OUT SURVEY OPERATION U/S 133A OF TH E ACT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 12.09.2007. AT THAT PO INT OF TIME, THE DIRECTORS OF THE ASSESSEE COMPANY AGREED TO OFFER RS.7.00 CRORES IN THE NAME OF GROUP COMPANIES/INDIVIDUALS. ACCORDINGLY, A SUM OF RS.3. 60 CRORES WAS DECLARED IN THE ITA NO.2304 & 2332/M/2012 2 HANDS OF THE ASSESSEE COMPANY. ACCORDING TO THE AS SESSEE, THE ABOVE SAID AMOUNT WAS OFFERED IN TWO DIFFERENT ASSESSMENT YEAR S, VIZ., A SUM OF RS.2.60 CRORES WAS DECLARED IN AY 2006-07 AND RS.1.00 CRORE WAS DECLARED IN AY 2008- 09. HOWEVER, THE AO TOOK THE VIEW THAT THE OFFER O F RS.1.00 CRORE SHOULD HAVE BEEN OFFERED BY THE ASSESSEE IN AY 2005-06. EVEN T HOUGH, THE ASSESSEE CLAIMED THAT IT HAD OFFERED THE ABOVE SAID AMOUNT I N AY 2008-09, YET THE AO DID NOT ACCEPT THE SAME ON THE REASONING THAT THE ASSES SEE HAD DECLARED THE ADDITIONAL INCOME IN ITS PROFIT AND LOSS ACCOUNT UN DER THE HEAD PRIOR YEAR ADJUSTMENTS AND FURTHER THE ASSESSEE HAS NOT RETRA CTED FROM THE STATEMENT GIVEN BY THE DIRECTORS. ACCORDINGLY, HE ASSESSED T HE AMOUNT OF RS.1.00 CRORE IN THE HANDS OF THE ASSESSEE. THE LD CIT(A) CONFIRMED THE ADDITION WITH THE OBSERVATION THAT THE ENTRIES FOUND IN THE IMPOUNDED DOCUMENTS PERTAINING TO RS.1.00 CRORE RELATE TO THE AY 2005-06. 4. THE LD COUNSEL FOR THE ASSESSEE INVITED OUR ATT ENTION TO THE ORDER DATED 25.11.2013 PASSED BY LD CIT(A)-41 MUMBAI IN THE APP EAL NO. CIT(A)-41/ACCC- 38/IT-64/12-13 PASSED IN THE HANDS OF THE ASSESSEE AGAINST THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT FOR AY 2005-06, WHI CH IS PLACED AT PAGES 211 TO 219 OF THE PAPER BOOK FILED BY THE ASSESSEE. THE L D A.R SUBMITTED THAT THE LD CIT(A), IN THE APPELLATE PROCEEDINGS AGAINST THE PE NALTY ORDER, CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER, WHO SUBMI TTED COPIES OF IMPOUNDED MATERIALS TO LD CIT(A). THE LD A.R SUBMITTED THAT T HE LD CIT(A) HIMSELF EXAMINED THE SAME AND HAS GIVEN FINDING THAT THE IM POUNDED MATERIAL DOES NOT BRING OUT ANY EVIDENCE TO SHOW THAT CASH EXPENSES O F RS.1 CRORE WERE INCURRED BY THE ASSESSEE DURING AY 2005-06. LATER THE AO AL SO FURNISHED A LETTER DATED 31.10.2013 TO LD CIT(A), WHEREIN THE ASSESSING OFFI CER HAS STATED THAT AFTER PERUSAL OF THE IMPOUNDED DOCUMENTS, NO SPECIFIC IND ICATION HAS BEEN FOUND REGARDING DETAILS OF CASH EXPENSES OF RS.1 CRORE ON INTERIOR WORK. THE MATTER MAY BE DECIDED ON MERITS. IN VIEW OF THE SPECIFIC FINDING GIVEN BY LD CIT(A), THE LD A.R SUBMITTED THAT THE ADDITION OF RS.1.00 C RORE IS LIABLE TO DELETED. 5. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE HAD DECLARED THE AMOUNT OF RS.1.00 CRORE AS PRIOR PERIOD ADJUSTMENT IN THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31.3.2008, MEANING THER EBY, IT COULD NOT RELATE TO THE FY 2007-08 RELEVANT TO THE ASSESSMENT YEAR 2008-09. ACCORDINGLY, HE SUBMITTED ITA NO.2304 & 2332/M/2012 3 THAT THE AO HAS ASSESSED THE AMOUNT OF RS.1.00 CROR E IN AY 2005-06, SINCE THE INCOME PERTAINING TO ONE YEAR CANNOT BE ASSESSED IN ANOTHER YEAR. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E RECORD. FROM THE SUBMISSIONS MADE BY LD A.R, WE NOTICE THAT THE LD C IT(A) HAS GIVEN A CLEAR FINDING IN THE PENALTY PROCEEDINGS THAT THE IMPOUND ED MATERIAL DOES NOT BRING OUT ANY EVIDENCE TO SHOW THAT THE CASH EXPENSES OF RS.1 .00 CRORE WERE INCURRED BY THE ASSESSEE DURING AY 2005-06. LATER, THE ASSESSI NG OFFICER HAS ALSO CONFIRMED THIS FACT, VIDE HIS LETTER DATED 31.10.2013. ON A PERUSAL OF THE ORDER DATED 25.11.2013 PASSED BY THE LD CIT(A) IN THE PENALTY P ROCEEDINGS, WE NOTICE THAT THE RELEVANT DISCUSSIONS ARE MADE IN PARAGRAPH 4.3. 1 OF THE ORDER. THE FINDING GIVEN BY LD CIT(A) IN PENALTY PROCEEDINGS CLEARLY B RING OUT THAT THERE IS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAD INCURRED EXP ENDITURE OF RS.1.00 CRORE IN THE YEAR RELEVANT TO AY 2005-06. FURTHER THE ASSES SEE HAS ALREADY OFFERED THE ABOVE SAID AMOUNT OF RS.1.00 CRORE IN AY 2008-09, W HICH WE FIND FROM THE COPIES OF RETURNS OF INCOME FILED FOR THAT YEAR AND WHICH ARE PLACED AT PAGES 4 21 OF THE PAPER BOOK FILED FOR AY 2008-09. ACCORDI NGLY, WE ARE OF THE VIEW THAT THERE IS NO JUSTIFICATION IN ASSESSING THE AMOUNT O F RS.1.00 CRORE IN AY 2005-06. THOUGH THE LD D.R CONTENDED THAT THE ASSESSEE HAD D ISCLOSED THE ABOVE SAID AMOUNT UNDER THE HEAD PRIOR PERIOD ADJUSTMENTS, I N OUR VIEW THE SAME DOES NOT MAKE ANY DIFFERENCE SO FAR AS TAXATION IS CONCERNED . ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.1.00 CRORE MADE IN AY 2005-06. 7. WE SHALL NOW TAKE UP THE APPEAL FILED FOR AY 20 08-09. IN THIS YEAR, THE ASSESSEE IS CONTENDING THE VALIDITY OF ASSESSING TH E AMOUNT OF RS.1.00 CRORE, SINCE THE SAID AMOUNT HAS ALREADY BEEN ASSESSED IN AY 2005-06. IT IS NOTICED THAT THE ASSESSEE IS RAISING THIS GROUND ON THE GRO UND THAT THE ASSESSING OFFICER HAS ASSESSED THE SAME AMOUNT TWICE IN TWO DIFFERENT ASSESSMENT YEARS. WHILE CONSIDERING THE APPEAL FILED BY THE ASSESSEE FOR AS SESSMENT YEAR 2005-06, WE HAVE DELETED THE ADDITION OF RS.1.00 CRORE MADE IN THAT YEAR. HENCE, THE ASSESSEE SHOULD NOT HAVE ANY GRIEVANCE IN ASSESSING THE SAID AMOUNT IN AY 2008-09, SINCE THE ASSESSEE ITSELF OFFERED THE SAME IN THAT YEAR. ACCORDINGLY, WE DISMISS THE GROUND OF THE ASSESSEE. ITA NO.2304 & 2332/M/2012 4 8. THE ASSESSEE HAS ALSO RAISED ONE MORE GROUND R ELATING TO THE ASSESSMENT OF RS.2.60 CRORES. BUT FROM THE ASSESSM ENT ORDER, WE DO NOT FIND ANY ADDITION RELATING TO THE SAME. THE LD A.R SUBM ITTED THAT THE ASSESSEE HAS OFFERED THE ABOVE SAID AMOUNT OF RS.2.60 CRORES IN AY 2006-07. SINCE THERE IS NO ADDITION PERTAINING TO THIS AMOUNT ISMADE IN THI S YEAR, WE DO NOT FIND IT NECESSARY TO ADJUDICATE THIS GROUND. ACCORDINGLY, THIS GROUND IS ALSO DISMISSED, BEING NOT RELEVANT. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE FOR AY 2005-06 IS ALLOWED AND THE APPEAL FILED FOR AY 2008-09 IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10TH NOV, 2014 . *+ & , -. / 0 10TH NOV , 2014 + % 1' 2 SD SD ( . . / H.L. KARWA) ( . . ,/ B.R. BASKARAN) / PRESIDENT / ACCOUNTANT MEMBER - & ' MUMBAI: 10TH NOV,2014. . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. & 3( ( ) / THE CIT(A)- CONCERNED 4. & 3( / CIT CONCERNED 5. 6. 45 1 (6 , ) 6 , - & ' / DR, ITAT, MUMBAI CONCERNED 1 7 ' / GUARD FILE. TRUE COPY 8 & / BY ORDER, 9 ' (ASSTT. REGISTRAR) ) 6 , - & ' /ITAT, MUMBAI