ITO, New Delhi V. M/s. Mona Trends (P) Ltd., Delhi

ITA 2412/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4992 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 21-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.2412/DEL/2017 ASSESSMENT YEAR : 2012-13 ITO, WARD 17(1), CR BUILDING, NEW DELHI. VS. MONA TRENDS (P) LTD., A-37/2, MAYAPURI INDUSTRIAL AREA, DELHI. PAN: AAFCM2476E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK KHANDELWAL, CA DEPARTMENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 28.08.2017 DATE OF PRONOUNCEMENT : 28.08.2017 ORDER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE CIT(A) ON 01.02.2017 IN RELATION TO A SSESSMENT YEAR 2012-13. ITA NO.2412/DEL/2017 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAIN ST THE DELETION OF ADDITION OF RS.42,26,585/- MADE BY THE ASSESSING OF FICER AFTER REJECTING THE BOOKS OF ACCOUNT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED RETURN DECLARING NIL INCOME, HOWEVER PAYING TAX ON BOOK PR OFIT U/S 115JB OF THE ACT AT RS.1,80,792. ON PERUSAL OF THE DETAILS, IT WAS OBSERVED THAT THERE WAS INCREASE IN POWER/ FUEL AND ELECTRICITY/ WATER CHARGES FROM THE PRECEDING YEAR (RS.13,88,518/-) TO THE CURRENT YEAR (RS.16,92,592/-). IT WAS OBSERVED THAT THE ASSESSEES BUSINESS HAD CO ME DOWN INASMUCH AS THE TURNOVER DECLARED IN THE PREVIOUS YEAR AMOUNTIN G TO RS.1.49 CRORE WAS NIL IN THE CURRENT YEAR AND THE JOB WORK CHARGE S WERE REDUCED FROM RS.69.97 LAC TO RS.43.04 LAC. ON BEING CALLED UPON TO EXPLAIN AS TO WHY THE ADDITION BE NOT MADE BY ESTIMATING INCOME ON TH E BASIS OF ELECTRICITY AND WATER CHARGES, THE ASSESSEE SUBMITTED THAT DURI NG THE PRECEDING YEAR, THE JOB WORK WAS GOT DONE MAINLY FROM OUTSIDE PARTI ES FOR WHICH IT PAID JOB WORK CHARGES TO THE TUNE OF RS.1.06 CRORE. IN THE INSTANT YEAR, THE ASSESSEE GOT THE ENTIRE WORK DONE AT ITS FACTORY PR EMISES ITSELF. NOT ITA NO.2412/DEL/2017 3 CONVINCED, THE ASSESSING OFFICER COMPARED ELECTRICI TY AND WATER CHARGES FOR THE YEAR UNDER CONSIDERATION AND PRECEDING YEAR AND, ACCORDINGLY, MADE ADDITION TOWARDS UNDISCLOSED JOB WORK TO THE T UNE OF RS.42,26,585/- ON ESTIMATE BASIS. THE LD. CIT(A) DE LETED THE ADDITION. 4. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELE VANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSESSING OFFICER H AS BASED THE ADDITION ONLY ON HIGHER ELECTRICITY CHARGES INCURRED DURING THE CURRENT YEAR WITHOUT CONSIDERING THAT IN THE PRECEDING YEAR THE ASSESSEE WAS GETTING JOB WORK DONE FROM OUTSIDE PARTIES FOR WHICH EXPENS ES TO THE TUNE OF RS.1.06 CRORE WERE INCURRED. AS AGAINST THIS, THE ENTIRE WORK WAS DONE IN-HOUSE BY INCURRING ADDITIONAL ELECTRICITY AND WA TER CHARGES TO THE TUNE OF RS.3.04 LAC ONLY. SUCH CONTENTION OF THE ASSESS EE RAISED BEFORE THE ASSESSING OFFICER HAS NOT BEEN CONTROVERTED. IT IS FURTHER SEEN FROM THE IMPUGNED ORDER THAT THE ASSESSEE WAS SUPPOSED TO PA Y MINIMUM ELECTRICITY CHARGES EVEN DURING THE MONTHS IN WHICH NO JOB WORK WAS DONE. IN MY CONSIDERED OPINION, THE LD. CIT(A) HAS RIGHTLY APPRECIATED THE FACTS AND DELETED THE ADDITION AS THE SAME IS BASED ONLY ON THE BASIS ITA NO.2412/DEL/2017 4 OF MATHEMATICAL EXERCISE DONE BY THE AO WITHOUT CON SIDERING THE RELEVANT FACTS. THE RELIANCE OF THE LD. DR ON THE JUDGMENT IN CST VS. H M ESUFALI H M ABDULALI (1973) 90 ITR 271 (SC) IS MISCONCEIVED. IN THAT CASE, THE ESTIMATE OF TURNOVER FOR A PARTICULAR PER IOD WAS APPROVED WHEN THE ASSESSEE WAS FOUND TO BE INDULGING IN NOT DISCL OSING PROPER AMOUNT OF TURNOVER FOR THE OTHER PERIOD. THIS JUDGMENT HAS ABSOLUTELY NO MATCH INASMUCH AS THERE IS NO FINDING BY THE AO THAT THE ASSESSEE WAS ACTUALLY FOUND TO BE INDULGING IN DISCLOSING IMPROPER TURNOV ER FOR SOME PERIOD. I, THEREFORE, UPHOLD THE IMPUGNED ORDER IN DELETING TH E ADDITION, WHICH HAS NO BASIS AT ALL. 5. IN THE RESULT, THE APPEAL FILED BY THE REV ENUE IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 8 TH AUGUST, 2017. SD/- [R.S. SYAL] VICE PRESIDENT DATED, 28 TH AUGUST, 2017. DK ITA NO.2412/DEL/2017 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.