Rajinder Kumar Jain, New Delhi V. ACIT, New Delhi

ITA 2485/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7099 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 11-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 23-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: ASHISH CHADHA
• Keywords: Reassessment proceedings
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NOS. 2485 TO 2488/DEL/2014 ASSESSMENT YEARS: 2005-06 TO 2007-08 & 2010-11 SH. RAJINDER KUMAR JAIN, VS. ASST. CIT, 8/149, AIRPORT HOTEL & RESTAURANT CIRCLE 27(1), NE W DELHI MERAM NAGAR, DELHI CANTT., NEW DELHI (PAN: AAFPJ2465B) (APPELLANT) (RESPONDENT) ASSESSEE BY : MR. VED JAIN, ADV. & SH. ASHISH CHADHA, CA REVENUE BY : SHRI FR MEENA, SR. DR DATE OF HEARING : 11-08-2016 DATE OF ORDER : 05-09-2016 ORDER PER H.S. SIDHU : JM ASSESSEE HAS FILED THESE 4 APPEALS AGAINST THE RESPE CTIVE IMPUGNED ORDERS ALL OF DATED 31.1.2014 PASSED BY THE LD. CIT(A)-XXIV, NEW DELHI RELEVANT TO ASSESSMENT YEARS 2005-06 TO 2007-08 & 2010-11 RESPECTIVELY. SINCE THE ISSUES INV OLVED IN THESE APPEALS ARE COMMON AND IDENTICAL, HENCE, THE AP PEALS WERE ITA NOS.2485-2488/DEL/2014 2 HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMM ON ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS RAISED BY THE A SSESSEE ARE MORE OR LESS SIMILAR AND IDENTICAL, THEREFORE, WE A RE REPRODUCING ONLY THE GROUNDS RAISED IN ITA NO. 2485/DEL/2014 (AY 2005-06) AS UNDER, AND DEALING WITH THAT APPEAL ONLY, FOR THE SA KE OF BREVITY. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ACTION OF THE AO IN INITIATING THE PROCEEDINGS UNDER SECTION 147, READ WITH SECTION 148, REJECTING THE CONTENTION OF THE ASSESSEE THAT THE SAME WAS BAD IN THE EYE OF LAW AS THE CONDITION AND PROCED URE PRESCRIBED UNDER THE STATUTE HAVE NOT BEEN SATISFIED A ND COMPLIED WITH. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE LEARNED A .O. ARE BAD IN THE EYE OF LAW AS THE REASONS RECORDED FO R THE ISSUE OF NOTICE UNDER SECTION 148 ARE BAD IN THE EYE OF LAW AND ARE CONTRARY TO THE FACTS. 4(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ITA NOS.2485-2488/DEL/2014 3 REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ORDER PASSED BY THE LEARNED AO IS BAD BOTH IN THE EYE OF LA W AND ON- FACTS AS THE SAME HAS BEEN REOPENED ON THE BASIS OF REASONS WITHOUT THERE BEING ANY WHISPER THAT THE INCOME HAS ESCAPED DUE TO THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACT S NECESSARY FOR ASSESSMENT, AS THE SAME HAS BEEN REOPENED AFTER A PERIOD OF FOUR YEARS FROM THE END O F RELEVANT ASSESSMENT YEAR AND THE ASSESSMENT HAS ALREADY BEEN MADE UNDER SECTION 143(3). (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ORDER PASSED BY THE LEARNED AO IS BAD BOTH IN THE EYE OF LA W AND ON FACTS, AS THE ASSESSEE HAD ALREADY DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSES SMENT UNDER SECTION 143(3). 5(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN RESTRICTING THE COMMISSION EXPENSES TO THE EXTENT OF 50% OF ROOM CHARGES AND CONFIRMING THE DISALLOWANCE OF THE BALANCE AMOUNT. (II) THE ABOVE-SAID DISALLOWANCE HAS BEEN CONFIRME D REJECTING THE DETAILED EXPLANATION AND EVIDENCES SUBMITTED BY THE ASSESSEE. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ITA NOS.2485-2488/DEL/2014 4 CONFIRMING THE DISALLOWANCE TO THE EXTENT OF 10% OF SERVICE CHARGES PAID BY THE ASSESSEE TO ITS EMPLOYEE S. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE STATED THAT ISSUES IN DISPUTE HAVE ALREADY BEEN ADJUDICATED AND DECIDED AGAINST THE ASSESSEE BY THE DECISION RENDERED BY THE ITAT, F BENCH, NEW DELHI IN ASSESSEES OWN CASE PASSED IN ITA NO. 2777 /DEL/2011 & ORS. (AY 2008-09) VIDE ORDER DATED 22.8.2014. T HEREFORE, HE REQUESTED THAT RESPECTFULLY FOLLOWING THE ITAT ORDER D ATED 22.8.2014, THE PRESENT 4 APPEALS OF THE ASSESSSEE MAY ALSO BE DISMISSED. IN THIS BEHALF, HE FILED THE COPY OF THE I TAT ORDER DATED 22.8.2014 IN ASSESSEES OWN CASE FOR THE AY 2008-09. 4. ON THE CONTRARY, LD. DR DID NOT HAVE ANY OBJECTION ON THE REQUEST OF THE ASSESSEES COUNSEL. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND THE ORDER DATED 22.8.2014 OF THE ITAT , F BENCH, ITA NOS.2485-2488/DEL/2014 5 NEW DELHI IN ASSESSEES OWN CASE PASSED IN ITA NO. 2777/DEL/2011 & ORS. (AY 2008-09) AND ITA NO.3109/DEL/2011. 5.1 WITH REGARD TO GROUND NO. 5 RELATING TO RESTRICTI ON OF COMMISSION EXPENSES IS CONCERNED, WE FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT, CITED SUPRA, IN ASS ESSEES OWN CASE IN THE ASSESSMENT YEAR 2008-09. IN ASSESSMENT YEAR 200 8-09, THE CIT(A) HAS RESTRICTED THE DISALLOWANCE TO 10% OF THE AC TUAL PAYMENT OF COMMISSION TO TAXIWALAS AS AGAINST 40% ESTIMATED BY THE ASSESSING OFFICER. THE ITAT VIDE PARA 9 UPHELD THE ORDER OF THE CIT(A)S ESTIMATION OF DISALLOWANCE TO 10% OF THE AC TUAL PAYMENT OF COMMISSION TO TAXIWALAS AS AGAINST 40% DISALLOWED BY THE ASSESSING OFFICER. THE PARA 9 OF THE AFORESAID ITAT ORDER IS REPRODUCED BELOW :- 9. AS DISCUSSED ABOVE, THE FIRST APPELLATE ORDER ON THE ISSUE IS COMPREHENSIVE AND REASONED ONE, HENCE, WE ARE NOT INCLINED TO INTERFERE THEREWITH. LEARNED CIT(APPEALS)'S ESTIMATION OF DISALLOWANCE TO 10% OF ACTUAL PAYMENT OF COMMISSION TO TAXIWALAS AS AGAINST 40% DISALLOWED BY THE ASSESSING OFFICER IS BASED ON THE REASONS DISCUSSED BY HIM TO WHICH WE FULLY CONCUR W ITH. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHE LD. ITA NOS.2485-2488/DEL/2014 6 GROUND NO.2 OF THE APPEAL PREFERRED BY THE ASSESSEE AND GROUND NO.1 OF THE APPEAL FILED BY THE REVENUE ON TH E ISSUE ARE THUS REJECTED. 5.2 FACTS AND CIRCUMSTANCES REMAIN THE SAME IN THIS ASSESSMENT YEAR ALSO, HENCE, RESPECTFULLY FOLLOWING THE ABOVE ITAT DECISION, THE GROUND NO.5 OF ASSESSEES APPEAL IS REJECTED. 5.3 WITH REGARD TO GROUND NO. 6 RELATING TO SERVICE CHARGES IS CONCERNED, WE FIND THAT THIS ISSUE HAS TRAVELLED TO THE ITAT IN ASSESSEES OWN CASE IN THE ASSESSMENT YEAR 2008-09 IN ITA NO.2777/DEL/2011 AND ITA NO.3109/DEL/2011 AND THE IT AT VIDE ITS ORDER DATED 22.08.2014 RESTRICTED THE DISALLOWANCE OF 10% OF THE ACTUAL PAYMENTS OF SERVICE CHARGES. THE RELEVANT PAR A 14 OF THE ITAT ORDER IS REPRODUCED BELOW :- 14. WE FIND THAT THE PRACTICE OF PAYMENT OF SERVICE CHARGES TO STAFF PREVAILING IN THE TRADE HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER. THE ONLY DISPUTE WA S THE GENUINENESS OF THE CLAIMED PAYMENT. THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF THE ACTUAL PAYMEN T OF SERVICE CHARGES AND DISALLOWED THE ENTIRE CLAIM RESULTING IN THE ADDITION OF RS.37,80,412. LEARNED CIT(APPEALS), HOWEVER, KEEPING IN VIEW THE PRACTICE ITA NOS.2485-2488/DEL/2014 7 FOLLOWED BY THE ASSESSEE OVER THE YEARS WHICH WERE ACCEPTED BY THE ASSESSING OFFICER IN THE PAST IN THE ASSESSMENT FRAMED UNDER SEC. 143(3) OF THE INCOME-TAX ACT, 1961 AND KEEPING IN MIND OTHER FACTORS, AS DISCUSSED ABOVE, HAS GIVEN RELIEF BY RESTRICTING TH E DISALLOWANCE TO 10% OF ACTUAL PAYMENT OF SERVICE CHARGES RESULTING IN RESTRICTION OF DISALLOWANCE TO RS.3,78,041. AS DISCUSSED ABOVE, WE FIND THAT THE SAID ACTION OF THE FIRST APPELLATE AUTHORITY IN GIVING SUBST ANTIAL RELIEF TO THE ASSESSEE IS BASED ON SUFFICIENT REASONS DISCUSSED BY HIM IN HIS FINDINGS REPRODUCED ABOVE T O WHICH WE FULLY CONCUR WITH. WE, THUS, DO NOT FIND AN Y REASON TO INTERFERE THEREWITH. THE SAME IS UPHELD. GROUND NO.3 OF THE APPEAL PREFERRED BY THE ASSESSEE AND GROUND NO.2 OF THE APPEAL FILED BY THE REVENUE ARE THU S REJECTED. 5.4 FACTS AND CIRCUMSTANCES REMAIN THE SAME IN THE PRESENT ASSESSMENT YEAR, HENCE, RESPECTFULLY FOLLOWING THE AF ORESAID DECISION OF THE ITAT, WE REJECT THE ISSUE NO. 6 IN THE ASSESSEES APPEAL. ITA NOS.2485-2488/DEL/2014 8 6. WITH REGARD TO ITA NOS. 2486 TO 2488/DEL/2014 (AYRS. 2006-07 TO 2007-08 & 2010-11) ARE CONCERNED, RESPECTFULLY FOLLOWING THE CONSISTENT VIEW AS TAKEN BY US IN ITA NO . 2485/DEL/2014 (AY 2005-06), AS AFORESAID, THE GROUND S RAISED BY THE ASSESSEE IN ITA NOS. 2486 TO 2488/DEL/2014 (AYRS. 2006-07 TO 2007-08 & 2010-11) ARE ALSO REJECTED. 7. IN THE RESULT, ALL THE 4 APPEALS FILED BY THE ASSES SEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/09/2016. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 05/9/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES