Kunal Chaturbhuj Nagrani, Ahmedabad V. The DCIT, Circle-6(1), Ahmedabad

ITA 2648/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9394 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-09-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 30-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: H V GANDHI

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.2648/AHD/2017 / ASSTT.YEAR : 2012-2013 KUNAL CHATURBHUJ NAGRANI PROP. RYAN INTERNATIONAL 8, RAMESHWAR PARK SOCIETY B/H. NARAIN SOCIETY MANINAGAR, AHMEDABAD 380 008. PAN : ACIPN 5122 G VS. DCIT, CIR.6(1) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI H.V. GANDHI, AR REVENUE BY : SHRI MUDIT NAGPAL, SR.DR / DATE OF HEARING : 23/09/2019 / DATE OF PRONOUNCEMENT: 24/09/2019 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)- 6, AHMEDABAD PASSED FOR THE ASSESSMENT YEAR 2012-13 . 2. GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF THE INCOME TAX RULES, 1963 THEY ARE DES CRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, GRIEVANCE OF THE ASSESSEE REVOLVES AROUND TWO FOLD ISSUES VIZ. (A) THE LD.CIT(A) HAS ERRED IN CONFIRMING REOPENING OF THE ASSESSMENT, (B) THE LD.CIT(A) HAS ERRED IN CONF IRMING THE ADDITION OF RS.93,84,075/-. ITA NO.2648/AHD/2017 2 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. AS FAR AS REOPENING OF THE ASSESSMENT IS CONCERNED, NO ARGUMENTS WERE ADVANCED ON THIS POINT. HENCE, T HIS GROUND OF APPEAL IS REJECTED. 4. WITH REGARD TO THE ADDITION OF RS.93,84,075/- IS CONCERNED, THE CASE OF THE ASSESSEE IS THAT IT IS PROVIDING BPO SERVICE S. IT HAS RAISED BILL TO SUCHITRA ENTERPRISES. ACCORDING TO THE AO, INVOICE RAISED IN FEBRUARY AND MARCH,2 011 AND RECEIVED PAYMENT AFTER MARCH, 2011 OUGHT TO BE RECOGNIZED IN THE ASSTT.YEAR 2012-13, SINCE THE ASS ESSEE HAS RECOGNIZED THE INCOME OF THESE INVOICE FOR ASSTT.YEAR 2011-12 BY E NHANCING ITS DEDUCTION UNDER SECTION 10A OF THE ACT. THEREFORE, THE LD.AO HAS REOPENED THE ASSESSMENT AND REDUCED DEDUCTION ADMISSIBLE IN THE ASSTT.YEAR 2011-12. HE ADDED THIS RECEIPT IN THE ASSTT.YEAR 2012-13. 5. SHORT QUESTION BEFORE US IS, WHETHER A SUM OF RS .93,84,075/- IS ASSESSABLE TO TAX IN THE ASSTT.YEAR 2012-13 OR IN T HE ASSTT.YEAR 2011-12, THE STAND OF THE REVENUE IS THAT THIS RECEIPT IS TAXABL E IN THE ASSTT.YEAR 2012- 12, WHEREAS THE STAND OF THE ASSESSEE IS THAT THESE ARE ASSESSABLE IN THE ASSTT.YEAR 2011-12. THIS ISSUE HAS COME UP BEFORE THE TRIBUNAL IN THE ASSTT.YEAR 2011-12. THE TRIBUNAL HAS HELD IN ITA NO .1068/AHD/2016 THAT THIS RECEIPT IS ASSESSABLE IN THE ASSTT.YEAR 2011-1 2, AND THE ASSESSEE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 10A ON TH ESE RECEIPTS. THE RELEVANT FINDING OF THE TRIBUNAL READS AS UNDER: 8.2. WE SHALL FIRST ADDRESS OURSELVES TO THE FIRST OBJECTION OF THE ASSESSING OFFICER TOWARD CREDIBILITY OF EXPORT TURN OVER DECLARED AND CONSEQUENT EXPORT PROFIT FLOWING THEREFROM. ON A PERUSAL OF ITA NO.2648/AHD/2017 3 THE ASSESSMENT ORDER, IT APPEARS THAT THE ASSESSING OFFICER WAS MAINLY GUIDED BY THE FACT THAT WHILE THE ASSESSEE H AS RECEIVED PAYMENT AGAINST ALL INVOICES RAISED IN OTHER MONTHS AS TO INSTANTLY WITH NO OUTSTANDING, THE ASSESSEE HAS NOT RECEIVED ANY PAYMENT AGAINST TWO ADDITIONAL INVOICES RAISED IN F EB-2011 & MARCH-2011 OF USD 104850 EACH EQUIVALENT TO RS.93,8 4,075/- IN AGGREGATE. THE ASSESSING OFFICER HAS NARRATED SU SPICIOUS CIRCUMSTANCES FOR NON-ACCRUAL OF INCOME IN THE FY 2 010-11. IT IS THE CASE OF THE ASSESSING OFFICER THAT THE INVOICES , IN FACT, RELATE TO SUBSEQUENT ASSESSMENT YEAR AND HAS BEEN MERELY P REDATED TO CLAIM WRONGFUL EXEMPTION UNDER S.10A BEING THE LAST YEAR OF ELIGIBILITY. THE ASSESSING OFFICER COMPUTED THE GRO SS PROFITS RELATING TO THIS YEAR AND THE SUBSEQUENT YEAR TO PR OP UP ITS CASE AGAINST THE ASSESSEE. IT IS THE CASE OF ASSESSING O FFICER WHILE THE TWO INVOICES ONCE TAKEN INTO ACCOUNT IN SUBSEQUENT YEAR, THE REALIGNED GP WOULD BE SOMEWHAT SIMILAR. 8.3. ON OBJ ECTIVE CONSIDERATION, WE NOTE THAT WHILE IT IS FACTUALLY C ORRECT THAT PAYMENT FOR TWO INVOICES WERE NOT RECEIVED IN THE S AME MANNER AS WAS RECEIVED FOR OTHER INVOICES RAISED TO ITS CU STOMER, NAMELY; M/S.SUCHITA ENTERPRISE INC. THIS ABERRATION , IN OUR VIEW, CANNOT BE A GROUND FOR DOUBTING THE INVOICES ITSELF . THE ASSESSEE HAS DEMONSTRATED FROM THE BANK REALIZATION CERTIFI CATES (BRCS) ISSUED BY THE BANK THAT THE ASSESSEE HAS REC EIVED CONSIDERATION AGAINST THE SERVICES RENDERED FOR THE PERIOD SPECIFIED THEREIN WHICH FALLS IN THE FY 2010-11. SI MPLY BECAUSE THE PAYMENT HAS BEEN RECEIVED IN THE SUBSEQUENT YEA R WOULD NOT TANTAMOUNT TO DEFERRAL OF ACCRUAL OF INCOME ALSO TO THE SUBSEQUENT YEAR. MERELY BECAUSE THE DEDUCTION UNDER S.10A COMES TO AN END IN THIS YEAR SHOULD NOT NECESSARILY TRIGGER UNWARRANTED SUSPICION AGAINST THE ASSESSEE. THE CAS E MADE OUT BY THE ASSESSING OFFICER TOWARDS FALL IN GROSS PROF IT ETC. IS REFUTABLE. IT IS DIFFICULT TO DISLODGE THE CLAIM OF THE ASSESSEE BASED ON SUCH SHALLOW EVIDENCES. THE ASSESSEE, ON T HE OTHER HAND, REQUIRES TO BE BELIEVED ON ACCOUNT OF REPORTI NG THE TRANSACTIONS IN SOFTEX FORM WITH STPI INCLUDING THI S TURNOVER AS WELL AS IN THE LIGHT OF BANK REALIZATION CERTIFI CATES PLACED ON RECORD. THE ADJUSTMENT MADE BY THE ASSESSING OFFICE R TOWARDS ITA NO.2648/AHD/2017 4 REDUCTION OF EXPORT TURNOVER AND EXPORT PROFITS IS THUS REQUIRES TO BE DISCARDED. 6. SINCE RECEIPTS HAVE ALREADY BEEN TAXED IN THE AS STT.YEAR 2011-12, THEY CANNOT BE TAX AGAIN THE ASSTT.YEAR 2012-13. W E ALLOW THIS FOLD OF GRIEVANCE AND DELETE THE IMPUGNED ADDITION. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 24 TH SEPTEMBER, 2019 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) JUDICIAL MEMBER