INCOME TAX OFFICER, Jaipur V. M/S N.S. PUBLICITY PVT. LTD., JAIPUR

ITA 271/JPR/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6260 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENAJCIT
• Assessee Lawyers: S L PODDAR; ISHA KANOONGO ADV DH
• Keywords: Reassessment proceedings
• Section: 143(3); 194C; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 271/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 INCOME TAX OFFICER, WARD 2(2), JAIPUR. CUKE VS. M/S N.S. PUBLICITY PVT. LTD., C-21, CHOMU HOUSE, SARDAR PATEL MARG, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCN 4202 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA(JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR & MS. ISHA KANOONGO (ADV) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/06/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 25/06/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 11/12/2017 OF LD. CIT(A)-I, JAIPUR FOR THE A.Y. 2010 -11. THE REVENUE HAS RAISED SOLE GROUND OF APPEAL, WHICH IS REPRODUCED AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A)-I, JAIPUR HAS ERRED IN- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD CIT(A) HAS JUSTIFIED IN ALLOWING THE APPEAL OF THE ASSESSEE AND DELETING THE ADDITION OF RS. 72,76,821/- MADE ON AC COUNT OF UNDISCLOSED RECEIPTS. ITA 271/JP/2018_ ITO VS M/S N.S. PUBLICITY PVT. LTD. 2 2. THE ASSESSEE IS A COMPANY AND ENGAGED IN THE BUSI NESS OF ADVERTISEMENT. THE ASSESSEE FILED ITS RETURN OF INCO ME FROM THE YEAR UNDER CONSIDERATION ON 15 TH OCTOBER, 2010 DECLARING TOTAL INCOME OF RS. 1,16,41,540/-. DURING THE SCRUTINY ASSESSMENT, THE ASSESSING OFFICER ASKED THE ASSESSEE TO RECONCILE THE GROSS RECEIPTS AS MEN TIONED IN THE BOOKS OF ACCOUNT WITH THAT OF THE 26AS. THE COMPLETED THE ASS ESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 21 ST JUNE, 2012 ACCEPTING THE RECONCILIATION FILED BY THE ASSESSMENT. HOWEVER, THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 OF THE ACT ON 31/3/2016. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER AGA IN RAISED THE ISSUE OF RECONCILIATION OF RECEIPTS AS PER THE BOOKS OF ACCO UNT AND AS PER 26AS, THE ASSESSEE EXPLAINED THE DISCREPANCY IN THE RECEIPTS BEING THE SERVICE TAX WHICH WAS NOT INCLUDED IN THE PART OF TURNOVER RECORD ED IN THE BOOKS OF ACCOUNT WHEREAS THE TDS WAS DEDUCTED BY THE PAYER ON T HE AMOUNT WHICH INCLUDES THE SERVICE TAX. THUS, THE ASSESSEE EXPLAIN ED BEFORE THE ASSESSING OFFICER THAT THE DISCREPANCY IS DUE TO SERVICE TAX PAYABLE AMOUNT OF RS. 1,61,36,763/- ON WHICH THE TDS WAS DEDUCTED. THE ASSESS ING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND MADE THE ADDITION OF RS. 72,76,821/- ON ACCOUNT OF UNDISCLOSED RECEIPTS. 3. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSI NG OFFICER BEFORE THE LD. CIT(A) AND FILED THE RECONCILIATION EXPLAINI NG THE REASONS FOR ITA 271/JP/2018_ ITO VS M/S N.S. PUBLICITY PVT. LTD. 3 DISCREPANCY IN THE RECEIPTS IN THE BOOKS OF ACCOUNT AND SHOWN IN THE 26AS BEING THE SERVICE TAX PAYABLE ON COLLECTION AND REC EIPT BASIS ON WHICH THE TDS WAS DEDUCTED AND THEREFORE, THE SAME AMOUNT WAS SH OWN AS PART OF GROSS RECEIPTS AS PER 26AS. THE LD. CIT(A) HAS ACCEP TED THE EXPLANATION AND RECONCILIATION AND CONSEQUENTLY DELETED THE ADD ITION. 4. BEFORE US, THE LD DR HAS REFERRED TO THE ASSESSM ENT ORDER AND SUBMITTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION O F SERVICE PAYABLE ON RS. 1,61,36,763/-, HOWEVER, THIS AMOUNT WAS NOT PAID TO CENTRAL EXCISE DEPARTMENT DURING THE YEAR UNDER CONSIDERATION AND THEREFORE, THE ASSESSEE HAS NOT CLAIMED THE DEDUCTION OF FULL AMOU NT IN THE P&L ACCOUNT. THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HA S NOT SHOWN IN THE SERVICE TAX RETURN THE AMOUNT WHICH IS ACTUAL RECEIP T OF THE ASSESSEE AND THERE ARE DISCREPANCIES IN THE RECEIPT SHOWN IN THE INCOME TAX RETURN AND IN SERVICE TAX RETURN. AS PER THE SERVICE TAX RETURN, THE ASSESSEE HAS SHOWN THE RECEIPT OF RS. 15,02,04,707/- WHEREAS AS PER THE BILL RAISED INCLUDING SERVICE TAX, THE AMOUNT IS RS. 20,52,54,497/-, THUS THERE IS ALSO A DISCREPANCY IN THE AMOUNT SHOWN IN THE SERVICE TAX RETURN AS AGAINST THE ACTUAL RECEIPT OF THE ASSESSEE. SHE RELIED ON THE O RDER OF THE ASSESSING OFFICER. ITA 271/JP/2018_ ITO VS M/S N.S. PUBLICITY PVT. LTD. 4 5. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS EXPLAINED THE DISCREPANCY DUE TO THE S ERVICE TAX INCLUDED IN THE GROSS RECEIPT WHEREAS THE ASSESSEE HAS SHOWN THE RECEIPTS IN THE BOOKS OF ACCOUNT EXCLUDING THE SERVICE TAX. FURTHER UP TO 31/3/2011, THE SERVICE TAX WAS PAYABLE ON COLLECTION/RECEIPT BASIS AND FROM 01/4/2011 THE SERVICE TAX HAS TO BE PAID IRRESPECTIVE OF THE FACT THAT WHE THER THE AMOUNT OF SERVICE TAX IS RECEIVED OR NOT. THEREFORE, THE ASSES SEE IS MAINTAINING ITS BOOKS OF ACCOUNT ON MERCANTILE BASIS AS PER THE INV OICE RAISED FOR SERVICE PROVIDED WHEREAS THE SERVICE TAX RETURN WERE FILED ON THE BASIS OF AMOUNT RECEIVE AGAINST THE SERVICED PROVIDED AND DUE TO TH IS DIFFERENCE, THERE IS A DISCREPANCY IN THE RECEIPTS RECOGNIZED BY THE ASSES SEE AND THE RECEIPTS SHOWN IN THE SERVICE TAX RETURN. HE HAS SUPPORTED TH E ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND CONSIDERED THE RELEVANT MATERIAL AVAILABLE ON THE R ECORD. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS EXPLAINED THE R EASONS FOR DISCREPANCY IN THE RECEIPTS SHOWN IN THE BOOKS OF ACCOUNT AS AG AINST 26AS STATEMENT BEING THE SERVICE TAX AMOUNT WAS PART OF THE RECEIPT AS PER 26AS STATEMENT WHICH WAS NOT PART OF THE RECEIPTS SHOWN IN THE BOOKS OF ACCOUNT. FURTHER THE ASSESSING OFFICER ALSO NOTED THAT THERE IS A DI SCREPANCY IN THE TOTAL RECEIPTS SHOWN BY THE ASSESSEE IN THE BOOKS AS PER B ILLS AND THE RECEIPTS SHOWN IN THE SERVICE TAX RETURN. HOWEVER, WE FIND THAT UP TO THE ITA 271/JP/2018_ ITO VS M/S N.S. PUBLICITY PVT. LTD. 5 ASSESSMENT YEAR UNDER CONSIDERATION, THE SERVICE TA X WAS TO BE PAID ON THE BASIS OF AMOUNT COLLECTED OR RECEIVED AND NOT ON TH E BASIS OF BILLS RAISED BY THE ASSESSEE INCLUDING THE SERVICE TAX. THEREFORE, I F THE ASSESSEE IS SHOWING THE TOTAL RECEIPTS IN THE BOOKS OF ACCOUNT ON THE B ASIS OF BILL RAISED AND THE SERVICE TAX RETURN WAS FILED ON THE BASIS OF AMOUNT COLLECTED OR ACTUAL RECEIPT THEN THE EXPLANATION OF THE ASSESSEE CANNOT BE FAULTED WITH IN RESPECT OF THE AMOUNT OF DIFFERENCE BETWEEN THE TOT AL RECEIPTS SHOWN IN THE BOOKS AND THE RECEIPTS SHOWN IN THE SERVICE TAX RET URN. THE ASSESSEE HAS FURNISHED RECONCILIATION EXPLAINING THE CAUSE OF DI SCREPANCY IN THE RECEIPT SHOWN IN THE 26AS STATEMENT AND THE LD CIT(A) HAS RE PRODUCED THE ENTIRE LIST OF 91 TRANSACTIONS WHERE THE TDS WAS DEDUCTED ON THE AMOUNT INCLUDING THE SERVICE TAX WHEREAS THE ASSESSEE HAS S HOWN THE RECEIPTS IN THE BOOKS EXCLUDING THE SERVICE TAX. THE LD. CIT(A) AFTER CONSIDERING THE RECONCILIATION AND EXPLANATION HAS ADJUDICATED THE ISSUE IN PARA 3.2.2. AS UNDER: 3.2.2 DETERMINATION : (I) I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE A PPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. THE APPELLANT WA S ENGAGED IN THE BUSINESS OF ADVERTISEMENT AND AS PER ITS PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION, IT HAS DECLARED ADVERTISE MENT SALES AT RS. 18,91,17,934/- WHEREAS AS PER THE ITS DETAILS, THE RECEIPTS BY THE APPELLANT WERE SHOWN AT RS. 19,42,22,978/- AND IN V IEW OF THIS DIFFERENCE, IT WAS OBSERVED BY THE AO THAT THE APPELLANT HAS SU PPRESSED ITS SALES TO ITA 271/JP/2018_ ITO VS M/S N.S. PUBLICITY PVT. LTD. 6 THE TUNE OF RS. 51,05,044/-. DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT HAS SUBMITTED A RECONCILIATION STATEMENT WHICH WAS REPRODUCED ON PAGE 2 OF THE ASSESSMENT ORDER. HOWEVER, THE AO WAS NOT SATISFIED WITH THE SAME AND OBSERVED AS UNDER: * THE APPELLANT HAS DISCLOSED TOTAL RECEIPTS IN THE SERVICE TAX RETURN FOR THE YEAR AT RS. 15,02,04,707/-. * THE BILLS INCLUDING SERVICE TAX WERE RAISED FOR A SUM OF RS. 20,52,54,497 /-. * THE TDS WAS DEDUCTED ON SERVICE TAX AMOUNT OF RS. 1 ,61,36,763/-. * THE APPELLANT HAS SHOWN DIFFERENT RECEIPTS IN INC OME TAX RETURN AND IN SERVICE TAX RETURN. * THE APPELLANT HAS CLAIMED THAT SOME PARTIES HAVE WRONGLY CREDITED THE AMOUNT IN ITS ACCOUNT BUT THE EVIDENCES WERE NO T PRODUCED. IN VIEW OF THE ABOVE OBSERVATIONS, IT WAS CONCLUDE D BY THE AO THAT THE APPELLANT HAS NOT DISCLOSED RECEIPTS TO THE TUNE OF RS. 72,76,821/-. (II) IT IS NOTED FROM THE FROM THE RECONCILIATION S TATEMENT THAT GROSS RECEIPTS SHOWN IN SERVICE TAX RETURN AND GROSS RECEIPTS SHOW N IN BOOKS OF ACCOUNTS ARE AS UNDER: AMOUNT FOR WHICH INVOICES ISSUED AS PER SERVICE TAX RETURN AMOUNT RECEIVED AGAINST SERVICE PROVIDED AS PER SERVICE TAX RETURN TOTAL 1,8,62,42,673/ - 15,02,04,707/ - LESS: CREDIT NOTE ISSUED DURING THE YEAR 40,90,034/ - - ADD: CREDIT NOTE REVERSED DURING THE YEAR 69,65,295/ - - ITA 271/JP/2018_ ITO VS M/S N.S. PUBLICITY PVT. LTD. 7 GROSS RECEIPT SHOWN IN BOOKS OF ACCOUNTS & GROSS RECEIPT SHOWN IN SERVICE TAX RETURN RESPECTIVELY. 18,91,17,933.97 15,02,04,707/ - (III) THUS, THE SAME AS PER BOOKS OF ACCOUNTS WAS M UCH MORE THEN THE SALES SHOWN IN THE SERVICE TAX RETURNS AND REASON FOR THE SAME WAS SUBMITTED THAT TILL 31.03.2011, THE SERVICE TAX WAS PAYABLE O N COLLECTION OR RECEIPT BASIS BUT W.E.F. 01.04.2011, SERVICE TAX HAS TO BE PAID IRRESPECTIVE OF THE FACT WHETHER THE PAYMENT OF THE SERVICE IS RECEIVED OR NOT. THE APPELLANT WAS MAINTAINING ITS BOOKS OF ACCOUNTS ON MERCANTILE BASIS I.E. ON THE BASIS OF INVOICES RAISED FOR SERVICE PROVIDED WHEREAS THE SERVICE TAX RETURNS WERE FILED ON THE BASIS OF AMOUNT RECEIVED AGAINST SERVICES PROVIDED AND DUE TO THIS DIFFERENCE IN ACCOUNTING TREATMENT, THE RE WAS A DIFFERENCE BETWEEN THE RECEIPTS DECLARED BY THE APPELLANT IN I TS RETURN OF INCOME AND IN THE SERVICE TAX RETURN. (IV) IT IS NOTED FROM THE PARTY-WISE DETAILS OF AMO UNT PAID / CREDITED AND TDS THEREON BY THE CUSTOMERS OF THE APPELLANT, PREPARED ON THE BASIS OF FORM 26AS AS ON 31.05.2017 THAT TOTAL AMOUNT FROM 91 PAR TIES WAS SHOWN AT RS. 19,81,98,545.18 ON WHICH TAX OF RS. 37,93,548.37 WA S DEDUCTED AT SOURCE. THE APPELLANT HAS ALSO FILED A RECONCILIATION OF RE CEIPTS AS PER 26AS WITH THAT OF RECEIPTS RECORDED IN THE BOOKS OF ACCOUNTS AS UNDER: S NO. PARTICULARS AMOUNT 1. RECEIPTS AS PER26AS U/S 194C 19,81 , 09,923.18 LESS: - SERVICE TAX INCLUDED IN RECEIPTS AS PER 26AS (1 ,61,36,563) NET RECEIPTS AS PER 26AS 18,19,73,360.18 RECEIPTS AS PER BOOKS OF ACCOUNTS EXCLUDING SERVICE TAX 18,91,17,934/ - THE AMOUNT PAID BY THE CUSTOMERS ON WHICH NO TDS WAS MADE. 71,44,574 ITA 271/JP/2018_ ITO VS M/S N.S. PUBLICITY PVT. LTD. 8 (V) THUS, IT IS EVIDENT FROM THE ABOVE DETAILS THA T THE APPELLANT HAS /DECLARED MORE RECEIPTS (REVENUE) THAN SHOWN IN 26AS AND IT I S ON ACCOUNT OF THE ELEMENT OF SERVICE TAX ON WHICH TDS WAS MADE BY THE CUSTOMERS/ DEDUCTOR OF THE APPELLANT, THE AMOUNT IN 26AS IS AP PEARING ON THE HIGHER SIDE. THEREFORE, IN VIEW OF THE TOTALITY OF FACTS A ND CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE AO WAS NOT JUSTIFIED IN M AKING IMPUGNED ADDITION UNDER CONSIDERATION AND THUS THE SAME IS HEREBY DEL ETED. THUS, IT IS CLEAR THAT THE LD. CIT(A) HAS CONSIDERED SPECIFIC FACT OF DISCREPANCY IN THE AMOUNT SHOWN IN THE 26AS IN COMP ARISON TO THE BOOKS OF ACCOUNT. THE BILLS INCLUDING SERVICE TAX WERE RAI SED AND THE TDS WAS DEDUCTED INCLUSIVE OF SERVICE TAX AMOUNT OF RS. 1,6 1,36,763/-. THE REVENUE HAS NOT BROUGHT ANY FACT OR MATERIAL TO CONTRADICT THE FACTUAL DETAILS RECORDED BY THE LD. CIT(A). ACCORDINGLY, WE DO NOT FI ND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A), THE SAME IS HEREBY UPHELD. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 25/06/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25 TH JUNE, 2018 *RANJAN ITA 271/JP/2018_ ITO VS M/S N.S. PUBLICITY PVT. LTD. 9 VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 2(2), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S N.S. PUBLICITY PVT. LTD., JAIPUR . 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 271/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR