M/s Transtron Electricals Pvt. Ltd., Meerut V. CIT, Meerut

ITA 2765/DEL/2013

• Counselvise Citation: 276520114 RSA 2013
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 08-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MODI
• Assessee Lawyers: P S KASHYAP
• Keywords: Depreciation
• Section: 263; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH H HH H : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 2765/DEL/2013 2765/DEL/2013 2765/DEL/2013 2765/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008 - -- - 09 0909 09 M/S TRANSTRON ELECTRICALS M/S TRANSTRON ELECTRICALS M/S TRANSTRON ELECTRICALS M/S TRANSTRON ELECTRICALS PRIVATE LIMITED, PRIVATE LIMITED, PRIVATE LIMITED, PRIVATE LIMITED, A AA A- -- -1, IND 1, IND 1, IND 1, INDUSTRIAL ESTATE, USTRIAL ESTATE, USTRIAL ESTATE, USTRIAL ESTATE, PARTAPUR, PARTAPUR, PARTAPUR, PARTAPUR, MEERUT MEERUT MEERUT MEERUT 250 103 (U.P.). 250 103 (U.P.). 250 103 (U.P.). 250 103 (U.P.). PAN : AABCT5407G. PAN : AABCT5407G. PAN : AABCT5407G. PAN : AABCT5407G. VS. VS. VS. VS. COMMISSION OF INCOME TAX, COMMISSION OF INCOME TAX, COMMISSION OF INCOME TAX, COMMISSION OF INCOME TAX, AAYAKAR BHAWAN, AAYAKAR BHAWAN, AAYAKAR BHAWAN, AAYAKAR BHAWAN, MEERUT. MEERUT. MEERUT. MEERUT. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.S. KASHYAP, CA. RESPONDENT BY : SHRI O.P. MODI, CIT - DR. DATE OF HEARING : 11.09.2015 11.09.2015 11.09.2015 11.09.2015 DATE OF PRONOUNCEMENT : 05.10.2015 05.10.2015 05.10.2015 05.10.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2008-09 IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX, MEERUT DATED 25 TH MARCH, 2013. 2. THE EFFECTIVE GROUND OF APPEAL OF THE ASSESSEE I S GROUND NO.1, WHICH READS AS UNDER:- THAT THE LEARNED COMMISSIONER OF INCOME-TAX ERRED IN LAW AND ON THE FACTS INVOKING THE PROVISIONS OF SECTION 263 OF THE INCOME-TAX ACT, 1961 AND PASSING THE ORDER DATE D 25.03.2013. THE ORDER PASSED AND VARIOUS DIRECTION S GIVEN ARE BAD IN LAW, ARBITRARY, ERRONEOUS, ILLEGAL AND UNWARRANTED IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE MATERIAL ON RECORD. THE ORDER, THEREF ORE, DESERVES TO BE QUASHED. ITA-2765/DEL/2013 2 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS AN APPEAL AGAINST THE ORDER OF LEARNED CIT PASSED U/S 263 OF THE INCOME- TAX ACT, 1961. HE SUBMITTED THAT THE LEARNED CIT H AS EXERCISED HIS JURISDICTION U/S 263 OF THE ACT WITH REGARD TO THRE E ISSUES RECORDED IN PARAGRAPH 6 OF THE IMPUGNED ORDER, WHICH IS REPRODU CED HEREUNDER:- 6. ACCORDINGLY, NOTICE UNDER SECTION 263 OF THE IN COME- TAX ACT, 1961 WAS ISSUED POINTING OUT AS FOLLOWS:- A) TRADE CREDITORS OF RS.1,37,01,797/- AND SHARE APPLICATION MONEY OF RS.52,48,000/- HAS BEEN ACCEPT ED BY THE A.O. WITHOUT ANY ENQUIRY OR VERIFICATION. B) THERE IS DIFFERENCE IN THE RECEIPT SHOWN BY THE ASSESSEE IN TDS CERTIFICATE WHICH IS AT RS.2,12,03, 930/- AND 26AS WHICH IS RS.2,22,87,066/- WHICH MEANS THAT THE RE IS A SUPPRESSION OF RS.10,83,136/-, WHICH WAS REQUIRED T O BE ADDED TO THE INCOME OF THE ASSESSEE, BUT A.O.S ORDE R IS SILENT ON THIS ISSUE. C) CLAIMS OF EXPENSES HAVE BEEN ACCEPTED AS SUCH WITHOUT ANY EVIDENCE OR VERIFICATION. 4. WITH REGARD TO THE FIRST ISSUE OF TRADE CREDITOR S OF `1.37 CRORES AND SHARE APPLICATION MONEY OF `52.48 LAKHS, THE LE ARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER H AD MADE DUE ENQUIRIES WITH REGARD TO TRADE CREDITORS AND, THERE FORE, MERELY BECAUSE LEARNED CIT HAS A DIFFERENT VIEW, THE ASSESSMENT OR DER COULD NOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERES TS OF THE REVENUE. HE REFERRED TO THE COPY OF THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 142(1) OF THE ACT DATED 10.05.2010 WHEREIN IN Q UESTION NO.5, THE ASSESSING OFFICER HAD ASKED FOR CONFIRMATION OF SUN DRY CREDITORS ALONG WITH THEIR PERMANENT ACCOUNT NUMBERS AND COMPLETE A DDRESS AND COPY OF RETURN OF INCOME, GENUINENESS OF THE TRANSA CTION AND CREDITWORTHINESS. HE SUBMITTED THAT COMPLETE DETAI LS WERE FILED ALONG WITH THE CONFIRMATION FROM THE TRADE CREDITORS AND THEY WERE EXISTING INCOME TAX ASSESSEES AND COPY THEREOF HAS BEEN FILE D AT PAGES 64 TO ITA-2765/DEL/2013 3 93 OF THE COMPILATION FILED BY THE ASSESSEE. HE SU BMITTED THAT THERE WAS SOME MISTAKE REGARDING THE ACCOUNT OF M/S JYOTI KA ELECTRIC CORPORATION, MEERUT AND THE SAME WAS RECONCILED AND A RECONCILIATION STATEMENT WAS FILED ALONG WITH COPY OF ACCOUNT AND COPY THEREOF HAS BEEN FILED IN THE COMPILATION BEFORE THE TRIBUNAL. WITH REGARD TO THE SHARE APPLICATION MONEY OF `52.48 LAKHS, HE SUBMITT ED THAT THE AMOUNT HAD BEEN TAKEN WRONGLY BY THE LEARNED CIT AS IT PERTAINED TO THE EARLIER YEARS AND WAS OPENING BALANCE AS ON 01. 04.2007 AND THE ADDITION DURING THE YEAR WAS ONLY `2.53 LAKHS FOR W HICH NECESSARY EVIDENCE WAS FILED. HE REFERRED TO THE RELEVANT DE TAILS FILED IN THE COMPILATION IN THIS BEHALF. 5. LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LE ARNED COUNSEL FOR THE ASSESSEE ON THIS ISSUE. HE SUBMITTED THAT NOT ONLY ENQUIRY BUT PROPER ENQUIRY SHOULD HAVE BEEN MADE BY THE ASSESSI NG OFFICER, WHICH WAS NOT DONE IN THIS CASE. THE ASSESSING OFFICER H AS FAILED TO DO ANY ENQUIRY WITH REGARD TO THE SOURCE AND MERELY TAKING PAPERS ON RECORD IS NOT SUFFICIENT. HE RELIED ON THE DECISION OF HO N'BLE DELHI HIGH COURT IN GEE VEE ENTERPRISES VS. ADDITIONAL CIT, DELHI I, AND OTHERS [1975] 99 ITR 375 AND OF HON'BLE SUPREME COURT IN ROSHAN D I HATTI VS. CIT, DELHI [1977] 107 ITR 938 IN SUPPORT OF THE CASE O F THE REVENUE. HE RELIED ON THE ORDER OF LEARNED CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). REGARDING THE FIRST ISSUE OF TRADE CREDITORS AND SHARE APPLICATION MONE Y, WE FIND THAT THE ASSESSING OFFICER HAS SERVED ON THE ASSESSEE A NOTI CE U/S 142(1) OF THE ACT DATED 10.05.2010 WHEREIN VIDE ENQUIRY NO.5, HE HAS ASKED FOR THE RELEVANT DETAILS WITH REGARD TO SUNDRY CREDITORS. THE ASSESSEE HAS COMPLIED WITH THE SAID NOTICE AND HAS GIVEN COMPLET E DETAILS ALONG WITH COPY OF ACCOUNT, COMPLETE ADDRESS AND A CONFIR MATION OF ACCOUNT ITA-2765/DEL/2013 4 ALONG WITH PERMANENT ACCOUNT NUMBER OF THE SUNDRY C REDITORS. ALL ARE INCOME TAX ASSESSEES AND THE ASSESSING OFFICER HAS NOT DOUBTED ANY TRANSACTIONS RECORDED IN THEIR ACCOUNTS. WE HAVE P ERUSED THE COPIES OF THE EVIDENCE FILED BY THE ASSESSEE IN THE COMPIL ATION BEFORE THE TRIBUNAL AND ARE OF THE VIEW THAT PROPER ENQUIRY HA S BEEN MADE BY THE ASSESSING OFFICER AND, THEREFORE, THERE IS NO BASIS FOR THE LEARNED CIT TO CONCLUDE THAT THE ORDER OF THE ASSESSING OFFICER WA S ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF THE REVENUE. WITH REGARD TO THE ISSUE OF SHARE APPLICATION MONEY, WE FIND THAT THE AMOUNT OF `52,48,000/- TAKEN BY THE CIT IS A CLEAR MISTAKE AND IT REPRESEN TS THE OPENING BALANCE AS ON 01.04.2007 AND, IN FACT, THE ADDITION DURING THE YEAR WAS OF `2.53 LAKHS. THE ASSESSEE HAS FILED THE REQUIRE D DETAILS AND THE ORDER OF THE LEARNED CIT ITSELF IS ERRONEOUS ON THI S ISSUE. IN THESE FACTS OF THE CASE, WE HOLD THAT THE LEARNED CIT WAS NOT J USTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT ON THE ISS UE OF TRADE CREDITORS AND SHARE APPLICATION MONEY AND THE SAME IS CANCELL ED. 7. THE SECOND ISSUE IS WITH REGARD TO THE DIFFERENC E IN THE RECEIPT SHOWN BY THE ASSESSEE IN TDS CERTIFICATE AND AS PER FORM 26AS. THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRESSED TH IS ISSUE AS THE ASSESSING OFFICER HIMSELF IN ORDER PASSED U/S 143(3 ) GIVING EFFECT TO THE ORDER OF THE CIT U/S 263 HAD ACCEPTED THE VERSION O F THE ASSESSEE AND HAD NOT MADE ANY ADDITION ON THIS ACCOUNT. ACCORDI NGLY, THIS ISSUE DOES NOT REQUIRE ANY ADJUDICATION. 8. THE THIRD ISSUE RAISED BY THE LEARNED CIT U/S 26 3 WAS THE CLAIM OF EXPENSES WHICH WAS ACCEPTED WITHOUT ANY EVIDENCE OR VERIFICATION. 9. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TOTAL EXPENSES APART FROM PURCHASES AND DEPRECIATION WAS OF ABOUT `50 LAKHS FOR WHICH COMPLETE DETAILS WERE FILED BY THE ASSESSEE. HE ITA-2765/DEL/2013 5 SUBMITTED THAT THE ASSESSING OFFICER HAS ASKED FOR THE DETAILS IN HIS NOTICE U/S 142(1) AND THE SAME WERE FILED BY THE AS SESSEE. LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNS EL FOR THE ASSESSEE. HE RELIED UPON THE SAME DECISION OF THE HONBLE COURTS AS RELIED UPON BY HIM WHILE ARGUING THE ISSUE NO.1 REC ORDED IN THE FOREGOING PARAGRAPHS OF THIS ORDER. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE PERUSED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT. WE FIND THAT COMPLETE DETAILS OF THE EXPENSES OVER `1 LAKH WERE ASKED BY THE ASSESSING OFFICER AND THE SAME WERE SUBMITTED BY THE ASSESSEE VIDE REPLY DATED 25.10.2010 AND COPIES OF ACCOUNTS OF VARIOUS HEADS OF EXPENSES WERE SUBMITTED AND THE SUPPORTING VOUCHERS AND BILLS, RE CEIPTS ETC. WERE ALSO SUMMONED AND PRODUCED BY THE ASSESSEE ON 25.10 .2010 AND ON 28.10.2010. THE ACCOUNTS OF THE ASSESSEE WERE AUDI TED BY THE CHARTERED ACCOUNTANT. WE FIND THAT THE ORDER OF LE ARNED CIT U/S 263 ON THIS ISSUE IS BASED ON MERE SUSPICION AND THERE IS NO MATERIAL BROUGHT ON RECORD TO SUGGEST THAT THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF TH E REVENUE. ACCORDINGLY, WE HOLD THAT THERE WAS NO JUSTIFICATIO N FOR THE LEARNED CIT TO PASS ORDER U/S 263 ON THIS ISSUE, WHICH IS CANCE LLED ACCORDINGLY. THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER, 2015. SD/- SD/- ( (( ( PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. ITA-2765/DEL/2013 6 COPY FORWARDED TO: - 1. APPELLANT : M/S TRANSTRON ELECTRICALS PRIVA T M/S TRANSTRON ELECTRICALS PRIVAT M/S TRANSTRON ELECTRICALS PRIVAT M/S TRANSTRON ELECTRICALS PRIVATE LIMITED, E LIMITED, E LIMITED, E LIMITED, A AA A- -- -1, INDUSTRIAL ESTATE, PARTAPUR, 1, INDUSTRIAL ESTATE, PARTAPUR, 1, INDUSTRIAL ESTATE, PARTAPUR, 1, INDUSTRIAL ESTATE, PARTAPUR, MEERUT MEERUT MEERUT MEERUT 250 103 (U.P.). 250 103 (U.P.). 250 103 (U.P.). 250 103 (U.P.). 2. RESPONDENT : COMMISSION OF INCOME TAX, COMMISSION OF INCOME TAX, COMMISSION OF INCOME TAX, COMMISSION OF INCOME TAX, AAYAKAR BHAWAN, MEERUT. AAYAKAR BHAWAN, MEERUT. AAYAKAR BHAWAN, MEERUT. AAYAKAR BHAWAN, MEERUT. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR