Prasha Solution (P) Ltd., New Delhi V. ITO, New Delhi

ITA 3066/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6385 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 30-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBINA CHAUDHURI
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 3066/DEL/2016 ASSESSMENT YEAR: 2011-12 PRASHA SOLUTION (P) LTD. VS. ITO, WARD-14(4), C/O KAPIL GOEL, ADVOCATE NEW DELHI F-26/124, SECTOR-7, ROHINI, DELHI -110085 (PAN: AACCP1679F) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. KAPIL GOEL, ADV. REVENUE BY : MS. BEDOBINA CHAUDHURI, SR. DR ORDER THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 08.3.2016 PASSED BY THE LD.CIT(A)-7, NEW DELHI RELA TING TO ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT DELETING TH E MECHANICAL ADDITION OF RS. 28,65,929/-; MADE SOLEL Y ON THE BASIS OF 26AS WHICH STOOD FULLY AND COMPLETELY RECONCILED BY INUNDATED EVIDENCE; 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT DELETING TH E ADDITION OF RS. 19,91,001/- PERTAINING TO RECEIPT O N WHICH PAYER DEDUCTED TD BUT SAID AMOUNT WAS WRITTEN OFF IN REVENUE A/C IN BOOKS AND IT IS NEVER DISPUTED THAT SAID AMOUNT IS REALISED BY ASSESSEE; 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT DELETING T HE ADDITION OF RS. 19,91,001/- PERTAINING TO RECEIPT O N WHICH PAYER DEDUCTED TD BUT SAID AMOUNT WAS WRITTEN OFF IN REVENUE A/CIN BOOKS, OUT OF WHICH RS . 827,827/- TO CURRENT YEAR ONLY FOR WHICH THERE CAN BE NO DISPUTE. 2 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT DELETING TH E ADDITION OF RS. 13,14,590/- BEING SERVICE TAX PORTI ON WHICH IS HELD BY CBDT AND JUDICIAL PRONOUNCEMENTS THAT SAME CANNOT BECOME PART OF ASSESSABLE RECEIPTS . 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT APPLYING TH E PROFIT RATE THEORY TO ALLEGED EXTRA RECEIPTS DEDUCE D ON BASIS OF MERE 26AS ON BASIS OF OVERALL PROFITABILIT Y AS IT IS TRITE LAW THAT ONLY PROFIT ELEMENT EMBEDDED I N RECEIPT IS TAXABLE. RELIEF CLAIMED/PRAYER 6. TO HOLD LD. CIT(A) WRONGLY SUSTAINED ADDITION MERIT S MADE BY THE AO; 7. TO APPLY REASONABLE PROFIT RATE TO APPROPRIATE ALLE GED EXTRA RECEIPTS. 8. ANY OTHER RELIEF AS DEEMED FIT IN CIRCUMSTANCES OF THE CASE. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF BREVITY. 3. DURING THE COURSE OF HEARING, LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 134 CONTA INING THE COPY OF BOMBAY HIGH COURT DECISION IN THE CASE OF KNIGHT FR ANK (INDIA) PVT. LTD. ORDER DATED 16.8.2016; DECISION OF GUJRAT HIGH COURT IN THE CASE OF KANTI AUTO FABRICATION PVT. LTD. ORDER DATED 2.2 .2016; IOTAT, KOLKATA DECISION IN THE CASE OF M/S GURUKRIPA SOFTW ARE SOLUTIONS (P) LTD. ORDER DATED 24.10.2014; REJOINDER FILED BEFORE CIT(A) DATED 5.2.2016 IN RESPONSE TO REMAND REPORT DATED 24.9.20 15 ALONGWITH INDEX OF PAPER BOOK; COPY OF REMAND REPORT DATED 24 .9.2015; COPY OF INCOME TAX ORDER U/S. 143(3) OF THE ACT; COPY OF AU DITED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT; COPY OF LETTER D ATED 12.3.2014 FILED BEFORE ITO, WARD NO. 14(3); COPY OF RECONCILIATION BETWEEN 26AS AND RECRUITMENT PROCESSING CHARGES (INCOME) PROFIT AN D LOSS ACCOUNT; PARTY WISE DETAILS OF BOOK DEBT WRITTEN OFF; COPY O F LEDGER ACCOUNTS AND PARTY STATEMENT OF: AMERICAN EXPRESS INDIA PVT. LTD , AUXICOGE INFOTECH 3 PVT. LTD, BA CONTINUM SOLUTION PVT. LTD, BARCLAYS S HARED SERVICES PVT. LTD, DAIKIN AIR CONDITIONING INDIA PVT. LTD, E XL SERVICES LTD, INTELENET GLOBAL SERVICES PVT. LTD, JINDAL INTELLIC OM PVT. LTD, MIDLAND CREDIT MANAGEMENT INDIA PVT. LTD., QUATRO GLOBAL SE RVICES PVT. LTD., SIMPLEX INFRASTRUCTURE LTD. AND TECNOVATE ESOLUTION PVT. LTD.; COPY OF JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS . NOBLE & HEWITT(I) (P) LTD. DATED 10.9.2007; COPY OF HONBLE SUPREME C OURT DECISION DATED 9.2.2010 IN THE CASE OF TRF LTD. VS. CIT IN C IVIL APPEAL NO. 5292 TO 5294 OF 2003 AND CIT VS. AUTOMETERS LTD. ON 2.3.2007; COPY OF FORM NO. 26AS AND DETAILS OF RECRUITMENT INCOME WRITTEN OFF. LD. COUNSEL OF THE ASSESSEE ALSO CERTIFIED THAT THE ABO VE DOCUMENTS WERE AVAILABLE TO BOTH THE AUTHORITIES I.E. AO & CIT(A) AND NO FRESH /NEW EVIDENCE IS ADDUCED AT THIS STAGE BEFORE THE TRIBUN AL AND THE CASE LAWS RELIED ARE SEPARATE. HE FURTHER STATED THAT TH E LOWER AUTHORITIES HAVE NOT CONSIDERED THE VITAL AND LEGALLY TENABLE D OCUMENTARY EVIDENCES TENDERED, AS AFORESAID AND CONTENTION RAI SED DURING THE APPELLATE PROCEEDINGS WHICH GOES TO THE ROOT OF THE MATTER AND ARE VERY ESSENTIAL TO ADJUDICATE THE ISSUE IN DISPUTE. IN VI EW OF THE ABOVE, HE REQUESTED THAT THE ISSUE INVOLVED IN THE PRESENT AP PEAL MAY BE SET ASIDE TO THE FILE OF THE AO TO DECIDE THE SAME AFRE SH UNDER THE LAW, AFTER CONSIDERING ALL THE DOCUMENTS AND GIVE ADEQ UATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO SUBSTANTIATE HIS CAS E. 4. ON THE CONTRARY, LD. DR OPPOSED THE REQUEST OF T HE LD. COUNSEL OF THE ASSESSEE AND RELIED UPON THE ORDERS OF THE A UTHORITIES BELOW. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS. I HAVE GONE THROUGH THE ORDER PASSED BY THE REVENUE AUTHOR ITIES ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE PAPER BOOK CONTA INING PAGES 1 TO 134 HAVING THE COPY OF BOMBAY HIGH COURT DECISION I N THE CASE OF KNIGHT FRANK (INDIA) PVT. LTD. ORDER DATED 16.8.201 6; DECISION OF GUJRAT HIGH COURT IN THE CASE OF KANTI AUTO FABRICA TION PVT. LTD. 4 ORDER DATED 2.2.2016; IOTAT, KOLKATA DECISION IN TH E CASE OF M/S GURUKRIPA SOFTWARE SOLUTIONS (P) LTD. ORDER DATED 2 4.10.2014; REJOINDER FILED BEFORE CIT(A) DATED 5.2.2016 IN RES PONSE TO REMAND REPORT DATED 24.9.2015 ALONGWITH INDEX OF PAPER BOO K; COPY OF REMAND REPORT DATED 24.9.2015; COPY OF INCOME TAX ORDER U/ S. 143(3) OF THE ACT; COPY OF AUDITED BALANCE SHEET AND PROFIT AND L OSS ACCOUNT; COPY OF LETTER DATED 12.3.2014 FILED BEFORE ITO, WARD NO . 14(3); COPY OF RECONCILIATION BETWEEN 26AS AND RECRUITMENT PROCESS ING CHARGES (INCOME) PROFIT AND LOSS ACCOUNT; PARTY WISE DETAI LS OF BOOK DEBT WRITTEN OFF; COPY OF LEDGER ACCOUNTS AND PARTY STA TEMENT OF: AMERICAN EXPRESS INDIA PVT. LTD, AUXICOGE INFOTECH PVT. LTD, BA CONTINUM SOLUTION PVT. LTD, BARCLAYS SHARED SERVICES PVT. L TD, DAIKIN AIR CONDITIONING INDIA PVT. LTD, EXL SERVICES LTD, INTE LENET GLOBAL SERVICES PVT. LTD, JINDAL INTELLICOM PVT. LTD, MIDL AND CREDIT MANAGEMENT INDIA PVT. LTD., QUATRO GLOBAL SERVICES PVT. LTD., SIMPLEX INFRASTRUCTURE LTD. AND TECNOVATE ESOLUTION PVT. LT D.; COPY OF JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS . NOBLE & HEWITT(I) (P) LTD. DATED 10.9.2007; COPY OF HONBLE SUPREME C OURT DECISION DATED 9.2.2010 IN THE CASE OF TRF LTD. VS. CIT IN C IVIL APPEAL NO. 5292 TO 5294 OF 2003 AND CIT VS. AUTOMETERS LTD. ON 2.3.2007; COPY OF FORM NO. 26AS AND DETAILS OF RECRUITMENT INCOME WRITTEN OFF. I FIND THAT IT WAS THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE THAT THE ABOVE DOCUMENTS WERE AVAILABLE TO BOTH THE AUTH ORITIES I.E. AO & CIT(A) AND NO FRESH /NEW EVIDENCE IS ADDUCED AT THI S STAGE BEFORE THE TRIBUNAL AND THE CASE LAWS RELIED ARE SEPARATE. I F URTHER FIND THAT THE LOWER AUTHORITIES HAVE NOT CONSIDERED THE VITAL AN D LEGALLY TENABLE DOCUMENTARY EVIDENCES TENDERED, AS AFORESAID, WHICH GOES TO THE ROOT OF THE MATTER AND ARE VERY ESSENTIAL TO ADJUDICATE THE ISSUE IN DISPUTE. 6. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT IN THIS CASE THE ISSUE IN DISPUTE NEEDS TO BE REMITTED BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRES H, AS PER LAW. 5 ACCORDINGLY, THE ISSUE IN DISPUTE IS SET ASIDE AND RESTORED BACK TO THE FILE OF THE AO TO CONSIDER THE ISSUE IN DISPUTE AFR ESH AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO CONSIDER ALL THE DOCUMENTS AVAILABLE WITH THE ASSESSEE. TH E ASSESSEE IS ALSO DIRECTED TO SUBMIT ALL THE NECESSARY DOCUMENTS BEFO RE THE AO TO SUBSTANTIATE HIS CASE AND FULLY COOPERATE WITH THE AO DURING THE PROCEEDINGS. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20/03/2017 . SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 20/03/2017 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