ACIT, CIRCLE- 19(1), NEW DELHI V. OSIYAN COMMUNICATION PVT. LTD., NEW DELHI

ITA 3150/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8029 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 03-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV PUNDIR
• Keywords: FORM 26AS
• Section: 143(3); 133(6)

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 3150/DEL/2018 (ASSESSMENT YEAR: 2013-14) ACIT, CIRCLE-19(1), NEW DELHI VS. OSIYAN COMMUNICATION PVT. LTD, C-632, NEW FRIENDS COLONY, SOUTH DELHI, NEW DELHI PAN: AABCO0997Q (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GAURAV PUNDIR, SR. DR ASSESSEE BY: SHRI AMIT SHARMA, CA DATE OF HEARING 29/07/2021 DATE OF PRONOUNCEMENT 2 5 / 08 /2021 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS APPEAL IS FILED BY THE LD ACIT, CIRCLE-19(1), NEW DELHI (LD AO) AGAINST THE ORDER OF THE LD COMMISSIONER OF INCOME TAX (APPEALS)-7, NEW DELHI (LD CIT(A) DATED 19.02.2018 FOR ASSESSMENT YEAR 2013-14. 2. THE LD AO HAS RAISED THE SOLITARY GROUND OF APPEAL THAT THE LD CIT (A) HAS DELETED THE ADDITION OF RS. 7,41,78,940/- U/S 68 OF THE ACT. 3. THE ADDITION HAS BEEN MADE BY THE LD AO ON ACCOUNT OF DIFFERENCE IN TOTAL REVENUE SHOWN AS PER THE BOOKS OF ACCOUNT OF THE ASSESSEE AND INCOME SHOWN IN FORM NO. 26AS FOR THAT YEAR. 4. THE BRIEF FACTS OF THE CASE SHOWN THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF PROVIDING TELECOM SERVICES. IT FILED ITS RETURN OF INCOME ON 29.09.2013 SHOWING TOTAL INCOME OF RS. 9,51,50,122/-. THE ASSESSMENT U/S 143(3) OF THE ACT WAS PASSED ON 31.03.2016 WHEREIN, THE LD AO HAS MADE THE ADDITION OF RS. 7,41,78,940/- TO THE TOTAL INCOME OF THE ASSESSEE. THE ADDITION ARE AS UNDER:- PAGE | 2 A. THE ADDITION OF RS. 36,65,400/- ON ACCOUNT OF RECEIPT BY THE ASSESSEE FROM TATA TELESERVICES LTD OF RS. 75,93,794/- WHEREAS RECEIPT SHOWN IN FORM NO. 26AS OF RS. 1,12,59,194/-. B. THE ADDITION OF RS. 2,33,58,605/- ON ACCOUNT OF RECEIPT FROM RELIANCE TELECOM LTD WHEREIN, AS PER THE BOOKS OF ACCOUNT THE INCOME SHOWN IS RS. 6,83,88,345/- WHEREAS INCOME SHOWN AS PER THE FORM NO. 26AS OF RS. 9,17,46,950/- AND C. ADDITION OF RS. 4,71,54,935/- ON ACCOUNT OF RECEIPT SHOWN IN THE BOOKS OF RS. 3,68,31,567/- WHEREAS INCOME SHOWN IN FORM NO. 26AS OF RS. 8,39,86,502/-. 5. ON APPEAL BEFORE THE LD CIT(A) ASSESSEE SUBMITTED THE DETAILED RECONCILIATION AND STATED THAT EITHER THE RECEIPT HAVE ALREADY BEEN SHOWN IN THE PROFIT AND LOSS ACCOUNT OR THEY HAVE BEEN RECOGNIZED IN THE PREVIOUS YEAR, OR THEY HAVE BEEN ARISING ON ACCOUNT OF ACCOUNTING OF SERVICE TAX. IT WAS ALSO SHOWN THAT THE DIFFERENCE IS ALSO ON ACCOUNT OF SERVICE TAX INCLUDED IN THE INVOICES VALUE. BEFORE LEARNED CIT A ASSESSEE SUBMITTED INVOICES, CHART OF THE AMOUNT SHOWN IN THE PROFIT AND LOSS ACCOUNT AND AMOUNT SHOWN IN FORM NO. 26AS. BASED ON THE CHART SUBMITTED, THE ASSESSEE SUBMITTED THE ASSESSEE HAS SHOWN MORE INCOME WITH RESPECT TO ALL THESE CUSTOMERS AND THERE IS NO LEAKAGE. THE ASSESSEE SUBMITTED THAT THE ADDITION MADE BY THE LD AO DESERVED TO BE DELETED. THE LD CIT (A) CAREFULLY CONSIDERED THE EXPLANATION OF THE ASSESSEE WHICH IS PRODUCED AT PAGE NO. 4 STARTING FROM PAGE NO. 4 TO PAGE NO. 16 OF HIS ORDER WHICH SHOWS THAT THAT EACH AND EVERY RECEIPT SHOWN IN TAX CREDIT STATEMENT IN FORM NO. 26AS AND INCOME RECOGNIZED IN PROFIT AND LOSS ACCOUNT ARE MATCHED AND THEREFORE, HE DELETED THE ADDITION. THE LD AO IS AGGRIEVED WITH THAT ORDER AND IS IN APPEAL BEFORE US. 6. THE LD DR RELIED UPON THE ORDER OF THE LD AO WHEREAS THE LD AR RELIED UPON THE ORDER OF THE LD CIT (A). 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ON THE BASIS OF THE CONTENTS OF ORDER OF THE LD CIT(A) , WE FIND THAT HE HAS DELETED THE ADDITION FOR THE FOLLOWING REASONS:- A. THAT THE AMOUNTS OF SERVICE TAX SHOWN IN THE INVOICE ARE NOT REFLECTED TO THE EXTENT OF SERVICE TAX INCLUDED IN THE GROSS VALUE OF PAYMENT. PAGE | 3 B. WITH RESPECT TO CERTAIN INVOICES, WHICH WERE PERTAINING TO ASSESSMENT YEAR 2012-13, INCLUDED BY THE ASSESSEE IN THE INCOME OF THOSE YEARS WHEREAS SAME WERE SHOWN AS PAYMENT MADE BY THE CUSTOMER IN THE FORM NO. 26AS OF THIS YEAR. C. INTERCHANGEABILITY OF RECEIPTS FROM RELIANCE COMMUNICATION LTD AND RELIANCE COMMUNICATION INFRASTRUCTURE LTD PERTAINING TO THE SAME GROUP. THE LD CIT (A) EXAMINED THE RECONCILIATION OF BOTH THE COMPANIES INDIVIDUALLY WITH FORM NO. 26AS AND NO DIFFERENCE WERE FOUND. D. THE FAILURE OF THE LD AO TO CONSIDER THE INCOME SHOWN UNDER THE OTHER SEGMENT OF THE ASSESSEE ALREADY SHOWN AS INCOME IN THE PROFIT AND LOSS ACCOUNT AND MERELY COMPARING WITH ONE OF THE SEGMENT OF THE INCOME. 8. THE ABOVE REASONS ARE VERIFIED BY THE LD CIT (A) TO THE EXTENT OF EACH RUPEE AND HAVE GIVEN DETAILED ANALYSIS WITH RESPECT TO EACH OF THE PARTIES. THE LD DR COULD NOT SHOW US ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) IN DELETING THE ABOVE ADDITIONS OF RS. 7,41,78,940/-. THEREFORE, WE CONFIRM THE ORDER OF THE LD CIT (A) AND DISMISSED THE GROUND OF APPEAL OF THE LD AO. 9. BEFORE PARTING, WE WOULD LIKE TO STATE THAT THE ADDITION HAS BEEN MADE BY THE LD AO MERELY ON THE DIFFERENCE BETWEEN INCOME SHOWN IN THE FORM 26AS WITH ONE SEGMENT OF INCOME SHOWN IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. BEFORE MAKING SUCH HUGE ADDITION ON SUCH GROUND, THE LD AO SHOULD HAVE FIRST UNDERSTOOD THE CONCEPT OF INCOME SHOWN IN THE FORM NO. 26AS AND ACCOUNTING TREATMENT GIVEN BY THE ASSESSEE TO VARIOUS COMPONENTS OF THE BILLS RAISED. NATURALLY, THE SERVICE TAX IS NOT THE INCOME OF THE ASSESSEE AND THEREFORE, IT CANNOT BE INCOME TO BE SHOWN IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. THEREFORE, THERE IS BOUND TO BE A DIFFERENCE TO THAT EXTENT. FURTHER, THERE CAN BE OVERFLOW OF INCOME OF ONE PRECEDING PREVIOUS YEAR IN THE CURRENT YEAR IN FORM 26AS. HOWEVER, THERE CANNOT BE OVERFLOW OF INCOME PERTAINING TO THE PRECEDING PREVIOUS YEAR IN THE CURRENT PREVIOUS YEAR IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE BECAUSE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNTS ON ACCRUAL SYSTEM OF ACCOUNTING. THE LD AO SHOULD HAVE CONSIDERED THE INCOME SHOWN BY THE ASSESSEE IN THE EARLIER YEAR IN ITS PROFIT AND LOSS ACCOUNT, WHEN ASSESSEE HAS FILED DETAILED PAGE | 4 RECONCILIATION BEFORE THE LD AO. THE LD AO COULD ALSO HAVE VERIFIED THE ABOVE WITH THE BOOKS OF ACCOUNT PRODUCED BEFORE HIM. FURTHER, THE DIFFERENCE BETWEEN THE REVENUE SHOWN IN THE FORM NO. 26AS AND THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE , MAY TRIGGER A DOUBT IN THE MIND OF THE LEARNED ASSESSING OFFICER, BUT THAT DOUBT NEEDS TO BE FURTHER CLARIFIED BY CARRYING OUT FURTHER EXAMINATION OF THE DETAILS AND RECONCILIATION. MERELY, ISSUING NOTICES U/S 133(6) AND NOT RECEIVING THE REPLY CANNOT RESULT AN ADDITION INTO HANDS OF THE ASSESSEE. ACCORDING TO US, THE LD AO SHOULD HAVE CARRIED OUT FURTHER EXAMINATION BEFORE MAKING SUCH A HUGE ADDITION. 10. IN THE RESULT, THE ADDITION MADE BY THE LD AO HAS BEEN CORRECTLY DELETED BY THE LD CIT (A). 11. APPEAL OF THE LD AO IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/08/2021. SD/- SD/- (SUCHITRA KAMBLE) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25/08/2021 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI PAGE | 5 DATE OF DICTATION 2 5 . 0 8 . 2 0 2 1 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2 5 . 0 8 . 2 0 2 1 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 2 5 . 0 8 . 2 0 2 1 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/ PS 2 5 . 0 8 . 2 0 2 1 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 2 5 . 0 8 . 2 0 2 1 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 2 5 . 0 8 . 2 0 2 1 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 5 . 0 8 . 2 0 2 1 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 5 . 0 8 . 2 0 2 1 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER