ACIT, New Delhi V. M/s Almondz Global Securities Ltd., New Delhi

ITA 3306/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97152 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDER MAINI
• Assessee Lawyers: PRANJAL SRIVASTAVA; SSH VED JAI N
• Keywords: Additional evidence; Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO . 3306/DEL/2011 ASSESSMENT YEAR: 2007 - 08 THE ASSTT. COMMISSIONER OF VS. M/S ALMONDZ GLOBAL SECURITIES LTD., INCOME TAX, CENTRAL CIRCLE - 09, (FORMERLY ALLIANZ SECURITIES LTD. ) JHANDEWALAN, NEW DELHI 3, SCINDIA HOUSE, 2 ND FLOOR, JANPATH NEW DELHI (PAN: AABCA0005A ) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAVINDER MAINI, SR. DR RESPONDENT BY : S /S H. VED JAIN, ADV. & PRANJAL SRIVASTAVA, ADV. DATE OF HEARING: 08.07.2015 DATE OF PRONOUNCEMENT: 02.09.2015 ORDER PER INTURI RAMA RAO, A.M. : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF CIT(A), DATED 11.04.2011 PASSED FOR THE ASSESSMENT YEAR 2007 - 08. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 80,13,936/ - (INCLUDING SERVICE TAX OF RS. 8,73,936/ - ) ON ACCOUNT OF ACCOMMODATION BIL LS ISSUED BY M/S SWEN TELEVISION LTD. WHICH WAS CONTROLLED BY AN ADMITTED ENTRY PROVIDER SH. S.K. GUPTA, TO THE ASSESSEE. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN IGNORING THE NON PRODUCTION OF THE RATE CARD AND TRP RA TING OF THE TELECASTER M/S JHANKAR TV AS ALSO OF ANY EVIDENCE TO ESTABLISH ANY PAYMENT MADE BY M/S SWEN TELEVISION LTD. TO THE SAID TELECASTER IN RESPECT OF TELECASTING OF THE ASSESSEE S ADVERTISEMENT OF ITS TV CHANNEL. 3. (A) THE ORDER OF THE CIT(A) IS E RRONEOUS AND NOT TENABLE IN THE LAW AND ON FACTS. (B) THE APPELLANT CRAVED LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RESPONDENT ASSESSEE IS A COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF MERCHANT BANKING AND INVESTMENT OF FUNDS AMONG OTHER BUSINESS ES LIKE DISTRIBUTION OF PRIMARY PRODUCTS FOR EXAMPLE BONDS, GOVERNMENT BONDS , MUTUAL FUNDS IPO ETC. IT HAS FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007 - 08 ON 30.10.2007, DISCLOSING TOTAL INCOME OF RS. 9,02,44,880/ - . AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED VIDE ORDER DATED 24.12.2009 BY DISALLOWIN G THE ADVERTISEMENT EXPENSES OF RS. 80,13,936/ - AS UNDER (PARA 4, PAGE 3) : 4. AS NO NEW PLEA NOR ANY FRESH EVIDENCE WAS SUBMITTED DURING THE COURSE OF THE PROCEEDINGS FOR THE YEAR UNDER ASSESSMENT, THE TRANSACTIONS OF FOLLOWING THE ASSESSMENT ORDER OF EARLIER YEAR I.E. OF AY 2006 - 07, THE TRANSACTIONS OF RS. 80,13,936/ - UNDERTAKEN BY THE ASSESSEE WITH M/S SWEN TELEVISION LTD. DURING THE YEAR UNDER ASSESSMENT ARE ALSO HEREBY TREATED AS ACCOMMODATION ENTRIES ONLY AND, THEREFORE, ADDITION OF RS. 80,13,936/ - IS H EREBY MADE TO THE TOTAL INCOME. BEING AGGRIEVE BY THE ABOVE DISALLOWANCE, AN APPEAL WAS FILED BEFORE THE CIT(A) WHO VIDE IMPUGNED ORDER DATED 11 TH APRIL, 2011, DELETED THE ADDITION. 3 3. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT PR ODUCED THE ADDITION EVIDENCE BEFORE THE CIT(A). AFTER CONSIDERING THE ADDITIONAL EVIDENCE, THE CIT(A) VIDE PARA 27 OF HIS ORDER HELD AS UNDER: 21. THUS, TO SUM UP, IN NONE OF THE STATEMENTS RECORDED BEFORE THE A.O. SH. S.K. GUPTA HAS STATED THAT HIS ENTIR E BUSINESS IS NON GENUINE AND ALL THE BILLS ISSUED BY ALL HIS GROUP COMPANIES ARE ACCOMMODATION ENTRIES. HE HAS AT THE SAME TIME NOT CONTRADICTED HIS CATEGORICAL STATEMENT GIVEN BEFORE THE INVESTIGATION WING REGARDING THE GENUINENESS OF THE BILLS ISSUED IN THE NAME OF SWEN TELEVISION LTD. TO THE APPELLANT COMPANY. THUS, FROM THE STATEMENT OF SH. S.K. GUPTA IT CANNOT BE CONCLUDED THAT THE BILLS DEBITED IN THE NAME OF SWEN TELEVISION LTD. BY THE APPELLANT COMPANY ARE NOT GENUINE. RATHER HIS STATEMENT AFFIRMS THAT THE BILLS FROM SWEN TELEVISION LTD. ARE GENUINE. JUST BECAUSE MAJOR CONCERNS CONTROLLED BY SH. S.K. GUPTA ARE ADMITTEDLY ISSUING NON GENUINE ACCOMMODATION BILLS, IT CANNOT BE AUTOMATICALLY PRESUMED THAT ALL THE BILLS ISSUED BY ALL THE CONCERNS OF SH. S.K. GUPTA ARE NON GENUINE. THIS IS MORE SO WHEN HE HAD ADMITTED THAT HE IS DOING SOME GENUINE BUSINESS ALSO IN THE NAMES OF SOME OF THE COMPANIES. THUS, IN THE CASE OF APPELLANT, NO ADVERSE VIEW FROM THE STATEMENT OF SH. S.K. GUPTA CAN BE TAKEN TO COME TO THE CONCLUSION THAT THE BILLS FROM SWEN TELEVISION LTD. ARE NON - GENUINE AND ACCOMMODATION BILLS. 4. DURING THE COURSE OF HEARING, IT WAS SUBMITTED BY LEARNED COUNSEL THAT THE ISSUE IN APPEAL IS COVERED BY THE FOLLOWING DECISIONS OF THE COORDINATE BENCH OF ITAT, DELHI: 1. JCIT VS M/S AJAY HOME PRODUCTS PVT. LTD . (ITA NO. 2249/DEL/2011 , DATED 12 - 04 - 2013) WHEREIN IT WAS HELD AS UNDER; '9. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. AFTER CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). THE MAIN B ASIS OF THE ASSESSING OFFICER FOR MAKING THE DISALLOWANCE IS THE STATEMENT OF SHRI S.K. GUPTA RECORDED BY THE ASSESSING OFFICER. HOWEVER, LEARNED CIT(A) HAS RECORDED THE FINDING THAT IN HIS STATEMENT SHRI S.K. GUPTA HAS NEVER MENTIONED THAT THE BILLS ISSUE D BY M/S ERA 4 ADVERTISING AND MARKETING CO. PVT. LTD. AND M/S HAMARA SAMAY T. V. NEWS NETWORK PVT. LTD. TO AJAY HOME PRODUCTS PVT. LTD., I.E., THE ASSESSEE, WERE IN THE NATURE OF ACCOMMODATION ENTRIES. THE ASSESSEE HAS FILED CONFIRMATION CERTIFICATE FROM M/ S HAMARA SAMAY T. V. NEWS NETWORK PVT. LTD. IN WHICH THE DETAILS OF TELECAST OF THE ADVERTISEMENT OF THE APPELLANT WERE GIVEN. THE ASSESSEE HAD FILED THE CONFIRMATION OF BOTH THE PARTIES, COPY OF CD OF THE ADVERTISEMENT FILM, COPY OF THE BILLS OF ADVERTISE MENT; ALL THE PAYMENTS WERE MADE BY CHEQUE, COPY OF BANK STATEMENT AND COMPLETE VOUCHERS RELATING TO ADVERTISEMENT EXPENSES WERE FURNISHED. IT WAS ALSO STATED BY THE LEARNED COUNSEL THAT ON THESE PAYMENTS OF ADVERTISEMENT EXPENSES, TDS WAS DEDUCTED AT SOUR CE AND MOREOVER, SERVICE TAX WAS ALSO PAID. THE CD CONTAINING THE TEXT OF ADVERTISEMENT WAS ALSO PRODUCED. CONSIDERING THESE FACTS, IN OUR OPINION, THE LEARNED CIT(A) RIGHTLY HELD THAT THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVING THAT THE PAYMENT TO M/ S ERA ADVERTISING AND MARKETING CO. PVT. LTD. AND M/S HAMARA SAMAY T. V. NEWS NETWORK PVT. L T D. WAS TOWARDS ACTUAL ADVERTISEMENT EXPENSES AND NOT ACCOMMODATION ENTRIES. IN VIEW OF THE TOTALITY OF THE ABOVE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). THE SAME IS SUSTAINED AND THE REVENUE'S APPEAL IS DISMISSED. ' 2 . DCIT VS M/S ASL INSURANCE BROKERS PVT. LTD (ITA NO. 2713 & 3579/DEL/10, DATED. 09 - 04 - 2012) '5. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. I T IS SEEN THAT THE REVENUE COLLECTED INFORMATION IN THE COURSE OF SEARCH OF SHRI S.K. GUPTA AND HIS COMPANIES THAT THEY WERE CARRYING ON THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. THEREAFTER HIS STATEMENT WAS RECORDED ON 27.12.2006 WHICH IS MORE SPEC IFIC IN RELATION TO THEIR TRANSACTION WITH THE ASSESSEE. IT HAS BEEN DEPOSED THAT THE BILLS ISSUED BY M/S. ERA ADVERTISEMENT AND MARKETING PVT. LTD. ARE IN THE NATURE OF ACCOMMODATION ENTRIES BUT M/S. SWEN TELEVISION LTD. HAS PROVIDED ADVERTISING SERVICES TO THE ASSESSEE COMPANY FOR WHICH AGENCY COMMISSION @ 15% HAS BEEN CHARGED. THE PAYMENTS MADE BY THE ASSESSEE AND RECEIVED BY M/S. SWEN TELEVISION LTD. HAVE BEEN VERIFIED FROM BOTH THE ENDS. THERE IS NO DISCREPANCY FOUND IN THIS MATTER. THE VERIFICATION HA S ALSO LED TO THE FACT THAT THE PAYMENTS INCLUDE SERVICE TAX AND TAX DEDUCTION AT SOURCE. M/S. SWEN TELEVISION LTD. HAS OFFERED THE RECEIPT FOR TAXATION IN ITS RETURN OF INCOME. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT DISALLOWING THE EXPENDITURE ON GROUNDS OF LACK OF RATE 5 CARD, TRP RATING AND SAMPLE AGREEMENT OF M/S. SWEN TELEVISION LTD. WITH ITS CLIENT IS NOT JUSTIFIED. THUS, WE ARE IN AGREEMENT WITH THE LD. CIT(A) THAT THE ASSESSEE WAS ENTITLED TO THE DEDUCTION OF EXPENDITURE INCURRED FOR ADVERTIS ING ON JHANKAR TV THROUGH ADVERTISEMENT AGENT, M/S. SWEN TELEVISION LTD.' 3 . DCIT VS. M/S ASL INSURANCE BROKERS PVT. LTD. , (ITA NO. 2713 & 3579/DEL/2010, DATED 09.04.2012): 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT IS SEEN THAT THE REVENUE COLLECTED INFORMATION IN THE COURSE OF SEARCH OF SHRI S.K. GUPTA AND HIS COMPANIES THAT THEY WERE CARRYING ON THE BUSINESS OF PROVIDING ACCOMMODATION ENTRI ES. THEREAFTER HIS STATEMENT WAS RECORDED ON 27.12.2006 WHICH IS MORE SPECIFIC IN RELATION TO THEIR TRANSACTION WITH THE ASSESSEE. IT HAS BEEN DEPOSED THAT THE BILLS ISSUED BY M/S. ERA ADVERTISEMENT AND MARKETING PVT. LTD. ARE IN THE NATURE OF ACCOMMODATIO N ENTRIES BUT M/S. SWEN TELEVISION LTD. HAS PROVIDED ADVERTISING SERVICES TO THE ASSESSEE COMPANY FOR WHICH AGENCY COMMISSION @ 15% HAS BEEN CHARGED. THE PAYMENTS MADE BY THE ASSESSEE AND RECEIVED BY M/S. SWEN TELEVISION LTD. HAVE BEEN VERIFIED FROM BOTH T HE ENDS. THERE IS NO DISCREPANCY FOUND IN THIS MATTER. THE VERIFICATION HAS ALSO LED TO THE FACT THAT THE PAYMENTS INCLUDE SERVICE TAX AND TAX DEDUCTION AT SOURCE. M/S. SWEN TELEVISION LTD. HAS OFFERED THE RECEIPT FOR TAXATION IN ITS RETURN OF INCOME. IN T HESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT DISALLOWING THE EXPENDITURE ON GROUNDS OF LACK OF RATE CARD, TRP RATING AND SAMPLE AGREEMENT OF M/S. SWEN TELEVISION LTD. WITH ITS CLIENT IS NOT JUSTIFIED THUS, WE ARE IN AGREEMENT WITH THE LD. CIT(A) THAT THE AS SESSEE WAS ENTITLED TO THE DEDUCTION OF EXPENDITURE INCURRED FOR ADVERTISING OF JHANKAR TV THROUGH ADVERTISEMENT AGENT, M/S SWEN TELEVISION LTD. 6. THE FACTS OF ASSESSMENT YEAR 2007 - 08 ARE ADMITTEDLY IDENTICAL TO THE FACTS OF ASSTT. YEAR 2006 - 07. THEREFORE, THE FINDINGS GIVEN IN THAT YEAR (SUPRA) ARE MADE APPLICABLE TO THIS YEAR ALSO. 5. SINCE THE IDENTICAL ISSUES ARE INVOLVED IN THE PRESENT CASE, RESPECTFULLY FOLLOWING THE DEC ISIONS IN THE ABOVE CASES, WE HO LD THAT THE ORDER OR CIT(A) IS REASO NABLE AND BASED ON THE EVIDENCE AND DOES NOT CALL FOR ANY INTERFERENCE. HENCE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6 6. IN THE RESULT, THE APPEAL IS DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 2 N D S E P T E M B E R , 2015. S D / - S D / - ( I.C. SUDHIR ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 N D S E P T E M B E R , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI