ACIT, New Delhi V. M/s. Global Associates, New Delhi

ITA 3332/DEL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1699 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ EEV RANKA
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH C NEW DELHI BEFORE : SHRI I.C. SUDHIR , JUDICIAL MEMBER & SHRI L.P. SAHU , ACCOUNTANT MEMBER ITA NO. 3332/DEL./2013 ASSTT. YEAR : 2009 - 10 A.C.I.T. CIRCLE 36(1), VS. M/S. GLOBAL ASSOCIATES, NEW DELHI. 325, DHRUV APARTMENT, PLOT NO.4, I.P. EXTENSION, DELHI [PAN: AAFFG7497Q] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJEEV RANKA, SR. D.R. RESPONDENT BY : SHRI K.M. GUPTA, A DVOCATE DATE OF HEARING : 01.09.2015 DATE OF PRONOUNCEMENT : 09 . 10 .2015 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 22.03.2013 OF THE LEARNED CIT(A) - XXVII, NEW DELHI FOR THE ASSESSMENT YEAR 2009 - 10 ON THE FOLLOWING GROUNDS : (I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAD ERRED IN DELETING ADDITION OF RS.1,28,03,402/ - (RS.1,39,16,741/ - - RS.1,11,339/ - ) BY HOLDING THAT AN AMOUNT OF RS.1,11,339/ - BEING 7% OF RS.1,39,16,741/ - CAN BE ADDED AND NOT THE ENTIRE RECEIPTS, IGNORING THE FACT THAT ASSESSEE SUPPRESSED THE GROSS RECEIPTS OF RS.1,39,16,741/ - IN THE CASE OF M/S. GREWAL ASSOCIATES PVT. LTD. AS PER 26AS. (II). THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXPO RTING AND TRADING OF IRON ORE FINES AND ALSO ENGAGED IN TRANSPORTATION AND LOADING & UNLOADING OF MINERAL, WHICH IS ANCILLARY TO THE MAIN BUSINESS OF EXPORT CONTRACT ITA NO. 3332/DEL./2013 2 BUSINESS IN THE P&L ACCOUNT. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OU GHT TO HAVE UPHELD THE ADDITION OF RS.1,39,16,741/ - . 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXPORTING AND TRADING GOODS NAMELY IRON ORE FINES, TRANSPORTATION AND LOADING & UNLOADING OF MINERALS. HE FILED HIS RE TURN OF INCOME WITH CIRCLE 36(1), NEW DELHI ON 30.09.2009 AND LATTER FILED A REVISED RETURN ON 05.03.2010 DECLARING TOTAL INCOME OF RS.3,33,45,060/ - . THE RETURN OF INCOME WAS PROCESSED U/S. 143(1) ON 28.01.2011 AT THE INCOME DECLARED IN THE REVISED RETURN. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.1,39,16,741/ - ON THE GROUND THAT THERE IS A MISMATCH WITH FORM NO. 26AS. IN FORM NO. 26AS, THERE WAS DIFFERENCE OF ABOVE AMOUNT IN THE NAME OF ONE PARTY, GREWAL ASSOCIATE S PVT. LTD. SINCE THE ASSESSEE FAILED TO RECONCILE THE ABOVE DIFFERENCE, THE AO ADDED THE AMOUNT OF RS.1,39,16,741/ - TO THE INCOME OF ASSESSEE ON THIS ACCOUNT. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A), FOLLOWING THE DECISION O F CUTTACK BENCH OF ITAT, HELD THAT IN CASE OF THE DIFFERENCE BETWEEN THE ASSESSEE S BOOKS AND AS PER TDS CERTIFICATE, ONLY THE EMBEDDED PORTION OF PROFIT WAS TO BE ADDED TO THE ASSESSEE S INCOME AND NOT THE WHOLE OF THE RECEIPTS. IN THE ASSESSEE S CASE, NE T PROFIT RATE OF 2.25% HAS BEEN SHOWN. HOWEVER, IT IS SEEN THAT THIS PROFIT RATE IS IN RESPECT OF TWO TYPES OF BUSINESS BEING CARRIED BY THE APPELLANT, I.E., TRADING OF IRON ORE AND TRANSPORTATION AND LOADING & UNLOADING BUSINESS. THE RECEIPTS SHOWN SHORT BY THE ASSESSEE ARE IN THE NATURE OF CONTRACT RECEIPTS AS HAS BEEN OBSERVED BY THE AO IN THE ASSESSMENT ORDER. THE LEARNED CIT(A), AFTER CONSIDERING VARIOUS DECISIONS APPLICABLE TO THE CONTRACTORS CASES, APPLIED THE NET PROFIT RATE OF 8% TO BE A REASONABL E RATE ON THESE RECEIPTS BEING IN THE NATURE OF CONTRACT RECEIPTS AND THE SAME IS APPLIED TO THE ABOVE RECEIPTS NOT REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. AGGRIEVED BY THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE US. ITA NO. 3332/DEL./2013 3 3. DURING THE COUR SE OF HEARING, THE LD. DR SUBMITTED THAT WHILE RESTRICTING THE ADDITION TO RS.1 1,13,339 / - , THE LD. CIT(A) HAS IGNORED THE FACT THAT THE ASSESSEE HAD SUPPRESSED THE ENTIRE RECEIPTS OF RS.1,39,16,741/ - REPRESENTING THE DIFFERENCE BETWEEN TDS CERTIFICATE OF M /S. GREWAL ASSOCIATES PVT. LTD. AND THE RECEIPTS SHOWN BY ASSESSEE IN ITS BOOKS OF ACCOUNT. HE THEREFORE, SUBMITTED THAT THE ENTIRE SUPPRESSED RECEIPTS SHOULD BE ADDED TO THE INCOME OF THE ASSESSEE AS DONE BY THE ASSESSING OFFICER. ON THE OTHER HAND, THE L D. AR OF THE ASSESSEE RELIED ON THE ORDER OF THE FIRST APPELLATE AUTHORITY AND URGED FOR ITS SUSTENANCE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS , PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE ONLY QUESTION TO BE ADJUDICATED IN THIS APPEAL IS WHETHER THE ENTIRE DIFFERENCE OF RS. 1,39,16,741/ - BETWEEN TDS CERTIFICATE IN FORM 26AS AND THE RECEIPTS SHOWN BY ASSESSEE IN ITS BOOKS OF ACCOUNT , ARE LIABLE TO BE ADDED TO THE INCOME OF ASSESSEE OR ONLY THE PROFIT EMBEDDED I N THE ABOVE RECEIPTS NOT SHOWN BY ASSESSEE , HAS TO BE ADDED TO THE INCOME OF ASSESSEE. IN THIS CONTEXT, WE FIND THAT THE LD. FIRST APPELLATE AUTHORITY HAS APPLIED THE PROFIT RATE OF 8% TO THE DEFICIT CONTRACT RECEIPTS NOT SHOWN BY THE ASSESSEE IN ITS BOOK S OF ACCOUNT AND ACCORDINGLY ADDED A SUM OF RS.11,13,339/ - TO THE INCOME OF ASSESSEE, WHICH REPRESENTS THE PROFIT EMBEDDED TO THE RECEIPTS OF RS.1,39,16,741/ - . FOR THIS, THE LD. FIRST APPELLATE AUTHORITY HAS RELIED UPON A DIRECT DECISION OF ITAT, CUTTACK B ENCH IN THE CASE OF RR CARRYING CORPN. VS. ACIT, 126 TTJ 240 WHEREIN IT HAS BEEN HELD THAT IN CASE OF THE DIFFERENCE BETWEEN THE ASSESSEE S BOOKS AND AS PER TDS CERTIFICATE, ONLY THE EMBEDDED PORTION OF THE PROFITS HAS TO BE ADDED TO THE ASSESSEE S INCOME. NO CONTRARY DECISION IS BROUGHT TO OUR NOTICE BY THE LEARNED DR. EVEN THE REVENUE HAS NOT CHALLENGED THE RATE OF PROFIT APPLIED BY THE LD. CIT(A) IN THE GROUNDS OF APPEAL, RATHER WRONG FIGURES OF ITA NO. 3332/DEL./2013 4 RATE OF PROFIT AND ADDITION SUSTAINED BY LD. CIT(A) HAVE BE EN GIVEN IN THE GROUNDS OF APPEAL INASMUCH AS THE FIGURE OF ADDITION SUSTAINED BY CIT(A) IS SHOWN AT RS.1,11,339/ - IN PLACE OF 11,13,339/ - AND RATE OF PROFIT IS SHOWN AT 7% IN PLACE OF 8%. IN VIEW OF THIS DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE IM PUGNED ORDER AND THE SAME DOES NOT CALL FOR ANY INTERFERENCE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2015 . SD/ - SD/ - ( I.C. SUDHIR ) ( L.P. SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09.10.2015 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES , NEW DELHI