The Exchange Agencies, Delhi V. ITO, New Delhi

ITA 3352/DEL/2013

• Counselvise Citation: 335220114 RSA 2013
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 18-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J P CHANDREKAR
• Assessee Lawyers: LALITA KRISH NAMURTY
• Keywords: Depreciation; Revised return; Unabsorbed depreciation
• Section: 143(3); 142(1); 234B; 154

Judgement Text

ITA NO. 3352/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. NO. 3 352 /DEL/2013 A.Y. : 2009 - 10 THE EXCHANGE AGENCIES, 13, ALIPUR ROAD, CIVIL LINES, DELHI 110 054 (PAN: AAAFT0754C ) VS. INCOME TAX OFFICER, WARD - 20 (2), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. LALITA KRISHNAMURTY, CA DEPARTMENT BY : SH. J.P. CHANDREKAR, SR. DR DATE OF HEARING : 18 - 06 - 201 5 DATE OF ORDER : 2 4 - 06 - 201 5 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - XX II , NEW DELHI DATED 30 . 3 .201 3 P ERTAINING TO ASSESSMENT YEAR S 2009 - 10 . 2. THE GROUNDS RAISED BY THE ASSESSEE READS AS UNDER: - 1. THAT THE SUSTAINING OF DISALLOWANCE OF BROUGHT FORWARD UNABSORBED BUSINESS LOSS CLAIMED OF RS. 3,75,293/ - AND UNABSORBED DEPRECIATION CLAIMED OF RS. 6,77,240/ - IS UNJUST, UNWARRANTED AND NOT TENABLE ON FACTS AND IN LAW. 2. THAT THE AUTHORITIES BELOW OUGHT TO HAVE TAKEN THE INCOME FROM BUSINESS OR PROFESSION AT RS. 11,72,363/ - ITA NO. 3352/ DEL/ 2013 2 AS PER REVISED RETURN AND NOT RS. 13,10,582/ - TAKEN IN THE ASSESSMENT ORDER. 3. THAT THE SUSTAINING OF ADHOC DISALLOWANCE OF TELEPHONE EXPENSES OF RS. 24,334/ - @20% OF CLAIM IS ARBITRARY, UNJUST AND AT ANY RATE VERY EXCESSIVE COMPARED TO PREVIOUS YEARS MORE PARTICULARLY FBT HAD BEEN PAID ON SUCH EXPENSES IN THE RELEVANT YEAR. 4. THAT THE SUSTAINING OF ADHOC DISALLOWANCE OF V EHICLE MAINTENANCE OF RS. 1,18,400/ - @20% OF CLAIM IS ARBITRARY, UNJUST AND AT ANY RATE VERY EXCESSIVE COMPARED TO PREVIOUS YEARS MORE PARTICULARLY WHEN FBT HAS BEEN PAID ON SUCH EXPENSE IN THE RELEVANT YEAR. 5. THAT THE ASSESSING OFFICER BE DIRECTED TO GRANT CONSEQUENTIAL RELIEF ON ACCOUNT OF INTEREST CHARGED UNDER SECTION 234B AND WITHDRAWN UNDER SECTION 234D. 6. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. 7. YOU APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10 ON 29.9.2009 DECLARING OF RS. 1,19,829/ - . THE RETURN WAS PROCESSED U/S. 143(1) OF THE I.T. ACT. THE CASE WAS SELECTED FOR SCRUTINY AND FIRST NOTICE U/S. 143(2) WAS ISSUED 15.9.2010, WHICH WAS SERVED UPON THE ASSESSEE THROUGH SPEED POST. IN RESPONSE TO NOTICES ISSUED U/S. 143(2) AND 142(1) SMT. LALITA KRISHNAMURTHY, CA ATTENDED THE PROCEE DINGS FROM TIME TO TIME. IN THIS CASE THE ASSESSEE FIRM DERIVES FROM DISTRIBUTION ITA NO. 3352/ DEL/ 2013 3 OF BREAD MANUFACTURED BY BRITANNIA INDUSTRIES LTD. AS IN THE PAST. THE ASSESSEE HAS CLAIMED BREAD DEALER DISCOUNT OF RS. 45,70,903/ - TO VARIOUS DEALERS, WHICH INCLUDES AN AMOUNT OF RS. 45,58,252/ - BEING PAID IN CASH TO PARTIES FROM WHOM THE AMOUNT EXCEEDED RS. 2500/ - . IN THE ASSESSMENT ORDER, THE AO TREATED THE SAID DISCOUNT AS COMMISSION TO THE DEALERS, AND AS NO TDS HAS BEEN DEDUCTED ON THE INCENTIVE / DISCOUNT PAID TO THE DEALERS THE AO DISALLOWED SUCH PAYMENTS AMOUNTING TO RS. 45,58,252/ - U/S. 40(A)(IA) OF THE I.T. ACT. THE AO HAS ALSO MADE PART DISALLOWANCE OUT OF VEHICLE EXPENSES OF RS. 1,18,400/ - AND OUT OF TELEPHONE EXPENSES OF RS. 24,334/ - , WHICH WERE ADDED TO TH E TOTAL INCOME AND ALSO DISALLOWED THE CLAIM OF BROUGHT FORWARDED LOSSES AND COMPLETED THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT, 1961 VIDE ORDER DATED 29.11.2011. 4. AGGRIEVED WITH THE AFORESAID ASSESSMENT ORDER DATED 29.11.2011, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER 30.3.2013 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGAINST THE AFORESAID ORDER OF THE LD. CIT(A), ASSESSEE IS IN A PPEAL BEFORE THE TRIBUNAL. 6. LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, SMT. LALITA KRISHNAMURTY, CA STATED THAT AO HAS MADE THE DISALLOWANCE IN DISPUTE CONTRARY TO THE FACTS AND LAW WHICH DESERVE TO BE DELETED. SHE FURTHER STATED THAT THE LD. FIR ST APPELLATE AUTHORITY HAS SUSTAINED THE DISALLOWANCE OF BROUGHT FORWARD UNABSORBED BUSINESS LOSS IN DISPUTE AND UNABSORBED DEPRECIATION WHICH IS CONTRARY TO THE RECORD OF THE CASE. SHE FURTHER STATED THAT THE LD. CIT(A) OUGHT TO HAVE TAKEN THE INCOME FROM BUSINESS OR PROFESSION AT RS. 11,72,363/ - AS PER THE REVISED RETURN AND NOT RS. 13,10,582/ - TAKEN IN THE ASSESSMENT ORDER. AS REGARDS THE OTHER ITA NO. 3352/ DEL/ 2013 4 DISALLOWANCES ON ACCOUNT OF TELEPHONE EXPENSES AND VEHICLE EXPENSES, SHE STATED THAT THESE DISALLOWAN CES ARE NOT WARRANTED IN VIEW OF THE DECISION OF THE ITAT, MUMBAI BENCH IN THE CASE OF SGS INDIA PRIVATE LIMITED VS. ADDL. CIT IN ITA NO. 3499/MUM/2011. FINALLY, SHE STATED THAT THE ISSUE INVOLVED IN GROUND NO. 1 AND 2 REQUIRES RECONSIDERATION AT THE LE VEL OF THE AO, BECAUSE THE ASSESSEE HAS FILED THE APPLICATION U/S. 154 OF THE I.T. ACT, 1961 AGAINST THE ORDER U/S. 143(3) OF THE ACT DATED 29.11.2011 WHEREIN ALL THE RELEVANT EVIDENCE ON THE ISSUE IN DISPUTE HAS BEEN FILED AND THE AO AS WELL AS THE LD. F IRST APPELLATE AUTHORITY HAS NOT APPRECIATED THE SAME, WHICH REQUIRES RE - EXAMINATION AT THE LEVEL OF THE AO. BUT AS REGARDS TO ISSUE INVOLVED IN GROUND NO. 3 & 4 SHE STATED THAT THE SAME IS COVERED IN FAVOR OF THE ASSESSEE, IN VIEW OF THE DECISION OF THE ITAT, MUMBAI BENCH IN THE CASE OF SGS INDIA PRIVATE LIMITED VS. ADDL. CIT IN ITA NO. 3499/MUM/2011 AND THE ISSUE INVOLVED IN GROUND NO. 5 REGARDING THE INTEREST CHARGED U/S. 234B & 234D ARE CONSEQUENTIAL. 7. ON THE CONTRARY, LD. DEPARTMENTAL REPRESENT ATIVE RELIED UPON THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY. 8. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS AVAILABLE ON RECORD, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND WE ARE OF THE VIEW THAT THE ASSESSEE HAS FILED A PAPER B OOK CONTAINING PAGES 1 TO 33 IN WHICH THE ASSESSEE HAS ENCLOSED VARIOUS DOCUMENTARY EVIDENCE SUPPORTING ITS CLAIM. WE HAVE GONE THROUGH THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND WE ARE OF THE VIEW THAT ASSESSEE HAS ELABORATELY DISCLOSED IN THE APP LICATION U/S. 154 OF THE I.T. ACT TO THE AO REGARDING INCOME ASSESSED BY THE AO AS WELL AS THE INCOME DECLARED BY THE ASSESSEE. IN THE APPLICATION, THE ASSESSEE S AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSEE IS IN RECEIPT OF ASSESSMENT ORDE R WHEREIN INCOME DECLARED ITA NO. 3352/ DEL/ 2013 5 BY THE ASSESSEE (BEFORE ADJUSTMENT OF BROUGHT FORWARD LOSSES/UNABSORBED DEPRECATION CLAIMED OF RS. 10,52,533/ - ) HAS BEEN SHOWN IN THE LAST PAGE OF THE ASSESSMENT ORDER AT RS. 13,10,582/ - . WHEREAS THE INCOME DECLARED BY THE ASSES SEE BEFORE SUCH ADJUSTMENT (AS PER COMPUTATION FILED UNDERCOVER WITH LETTER DATED 28.5.2011) IS RS. 11,72, 36 3/ - . THE ASSESSEE HAS ALSO ENCLOSED THE COMPUTATION OF INCOME FOR THE ASSESSMENT YEARS 2005 - 06, 2006 - 07, 2007 - 08 & 2008 - 09 WITH THE SAID LETTER D ATED 25.8.2011 TO THE AO. THE ASSESSING OFFICER AND THE LD. FIRST APPELLATE AUTHORITY HAS NOT APPRECIATED THE CONTENTION OF THE ASSESSEE. IN OUR CONSIDERED VIEW THE ISSUE INVOLVED IN GROUND NO. 1 AND 2 REGARDING THE DISALLOWANCES OF BROUGHT FORWARD BUSINE SS LOSS/ UNABSORBED DEPRECATION ARE REQUIRED TO BE REEXAMINED AT THE LEVEL OF THE AO. THEREFORE, WE SET ASIDE THE ISSUE INVOLVED IN GROUND NO. 1 AND 2 TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH, UNDER THE LAW, AFTER GIVING ADEQUATE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 8.1 AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 3 AND 4 REGARDING ADHOC DISALLOWANCE ON ACCOUNT OF TELEPHONE EXPENSES OF RS. 24,334/ - @20% OF THE CLAIM AND THE DISALLOWANCE ON ACCOUNT OF VEHICLE EXPENSES OF RS. 1,18,400/ - @20% , AS STATED BY THE LD. COUNSEL OF THE ASSESSEE THE ISSUE INVOLVED IN GROUND NO. 3 AND 4 ARE COVERED IN FAVOR OF THE ASSESSEE, IN VIEW OF THE DECISION OF THE ITAT, MUMBAI BENCH IN THE CASE OF SGS INDIA PRIVATE LIMITED VS. ADDL. CIT IN ITA NO. 3499/MUM/2 011 . WE ALSO FIND THAT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE LD. CIT(A) IN THE CASE OF THE ASSESSEE IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2007 - 08 AND 2008 - 09 WHICH HAVE ATTAINED FINALITY. ASSESSEE HAS ALSO FILED THE COPY OF THE ORDER OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2007 - 08 AND 2008 - 09 WITH THE PAPER BOOK. KEEPING IN VIEW OF THE AFORESAID DECISION OF THE ITAT, MUMBAI BENCH AND THE DECISION OF ITA NO. 3352/ DEL/ 2013 6 THE LD. CIT(A) IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2007 - 08 AND 2008 - 09, WE ARE OF THE VIEW THAT THE ADHOC ADDITION ON ACCOUNT OF TELEPHONE EXPENSES AND VEHICLE MAINTENANCE EXPENSES ARE NOT REQUIRED IN THE CASE OF THE ASSESSEE, THEREFORE, BOTH THE ADDITIONS ARE DELETED AND THE GROUND NO. 3 AND 4 ARE DECIDED IN FAVOR OF THE ASSESSEE . 8.2 AS REGARDS ISSUE INVOLVED IN GROUND NO. 5 REGARDING CHARGING OF INTEREST U/S. 234B AND 234D ARE CONCERNED, THE SAME IS CONSEQUENTIAL IN NATURE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE O PEN C OURT ON 2 4 / 06 /20 1 5 . S D / - S D / - [ J.S. REDDY ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 2 4 / 06 /201 5 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