ACIT, New Delhi V. M/s ONS Creation Pvt. Ltd., New Delhi

ITA 3386/DEL/2012

• Counselvise Citation: 338620114 RSA 2012
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 10-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 29-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL SHARMA SENIOR
• Assessee Lawyers: VED JAIN CA SMT RANO JAIN; VENKTESH CHAURASIYA S
• Keywords: Additional evidence; Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3386/DEL./2012 (ASSESSMENT YEAR : 2008-09) ACIT, CIRCLE 13 (1), VS. M/S. ONS CREATION PVT. LT D., NEW DELHI. D 12/2, OKHLA INDL. AREA, PHASE II, NEW DELHI 110 020. (PAN : AAACO7606H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, CA, SMT. RANO JAIN AN D SHRI VENKTESH CHAURASIYA, ADVOCATES REVENUE BY : SHRI SUNIL SHARMA, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF THE CIT (APPEALS)-XVI, NEW DELHI DATED 31.01.2012 FOR THE A SSESSMENT YEAR 2008- 09. 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURING AND EXPORTING OF GARMENTS. THE RETURN OF INCOME WA S FILED ON 25.08.2008 DECLARING LOSS OF RS.48,41,090/-. THE ASSESSING OF FICER MADE THE ADDITIONS. THE ASSESSEE FILED THE APPEAL BEFORE THE CIT (A) WH O HAS GRANTED THE RELIEF. NOW, THE REVENUE IS IN APPEAL BY TAKING THE FOLLOWI NG GROUNDS OF APPEAL :- ITA NO.3386/DEL./2012 2 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN NOT ESTABLISHING THE FACT THAT THE TAI LORS ARE NOT ON THE COMPANY'S ROLL AND THE NAME OF THE TAILORS, MONTH O F PAYMENT AND EVEN THE AMOUNT OF PAYMENT ARE SAME FOR THE ASSESSEE COMPANY AS WELL AS FOR M/S OPERA HOUSE EXPORTS LTD. IN OTHER WORDS, THE SAME E MPLOYEE HAS WORKED AT THE SAME TIME FOR BOTH THE COMPANIES. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN NOT ACKNOWLEDGING THE FACT THAT THE AM OUNT OF RS.12,15,897/- IS ONLY THE CLOSING BALANCE AS MENTIONED VIDE LIST OF CREDITORS PROVIDED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AGAI NST M/S OPERA GLOBAL PVT. LTD. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN NOT ADMITTING THE FAD THAT THE QUESTIO N OF DEEMED DIVIDEND WHICH WAS CONSIDERED FOR ADDITION U/S 2(22)(E) WAS RS.1,21,58,879/- AND CONFRONTED TO ASSESSEE THROUGH SHOW CAUSE DATED 16. 12.2010. THE DEEMED DIVIDEND IS THE SUM OF ALL THE PAYMENTS RECEIVED DU RING THE YEAR AND NOT THE CLOSING BALANCE AT THE END OF THE YEAR. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN NOT ADMITTING THE FACT THAT THE ASSESS EE FAILED TO SUBMIT ANY RECTIFICATION IN THIS REGARD BEFORE THE AO DURING T HE ASSESSMENT PROCEEDING AND THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESS EE WITHOUT GRANTING ANY OPPORTUNITY TO THE AO TO VERIFY/EXAMINE THE SAME. 5. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FR ESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. 3. IN THE GROUND NO.1, THE ISSUE INVOLVED IS WITH R EGARD TO THE EXPENSES DEBITED UNDER THE HEAD FABRICATION CHARGES. 4. AT THE OUTSET OF THE HEARING, LD. AR SUBMITTED T HAT THE ISSUE RAISED IN THIS GROUND HAS BEEN ALREADY DECIDED BY THE ITAT IN THE SISTER CONCERNS CASE, I.E. M/S. OPERA HOUSE EXPORTS LTD. IN ITA NO.2752/D EL/2012 DATED 29.10.2013 WHEREIN THE ITAT HAS HELD AS UNDER :- 4. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE ASSESSEE IS ENGAGED IN THE JOB WORK AND A SISTER CONCERN OF THE ASSESSE E IN THE NAME OF M/S. ONS CREATION PVT. LTD. WAS ALSO ENGAGED IN THE SAME BUSINESS. SCRUTINY ASSESSMENTS OF BOTH WERE GOING ON TOGETHER. DURING THE ASSESSMENT PROCEEDINGS OF ASSESSEE, THE DETAILS OF JOB WORK CH ARGES OF M/S. ONS ITA NO.3386/DEL./2012 3 CREATION PVT. LTD. WERE FILED IN THE CASE OF ASSESS EE INADVERTENTLY AND THIS CREATED A MISUNDERSTANDING AND ASSESSING OFFICER HE LD THE JOB CHARGES OF ASSESSEE WERE NOT GENUINE AND FABRICATED. IN THE AP PEAL BEFORE THE CIT (A), THE ASSESSEE SUBMITTED THE CURRENT DETAILS OF JOB C HARGES ALONG WITH NECESSARY DETAILS. THE CIT (A) ADMITTED THE ADDITIO NAL EVIDENCES AND ON THAT BASIS, THE RELIEF HAS BEEN GRANTED. THESE EXPE NSES WERE PAID TO VARIOUS TAILORS WORKING WITH THE ASSESSEE AS SALARY/WAGES T O TAILORS/WORKERS AND WERE BOOKED UNDER THE HEAD FABRICATION CHARGES AS AGAINST THE HEAD SALARY AND WAGES. THE WAGE SHEET WAS ALSO PRODUCE D. SINCE NO AMOUNT WAS PAID TO ANY OF THE EMPLOYEE EXCEEDING THE MINIM UM LIMIT TO ATTRACT THE TDS PROVISIONS, THEREFORE, NO TDS WAS DEDUCTED. NO DEFECTS HAVE BEEN FOUND IN THE WAGE SHEETS PRODUCED BEFORE THE AUTHOR ITIES BELOW EVIDENCING THE PAYMENTS TO VARIOUS TAILORS AND LABORERS. THE R EVENUE HAS FAILED TO NEGATE THE GENUINENESS OF THE WAGE SHEETS PRODUCED BEFORE THE AUTHORITIES BELOW. KEEPING THESE FACTS IN VIEW, WE FIND NO MERI TS IN THE APPEAL OF THE REVENUE, HENCE THE SAME STANDS DISMISSED. 5. AFTER HEARING BOTH THE SIDES ON THE ISSUE, WE FI ND THAT ITAT HAS ALREADY DECIDED THE ISSUE ON THIS GROUND IN THE OTHER SISTE R CONCERNS CASE WHEREIN THE APPEAL OF THE REVENUE HAS BEEN DISMISSED ON THIS GR OUND BY HOLDING THAT THE ASSESSEE AND SISTER CONCERNS WERE ENGAGED IN THE SA ME BUSINESS AND SCRUTINY OF ASSESSMENTS WERE GOING ON SIMULTANEOUSLY AND THE DETAILS OF JOBWORK CHARGES OF M/S. ONS CREATIONS PVT. LTD. WERE FILED IN THE CASE OF M/S. OPERA HOUSE EXPORTS LTD. INADVERTENTLY AND BY THIS MISUND ERSTANDING, THE ASSESSING OFFICER REACHED AT THE CONCLUSION THAT JOBWORK CHAR GES WERE NOT GENUINE AND FABRICATED. HOWEVER, BY FILING THE CORRECT DETAILS BEFORE THE CIT (A), THE ASSESSEE WAS ABLE TO GAIN THE RELIEF. SINCE THE IS SUE IS INTER-CONNECTED TO THE CASE OF M/S. OPERA HOUSE EXPORTS LTD. WHEREIN THE R ELIEF HAS BEEN GRANTED BY THE ITAT, THEREFORE, RESPECTFULLY FOLLOWING THE SAM E, WE DISMISS THIS GROUND OF REVENUES APPEAL ALSO. ITA NO.3386/DEL./2012 4 6. IN THE GROUND NOS.2 TO 4, THE ISSUE IS REGARDING DELETING THE PART ADDITION MADE BY INVOKING THE PROVISIONS OF SECTION 2(22)(E) OF THE INCOME-TAX ACT, 1961. 7. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THIS PART RELIEF HAS BEEN GRANTED BY THE CIT (A) BY ACCEPTING THE FACT THAT T HERE WAS A TYPOGRAPHICAL MISTAKE WHERE THE CORRECT FIGURE OF AMOUNT IN RESPE CT OF CREDITOR, M/S. OPERA HOUSE EXPORTS LTD. WAS RS.12,15,897/- INSTEAD OF RS .1,21,58,879/-. SINCE THIS RELIEF HAS BEEN GRANTED ONLY BY ACCEPTING A TY PING MISTAKE/CLERICAL MISTAKE AND THE REVENUE WAS NOT ABLE TO GIVE ANY CO NTRARY FIGURE OF THE CREDIT BALANCE IN THE NAME OF M/S. OPERA HOUSE EXPORTS LTD ., THEREFORE, WE FIND NO FAULT IN THE ORDER OF THE CIT (A). WE SUSTAIN THE SAME. ACCORDINGLY, GROUNDS NO.2 TO 4 ARE DISMISSED. 8. GROUND NO.5 IS GENERAL IN NATURE AND DOES NOT RE QUIRE ANY ADJUDICATION, HENCE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 25 TH DAY OF JULY, 2014. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 25 TH DAY OF JULY, 2014 TS ITA NO.3386/DEL./2012 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.