ITO, New Delhi V. M/s N N Agencies Pvt. Ltd., New Delhi

ITA 3684/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65770 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 05-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 01-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SEHGAL
• Keywords: Additional evidence

Judgement Text

ITA NO. 3684/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3684/DEL/2011 A.Y. : 2008-09 INCOME TAX OFFICER, WARD 13(1), ROOM NO. 219, CR BUILDING, NEW DELHI VS. M/S NN AGENCIES PVT. LTD., 17-A/10, WEA KAROL BAGH, NEW DELHI - 110005 (PAN/GIR NO. : AAACN9429K) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. K. SAMPATH, ADVOCATE DEPARTMENT BY : SH. DEEPAK SEHGAL, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XVI, NEW DEL HI DATED 21.3.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED READ AS UNDER:- I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (A) ERRED I N DIRECTING TO DELETE THE ADDITION OF ` 21,27,160/- MADE TO THE INCOME OF THE ASSESSEE. II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (A) FAILED ITA NO. 3684/DEL/2011 2 TO APPRECIATE THE FACTS DISCUSSED IN DETAILS IN THE ASSESSMENT ORDER AND IN PARTICULAR THE FACTS DISCUS SED IN PARA 7(A) TO (H) AND 8 OF THE ASSESSMENT ORDER. III) THE LD. COMMISSIONER OF INCOME TAX (A) MADE A REFERENCE TO VARIOUS ADDITIONAL EVIDENCES AND ACCEPTED THE SAME WITHOUT PROVIDING ANY OPPORTUNITY TO THE ASSESSING OFFICER FOR VERIFICATION A REQUIR ED UNDER RULE 46A OF THE I.T. RULES. IV) THE APPELLANT CRAVES TO BE ALLOWED TO ADD, DELE TE OR AMEND ANY OTHER GROUNDS OF APPEAL. 3. IN THIS CASE THE ASSESSEE COMPANY IS ENGAGED IN T HE BUSINESS OF TRADING IN READY MADE GARMENTS, SHOES AND ACCESSORIE S AND HAS ALSO SHOWN INCOME FROM OTHER SOURCES. ASSESSEE COMPANY HAD TAKEN ON LEASE A SHOP IN GIP AT NOIDA FROM MS. ALKA AGARWAL . THE COMPANY HAD PAID THE RENT TO MS. ALKA AGARWAL AMOUNTING TO ` 15,06,738/-. THE TAX WERE DEDUCTED AND DEPOSITED ON TIME. ASS ESSEE COMPANY COULD NOT START ITS BUSINESS ACTIVITY FROM THE SHOP DURING THE YEAR. THEREAFTER, THE SHOP WAS GIVEN ON RENT (SUB-LET) TO M/S PALL MALL. THE ASSESSEE COMPANY RECEIVED RENT ON THE SAID SUB-LET SHOP FOR AN AMOUNT OF ` 21,27,160/-. DURING THE YEAR THE ASSES SEE COMPANY HAS ALSO INCURRED SHOP MAINTENANCE EXPENSES OF MALL OF ` 6,54,390/- PAID TO INTERNATIONAL RECREATION PARK P LTD. HOWEVER, A SUM OF ` 1,76,270/- WAS CHARGED FROM M/S PALL MALL ON ACCOUN T OF MAINTENANCE. THE GIST OF THE TRANSACTIONS ARE AS UNDER:- I)RENT RECEIVED ON ACCOUNT OF SHOP SUB-LET TO M/S PAL L MALL ` 21,27,160/- II)RENT PAID TO ALKA AGARWAL ` 15,06,738/- ITA NO. 3684/DEL/2011 3 III) SHOP MAINTENANCE EXPENSES AT MALL PAID ` 6,54,390/- RECOVERED ` 176270/- ` 4,78,120/- ` 19,84, 858/- NET RECEIPTS ON ACCOUNT OF RENT ` 14230 2/- 3.1 ASSESSING OFFICER WANTED TO VERIFY THE ABOVE T RANSACTIONS. HENCE, HE ISSUED QUESTIONNAIRE IN THIS REGARD. A SSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSE E. HE OPINED THAT THE TRANSACTIONS OF RENT RECEIVED AND RENT PAID WERE NO T GENUINE, BUT THE RECEIPT OF ` 21,27,160/- IS ASSESSEES UNACCOUNTED MONEY INTRODUCED IN THE GARB OF LEASE RENT RECEIVED FROM M/S PALL MALL. HENCE, THE ENTIRE AMOUNT OF ` 21,27,160/- WAS ASSESSED AS INCOME FROM OT HER SOURCES AND NOT AS LEASE RENT FROM M/S PALL MALL AND NO DEDUC TION WAS GIVEN IN RESPECT OF ALLEGED LEASE RENT PAID TO ALKA AGARWAL AND MAINTENANCE CHARGES PAID BY THE ASSESSEE. ASSESSING OFFICER FURTHER OBSERVED THAT THE SO-CALLED LEASE DEED EXECUTED ON 23.10.20 08 AND COPY OF SO CALLED AGREEMENT STATED TO BE ENTERED INTO BY THE A SSESSEE WITH PALL MALL ARE ONLY AFTER THOUGHTS BECAUSE THE STAMP PAPERS FOR THE SAID LICENSE DEED HAVE BEEN PURCHASED ON 17.9.2008. A SSESSING OFFICER CONCLUDED THAT ASSESSEE HAS NOT FILED SUBSTANTIATIN G EVIDENCES IN SUPPORT OF TRANSACTIONS RELATING TO THE EARNING OF LEASE RENTAL, MAINTENANCE CHARGES. HENCE, ASSESSING OFFICER ADD THE INCOME FROM OTHER SOURCES AMOUNTING TO ` 21,27,160/-. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT ASSESSEE HAS FILED EVIDENCES BY WAY OF B ILLS FOR RENT RAISED BY IRPPL AND MRS. ALKA AGARWAL, THE LEASE AGREEMENT SIGNED BY THE ASSESSEE WITH MRS. ALKA AGARWAL, THE DETAILS OF PAYM ENT OF SERVICE TAX ITA NO. 3684/DEL/2011 4 AND TDS INTO THE GOVERNMENT ACCOUNT. LD. COMMISSIO NER OF INCOME TAX (A) NOTED THAT THERE IS A LETTER FROM MRS. ALKA AGGARWAL TO THE ASSESSEE INFORMING THAT THE PROPERTY IN THE GREAT IN DIA PLACER HAS BEEN PURCHASED BY HER AND THAT RENT WITH EFFECT FROM JUL Y, 2007 ONWARDS IN RESPECT OF THAT PROPERTY WOULD HAVE TO BE PAID TO HER. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT THE EXPLANATION OF THE ASSESSEE THAT ALTHOUGH THE LEASE AGREEMENT W AS ENTERED INTO BY IT WITH MRS. ALKA AGGARWAL IN OCTOBER, 2008, IT STA RTED PAYING RENT TO HER WITH EFFECT FROM JULY, 2007 IS QUITE PLAUSIBL E. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT IN THE AGRE EMENT IT IS CLEARLY WRITTEN THAT THE AGREEMENT WAS RETROSPECTIVE AND AL SO TDS HAS BEEN DEDUCTED FROM THE RENT PAID BY THE ASSESSEE TO MRS . ALKA AGARWAL. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED T HAT THE DELAY IN EXECUTION AND SIGNING OF THE LEASE AGREEMENT HAS BE EN ATTRIBUTED TO THE FACT THAT THERE WAS DELAY IN GETTING THE DOCUM ENTATION COMPLETED IN RESPECT OF THE PROPERTY IN GREAT INDIA PLACE. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT THE CASE OF TH E ASSESSEE IN REGARD TO LETTING OUT OF THE PREMISES TO M/S PALL MALL GETS SUPPORT FORM THE FACT THAT THE SALE TAX REGISTRATION CERTIFICAT E DATED 07.5.2007 OF M/S PALL MALL MENTIONS THE ADDRESS OF THE PREMISES IN G REAT INDIA PLACE AS THE PRINCIPAL PLACE OF ITS BUSINESS. LD. COMMIS SIONER OF INCOME TAX (A) FURTHER NOTED THAT M/S PALL MALL HAS CLAIMED THE PAYMENT OF RENT TO THE ASSESSEE IN ITS I.T. RETURN. CONSIDE RING THE ABOVE LD. COMMISSIONER OF INCOME TAX (A) OBSERVED THAT IF THE ASSESSING OFFICER BELIEVED THAT THE RENTAL RECEIPTS FROM M/S PALL MALL WERE ACTUALLY THE ASSESSEES UNDISCLOSED INCOME, THE ONUS WAS ON THE ASSESSING OFFICER TO PROVE THE SAME. THE SAID ONUS HAS NOT BEEN D ISCHARGED BY THE ITA NO. 3684/DEL/2011 5 ASSESSING OFFICER. ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX (A) DELETED THE ADDITION IN THIS REGARD. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND IN TH IS CASE THAT THE ASSESSEE HAS SUBMITTED ALL THE NECESSARY DOCUMENTATI ON REGARDING THE LEASE RENT PAID AND THE AMOUNT RECEIVED FROM SUB- LETTING THE PREMISES. THE DETAILS OF PAYMENT OF SERVICE TAX AND TDS IN THIS REGARD WAS ALSO FURNISHED. THERE IS ALSO A LETTER FRO M MRS. ALKA AGGARWAL TO THE ASSESSEE INFORMING THAT THE PROPERTY IN THE GREA T INDIA PLACE HAS BEEN PURCHASED BY HER AND THE RENT W.E.F. JULY, 200 7 ON WARDS IN RESPECT OF THE PROPERTY WOULD HAVE TO BE PAID TO H ER. WE FIND CONSIDERABLE COGENCY IN THE EXPLANATION OF THE ASSE SSEE THAT ALTHOUGH THE LEASE AGREEMENT WAS ENTERED INTO BY IT WITH MRS . ALKA AGGARWAL IN OCTOBER, 2008, IT STARTED PAYING RENT TO HER WITH E FFECT FROM JULY, 2007. THIS IS FORTIFIED BY THE FACT THAT THERE IS MENTION IN THE SAID AGREEMENT THAT IT IS RETROSPECTIVE AND ALSO THE TDS HAS BEEN D EDUCTED FROM THE RENT PAID BY THE ASSESSEE TO MRS. ALKA AGGARWAL AND PAID INTO THE GOVERNMENT ACCOUNT. UNDER THE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, ASSESSEE HAS GIVEN COGENT SUBMISSIONS REGA RDING THE AMOUNT RECEIVED ON ACCOUNT OF SUB-LETTING OF THE PROPERTY. THE ASSESSING OFFICERS CONCLUSION THAT THE SAME IS AN AFTER TH OUGHT IS NOT SUBSTANTIATED. 6.1 THE REVENUE HAS ALSO RAISED IN THIS REGARD A GR OUND THAT LD. COMMISSIONER OF INCOME TAX (A) HAS ACCEPTED VARIOUS ADDITIONAL EVIDENCES WITHOUT PROVIDING ANY OPPORTUNITY TO THE ASSESSING OFFICER FOR VERIFICATION AS REQUIRED UNDER RULE 46A OF THE I.T. RULES. HOWEVER, ITA NO. 3684/DEL/2011 6 WE FIND THAT LD. DEPARTMENTAL REPRESENTATIVE HAS NOT BEEN ABLE TO POINT OUT THE ADDITIONAL EVIDENCES IN THIS REGARD W HICH WERE ACCEPTED BY THE LD. COMMISSIONER OF INCOME TAX (A) IN VIOLATIO N OF RULE 46A. IN OUR CONSIDERED OPINION, THE REQUISITE SUBMISSION WER E DULY MADE BEFORE THE ASSESSING OFFICER ALSO AND HENCE, THERE IS NO VIOLATION OF RULE 46A IN THIS REGARD. UNDER THE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE L D. COMMISSIONER OF INCOME TAX (A). ACCORDINGLY, WE UPHOLD THE SAME. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/11/2012. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 09/11/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES