ACIT CIR 1, THANE V. EDENRED (INDIA) P.LTD, THANE

ITA 3966/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3828 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M A GOHEL
• Keywords: Gift; Avoidance of tax
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 2952/MUM/2014 ( / ASSESSMENT YEAR: 2008-09) EDENRED (INDIA) PVT. LTD. (FORMERLY KNOWN AS ACCOR SERVICES PVT. LTD.) CAMERA HOUSE, MAJIWADE VILLAGE RD., THANE 400 601 / V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE I ASHER IT PARK, 6 TH FLOOR, WAGLE ESTATE, THANE 400 604 ./ PAN : AADCA 0307 Q ( / APPELLANT ) .. ( / RESPONDENT ) ./ I.T.A. NO. 3966/MUM/2014 ( / ASSESSMENT YEAR: 2008-09) ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE I ASHER IT PARK, 6 TH FLOOR, WAGLE ESTATE, THANE 400 604 / V. EDENRED (INDIA) PVT. LTD. (FORMERLY KNOWN AS ACCOR SERVICES PVT. LTD.) CAMERA HOUSE, MAJIWADE VILLAGE RD., THANE 400 601 ./ PAN : AADCA 0307 Q ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI M.A. GOHEL (AR) REVENUE BY : SHRI RAKESH RANJAN (DR) / DATE OF HEARING : 30-11-2015 / DATE OF PRONOUNCEMENT : 24-02-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THESE ARE CROSS APPEALS FILED BY THE ASSESSEE COMPA NY AND THE REVENUE DIRECTED AGAINST THE ORDER BY THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS)-II, THANE (CIT(A) FOR SHORT) DATED 13.03.2014, FOR THE ASSESSMENT YEAR 2008-09. ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 2 BOTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF BREVITY. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE COM PANY IN ITS APPEAL BEING ITA NO. 2952/MUM/2014 FILED WITH THE TRIBUNAL READ AS UNDER: I ADDITION FOR UNCLAIMED VOUCHERS RS. 4,05,54,220/ - 1.1 THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)(CIT (APPEALS)) ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNE D ASSESSING OFFICER IN RESPECT OF ALLEGED UNCLAIMED VOUCHERS OF RS.4,05,54,220/- 1.2 THE LEARNED CIT(APPEALS) FAILED TO APPRECIATE THAT THE LIABILITY OF RS.4,05,54,220 WAS IN RESPECT OF UNCLAIMED VOUCHERS FOR TC 2007 AND THE EXPIRY DATE IN RESPECT THEREOF WAS 31.12.20 08 I.E. RELEVANT TO SUBSEQUENT YEAR AND NOT THE YEAR UNDER APPEAL. A CCORDINGLY, THE QUESTION OF WRITING BACK THE SAME DOES NOT ARIS E. 1.3 THE LEARNED CIT(A) FAILED TO APPRECIATE THE DETAILS FURNISHED AND THE EXPLANATIONS OFFERED BY THE APPELLANT IN SUPPOR T OF ITS CONTENTIONS. THE GROUND RAISED BY THE REVENUE IN ITS APPEAL BEIN G ITA NO. 3966/MUM/2014 FILED WITH THE TRIBUNAL READ AS UNDER : 1 THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,02,97,025 ON THE ARGUMENT THAT IT HAS BEEN TAXED IN A.Y. 2009-10 AND 2010-11 AND THAT THIS SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE AO WITHOUT APPRECIATING THE FACT THAT AN ASSESS MENT ORDER PASSED WITH UNDETECTED WRONG POLICY /METHOD OF ACCOUNTANCY FOLLOWED BY THE ASSESSEE DOES NOT JUSTIFY DELETION OF THE ADDITION MADE IN AN EARLIER YEAR. ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 3 2. THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,02,97,025 ON THE ARGUMENT THAT THE AMOUNT REPRESENTING THE UNCLAIMED /EXPIRED VOUCHERS HAVE BEEN TAXED IN A.Y.2009-10 AND A.Y.2010-11 WITH OUT APPRECIATING THE FACT THAT THE LIABILITY TO PAY THE AMOUNT IN RE SPECT OF THESE VOUCHERS HAD CEASED PRIOR TO 31.03.2008 AND HENCE IS RIGHTLY TAXABLE IN AN EARLIER ASSESSMENT YEAR AND NOT IN A.Y.2009-10 AND A.Y.2010 -11 ( WHICH AMOUNTS TO POSTPONING OF TAX LIABILITY WITHOUT ANY BASIS.) 3. THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,02,97,025 INSTEAD OF SUSTAINING IT BY APPLYING THE PRINCIPLE OF THE Y EAR OF TAXING IT ON THE SAME STAND ON WHICH THE CIT(A) SUSTAINED THE ADDITI ON OF RS.4,05,54,220 RELATING TO UNCLAIMED/UNEXPIRED VOUCHERS TC 2006 WI TH EXPIRY DATE 31 ST DEC 2008 BY TAXING IT IN THE SAME YEAR AND NOT POST PONING IT TO THE NEXT TWO YEARS FOR TAXATION. 4. THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,02,97,025 ON THE ARGUMENT THAT IT HAS BEEN OFFERED IN A.Y.2009-10 AN D 2010-11(I.E. TAXING IT AFTER 1 OR 2 YEARS OF ITS DUE PERIOD) AS PER REG ULAR METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE WITHOUT APPRECIATING THE F ACT THAT THE ASSESSEE IS NOT CONSISTENTLY FOLLOWING SUCH ACCOUNTING METHO D WHICH CAN BE SEEN FROM CIT(A)S OWN DECISION OF SUSTAINING ADDITION O F RS.4,05,54,220 RELATING TO UNEXPIRED VOUCHERS TC 2006 AND ALSO COM PARING THE ACCOUNTING POLICY FOLLOWED BY THE ASSESSEE IN A.Y.2 011-12 AND A.Y.2012-13 WHERE THERE IS NO POSTPONEMENT OF TWO Y EARS. 5. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 4 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF THE PREPAID VOUCHERS/ COUPONS I.E. FOOD COUPONS AND COMPLIMENTARY COUPONS. THE ASSESSEE COMPANY PROVIDE S MEAL AND GIFT VOUCHERS TO ITS CORPORATE CUSTOMERS. THE CUSTOMERS THEN PROVIDES THESE VOUCHERS TO THEIR RESPECTIVE EMPLOYEES AS PART OF T HEIR SALARY. THE PAYMENT FOR THE VOUCHERS IS RECEIVED BY THE ASSESSEE COMPAN Y EITHER IN ADVANCE OR WITHIN A SHORT PERIOD FROM THE DATE OF SUPPLY. THE INVOICE IS RAISED BY THE ASSESSEE COMPANY FOR FULL FACE VALUE OF THE VOUCHER S/ COUPON PLUS SERVICE CHARGES AS APPLICABLE. THUS, THE ASSESSEE COMPANY G ETS FULL FACE VALUE OF THE COUPONS/ VOUCHERS AT THE INITIAL STAGE OF TRANSACTI ON ITSELF. THE CUSTOMERS DISTRIBUTE SUCH COUPONS/ VOUCHERS TO THEIR EMPLOYEE S. THESE EMPLOYEES USE THE COUPONS AS PER THEIR CONVENIENCE, WHILE BUYING GOODS AND PRODUCTS FROM THE AFFILIATES OF THE ASSESSEE COMPANY AND HAND OVE R THE COUPONS TO SUCH AFFILIATES. THE AFFILIATES IN TURN, SEND BACK SUCH COUPONS COLLECTED TO THE ASSESSEE COMPANY FOR REDEMPTION AND GET PAYMENT FRO M THE ASSESSEE COMPANY. DURING THE YEAR, ASSESSEE COMPANY HAS SHOW N GROSS TURNOVER OF RS.8.58 CRORES, AND NET LOSS HAS BEEN ARRIVED AT (- ) RS.1.72 CRORES. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT, THE ASSESSEE COMPANY WAS ASKED BY THE AO IN VIEW OF THE CLAUSE NO. 12, 15 AND 16 OF GENERAL TERMS A ND CONDITIONS APPLICABLE TO THE AGREEMENT BETWEEN THE ASSESSEE COMPANY AND THE CUSTOMERS AND WHY THE FACE VALUE OF COUPONS WHICH EXPIRED PRIOR TO 31 .03.2008 SHOULD NOT BE TREATED AS INCOME IN THE ASSESSMENT YEAR 2008-09. AS PER CLAUSE NO.12 OF THE GENERAL TERMS CUSTOMER S MAY RETURN THE UNUSED VOUCHERS AND FULL BOOKLET(S) WHOSE VALIDITY EXPIRED TO ASPL FOR REVALIDATION, WITHIN ONE MONTH OF THE EXPIRY DATE O F THE UNUSED VOUCHERS. ASPL WOULD REVALIDATE THE VOUCHERS FOR A FURTHER VALIDIT Y DATES ON RECEIPT OF CHARGES OF 5% OF THE VALUE OF THE VOUCHERS TO BE REVALIDATE D OR AS AGREED BETWEEN ASPL AND CUSTOMERS. ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 5 AS PER CLAUSE NO.15 OF GENERAL TERMS IF THE CUSTOM ERS OR THE VOUCHERS HOLDER LOOSES OR DAMAGES ANY VOUCHER ASPL SHALL NOT BE LIABLE TO REPLACE SUCH VOUCHERS OR PROVIDE COMPENSATION IN ANY FORM FOR TH E LOSS THEREOF. AS PER CLAUSE NO. 16 OF THE GENERAL TERMS THE VOUC HERS SHALL BE VALID UNTIL THE 31 ST DECEMBER OF EACH CALENDAR YEAR AND SUCH VALIDITY S HALL BE INDICATED ON THE FACE EACH VOUCHERS. THE VOUCHERS S HALL BE USED STRICTLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET OUT ON THE FACE AND/ OR REVERSE OF THE VOUCHERS. 5. AFTER GOING THROUGH THE CLAUSE NO.12, 15 AND 16, THE AO HELD THAT IT IS EVIDENT THAT CLAIM OF REDEMPTION OF THE VOUCHERS CA N BE DENIED BY THE ASSESSEE COMPANY ON THREE FRONT NAMELY I) ON EXPIRY OF THE VOUCHERS, IF NOT VALIDATED WITHIN STIPULATED PERIOD II) ON LOSS OR D AMAGE OF VOUCHERS III) VOUCHERS REMAINED UNUSED. SINCE, THERE IS A TIME LI MIT TO REVALIDATE THE VOUCHERS I.E. WITHIN 30 DAYS OF THE EXPIRY; IN NO W AY VOUCHERS COULD BE PRESENTED FOR REDEMPTION AFTER THE SAID PERIOD. THE YEAR WISE DETAILS OF THE UNCLAIMED VOUCHERS PROVIDED BY THE ASSESSEE COMPANY ARE AS FOLLOWS: - VOUCHERS YEAR AMOUNT I) FACE VALUE ISSUED OF TR 2005 RS.1,27,31,758/- II) FACE VALUE ISSUED OF TR 2006 RS.2,16,66,986/- III) FACE VALUE ISSUED OF TC 2005 RS.41,75,112/- IV) FACE VALUE ISSUED OF TC 2006 RS.4,05,54,220/- V) FACE VALUE ISSUED OF TC 2007 RS.17,23,169/- TOTAL RS.8,08,51,245/- HENCE, THE ADDITION OF RS. 8,08,51,245/- WAS MADE TO THE INCOME OF THE ASSESSEE COMPANY BY THE AO VIDE ASSESSMENT ORDERS D ATED 30.12.2010 PASSED U/S 143(3) OF THE ACT. 6. AGGRIEVED BY THE ORDERS DATED 30.12.2010 PASSED BY THE AO U/S 143(3) OF THE ACT, THE ASSESSEE COMPANY FILED FIRST APPEAL BEFORE THE CIT(A) AND ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 6 SUBMITTED THAT IN RESPECT OF ADDITION OF UNCLAIMED VOUCHERS OF RS.8,08,51,245/-, THE ASSESSEE COMPANY GIVES GRACE PERIOD OF 6-12 MONTHS AFTER THE EXPIRY OF DATE TO ITS AFFILIATED AGENCIES TO SUBMIT THE EXPIRED VOUCHERS. FURTHER, THE ASSESSEE COMPANY HAS THE PO LICY OF TAKING THE EXPIRED VOUCHERS AS INCOME AFTER A PERIOD OF TWO YEARS FROM THE DATE OF EXPIRY IN CASE OF MEAL VOUCHERS AND ONE YEAR FROM THE DATE OF EXPI RY IN CASE OF COMPLIMENT VOUCHERS. THIS ACCOUNTING POLICY HAS BEEN CONSISTEN TLY FOLLOWED BY THE ASSESSEE COMPANY RIGHT FROM FIRST YEAR OF ITS BUSIN ESS. IT HAS BEEN FURTHER SUBMITTED BY THE ASSESSEE COMAPNY THAT THIS ACCOUNT ING POLICY HAS BEEN ACCEPTED BY THE REVENUE IN ALL THESE YEARS. THE ASS ESSEE COMPANY ALSO SUBMITTED BEFORE THE CIT(A) THAT THE UNEXPIRED VOUC HERS HAVE BEEN SHOWN AS INCOME IN THE SUBSEQUENT YEARS ON THE BASIS OF THIS CONSISTENT POLICY. THE ASSESSEE COMPANY HAS ALSO SUBMITTED THAT THE INCOME ON ACCOUNT OF EXPIRED VOUCHERS/ UNCLAIMED VOUCHERS ADDED BY THE A.O. HAD BEEN SHOWN IN SUBSEQUENT YEARS AS DETAILED BELOW: SR. NO. NAME OF VOUCHER ADDITION MADE REDEMPTION CREDIT NOTES TRANSFER TO INCOME REMARK 1 TR 2005 1,27,31,758 125,493 60,110 1,25,46,155 A.Y. 2009-10 2 TR 2006 2,16,66,986 19,97,680 1,750 17,45,581 61,017 1,78,60,958 A.Y. 2010-11 3 TC 2005 41,75,112 99,310 80,938 39,94,864 A.Y. 2009-10 4 TC 2007 17,23,169 15,08,322 22,92,423 20,987 918,081 A.Y. 2010-11 HOWEVER, THE UNCLAIMED VOUCHERS OF RS.4,05,54,220/- (TC-2006) HAVE NOT BEEN TRANSFERRED TO THE INCOME SINCE THE DATE O F EXPIRY WAS 30 TH DECEMBER 2008 FALLING IN ASSESSMENT YEAR 2009-10 AND ADMITTE DLY INCOME HAS ALSO BEEN SHOWN IN THE ASSESSMENT YEAR 2009-10. THE ASSE SSEE COMPANY SUBMITTED THAT METHOD OF ACCOUNTING CONSISTENTLY FO LLOWED BY THE ASSESSEE COMPANY CANNOT BE DISTURBED BY THE REVENUE UNLESS T HERE ARE REASONS FOR THE SAME THAT THE SYSTEM DOES NOT REFLECT TRUE AND CORR ECT PROFITS , RELYING ON DECISION OF HONBLE SUPREME COURT IN THE CASE OF CI T V. WOODWARD GOVERNOR INDIA PRIVATE LIMITED (2009) 21 DTR 106(SC) AND CIT V. GOPAL PUROHIT (2011) ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 7 336 ITR 287(BOM.) . THE ASSESSEE COMPANY SUBMITTED COPIES OF ASSESSMENT ORDERS PASSED U/S 143(3) OF THE ACT FOR ASSESSMENT YEAR 2005-06 TO 2007-08 AND ASSESSMENT YEAR 2009-10 AND 2010-11 WHEREIN SYS TEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE COMPANY HAS BEEN ACCEPTED BY THE AO AND PLEADED THAT SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE COMPANY CONSISTENTLY IN RESPECT OF EXPIRED/UNCLAIMED COUPONS SHOULD BE ACCE PTED AND THE ADDITIONS MADE BY THE AO MAY BE DELETED. 7. THE COPY OF WRITTEN SUBMISSIONS WAS FORWARDED BY THE CIT(A) TO THE AO FOR REMAND REPORT. THE AO SUBMITTED A REPORT SIMPLY REITERATED THE CONCLUSION OF THE AO RECORDED IN THE ASSESSMENT ORD ER AND HENCE, DISALLOWANCE MADE BY THE AO WAS JUSTIFIED. THE COPY OF REMAND REPORT WAS PROVIDED TO THE LD. A.R.S AND THEY HAVE ARGUED THE CASE WITH REFERENCE TO THE EARLIER SUBMISSION ALREADY MADE. 8. THE CIT(A) FOUND THAT THE ASSESSEE COMPANY HAS S HOWN INCOME IN SUBSEQUENT YEAR PARTICULARLY IN THE ASSESSMENT YEAR 2009-10 AND 2010-11 AS DETAILED IN THE WRITTEN SUBMISSIONS . THE AO VIDE O RDER U/S.143(3) OF THE ACT DATED 29.12.2011 AND 22.03.2013 RESPECTIVELY FOR AS SESSMENT YEAR 2009-10 & 2010-11 HAS ACCEPTED THE SAME WITHOUT ANY VARIATI ON AND IT IS AN ESTABLISHED LEGAL POSITION THAT THE INCOME CANNOT B E TAXED TWICE AND THE INCOME WHICH HAS ALREADY BEEN TAXED IN SUBSEQUENT Y EARS CANNOT BE TAXED IN THE YEAR UNDER CONSIDERATION . THE CLAIM OF THE ASS ESSEE COMPANY WAS FORWARDED TO THE AO WHO HAS NOT POINTED ANY DISCREP ANCY IN THE SAME AND THAT NO ADDITION ON ACCOUNT OF UNCLAIMED/ EXPIRED V OUCHERS NAMELY TR 2005, TR 2006, TC 2005, TC 2007 CAN BE MADE IN YEAR UNDER CONSIDERATION AND THE AO WAS DIRECTED TO DELETE THE SAME. IN RESPECT OF U NCLAIMED/ EXPIRED VOUCHERS TC 2006 WORTH RS.4,05,54,220/- THE EXPIRY DATE AS PER ASSESSEE COMPANY WAS IN DECEMBER, 2008 CONSIDERING THE EXTEN DED PERIOD OF TWO YEARS & THE INCOME SHOULD HAVE BEEN SHOWN IN THE AS SESSMENT YEAR 2009-10. ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 8 THE INCOME OF RS.4,05,54,220/- WAS NOT DISCLOSED EV EN IN THE ASSESSMENT YEAR 2009-10 AND THE ASSESSEE COMPANY HAS NOT CONSI STENTLY FOLLOWED THE ACCOUNTING POLICY IN THIS REGARD AND INCOME THEREOF HAS TO BE TAXED IN THE YEAR UNDER CONSIDERATION AND ACCORDINGLY ADDITION O F RS.4,05,54,220 AS MADE BY THE AO WAS UPHELD BY THE CIT(A). 9. AGGRIEVED BOTH THE REVENUE AND THE ASSESSEE COMP ANY ARE IN APPEAL BEFORE THE TRIBUNAL AND CROSS APPEALS ARE FILED BEF ORE THE TRIBUNAL. THE LEARNED COUNSEL OF THE ASSESSEE COMPANY SUBMITTED T HAT ASSESSEE COMPANY IS IN BUSINESS OF PREPAID VOUCHERS/ COUPONS I.E. FOOD COUPONS AND COMPLIMENTARY GIFT COUPONS . THE ASSESSEE COMPANY G ETS FACE VALUE OF THE COUPONS/ VOUCHERS AT THE INITIAL STAGE OF TRANSACTI ON RECEIVED FROM THE COMPANIES WHO GIVE THESE COUPONS TO THEIR EMPLOYEES . THE EMPLOYEES OF THE CLIENT GET THESE COUPONS REDEEMED FROM ESTABLISHMEN TS/RESTAURANTS/HOTELS ETC WHO SURRENDER THESE VOUCHERS TO THE ASSESSEE CO MPANY TO GET THE PAYMENT FROM ASSESSEE COMPANY. THE ASSESSEE COMPANY SUBMITTED THAT THE ASSESSEE COMPANY RECOGNIZES REVENUE FOR UNUTILIZED COUPONS AFTER TWO YEAR AFTER EXPIRY OF MEAL COUPONS AND ONE YEAR IN CASE O F COMPLIMENT VOUCHERS WHEN IT IS REASONABLY CERTAIN THAT PAYMENT OF LIABI LITY WILL NOT ARISE IN FUTURE AND WHEREBY IN THE INTERIM PERIOD, IT WAIT FOR THE CLAIMS ,IF ANY ARISING FROM THESE COUPONS WHICH MAY ARISE DUE TO SEVERAL FACTOR S. THIS POLICY IS CONSISTENTLY FOLLOWED BY THE ASSESSEE COMPANY WHICH IS ACCEPTED BY THE REVENUE. THE LD. COUNSEL DREW OUR ATTENTION TO THE ACCOUNTING POLICY OF THE ASSESSEE COMPANY CONSISTENTLY FOLLOWED BY THE ASSES SEE COMPANY WHICH IS PLACED AT PAGE 20-21 AND 50 OF PAPER BOOK FILED BY THE ASSESSEE COMPANY WITH THE TRIBUNAL. THE ASSESSEE COMPANY ALSO DREW O UR ATTENTION TO THE PAGE 55-57 TO SUBMIT THAT INCOME ARISING FROM THESE EXPI RED COUPONS AS HAS BEEN ADDED BY THE AO HAVE BEEN DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS AND OFFERED FOR TAXATION IN THE RETURN OF INCOME FILED WITH THE REVENUE FOR ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 9 ASSESSMENT YEAR 2009-10 TO 2010-11 . THE LD. COUNSE L SUBMITTED THE DETAILS OF OFFERING FOR TAX VIDE PAGE 55 -57 OF THE PAPER B OOK AS UNDER: SR. NO. NAME OF VOUCHER ADDITION MADE REDEMPTION CREDIT NOTES TRANSFER TO INCOME REMARK 1 TR 2005 1,27,31,758 125,493 60,110 1,25,46,155 A.Y. 2009-10 2 TR 2006 2,16,66,986 19,97,680 1,750 17,45,581 61,017 1,78,60,958 A.Y. 2010-11 3 TC 2005 41,75,112 99,310 80,938 39,94,864 A.Y. 2009-10 4 TC 2007 17,23,169 15,08,322 22,92,423 20,987 918,081 A.Y. 2010-11 5. TC 2007 4,05,54,220 3,32,26,240 1,98,300 1,46,534 293470 66,89,676 A.Y.2010-11 THE LD. AR SUBMITTED THAT THIS POLICY IS REGULARLY FOLLOWED BY THE ASSESSEE COMPANY WHICH HAS BEEN ACCEPTED BY THE REVENUE AND ORDERS OF THE ASSESSMENT YEAR 2006-,2009-10 , 2010-11 AND 2011-12 PASSED U/S 143(3) OF THE ACT WERE PLACED IN THE FILE AND NO ADDITIONS HA VE BEEN MADE BY THE REVENUE ON THESE COUNTS AND HENCE IN NUTSHELL IT WA S SUBMITTED BY THE ASSESSEE COMPANY THAT ENTIRE INCOME EMBEDDED IN THE EXPIRED COUPONS/VOUCHERS AS AT 31-03-2008 HAVE BEEN OFFERED AND SUBJECTED TO TAX BY THE REVENUE ALBEIT IN THE ASSESSMENT YEARS 2009- 10 AND 2010-11 AS PER CHART ABOVE AND AUDITED PROFIT AND LOSS ACCOUNT. TH E LD. COUNSEL ALSO DREW OUR ATTENTION TO AUDITED PROFIT AND LOSS ACCOUNT FO R THE FINANCIAL YEAR ENDED 31-03-2009 AND 31-03-2010 TO SHOW THAT ENTIRE INCOM E ON ACCOUNT OF THE MEAL COUPONS AND COMPLIMENTARY GIFT COUPONS WHICH E XPIRED PRIOR TO 31-03- 2008 HAS BEEN OFFERED FOR TAXATION AND DUE TAXES PA ID TO REVENUE ALBEIT IN THE ASSESSMENT YEAR 2009-10 AND 2010-11. THUS, IT W AS SUBMITTED BY THE ASSESSEE COMPANY THAT ENTIRE INCOME OF THESE VOUCHE RS BOTH MEAL COUPONS AND COMPLIMENTARY GIFT COUPONS HAS BEEN SUBJECTED T O TAXATION ALBEIT IN THE SUBSEQUENT ASSESSMENT YEARS 2009-10 AND 2010-11 AN D THIS METHOD OF ACCOUNTING IS CONSISTENTLY FOLLOWED BY THE ASSESSEE COMPANY WHICH HAS BEEN ACCEPTED BY THE REVENUE IN PAST AND BASED ON THE PR INCIPLES OF CONSISTENCY THE SAME IS TO BE ACCEPTED BY THE REVENUE. THE LD C OUNSEL FOR THE ASSESSEE ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 10 COMPANY SUBMITTED THAT SAME INCOME CANNOT BE SUBJEC TED TO TAX TWICE AS IS DONE BY THE REVENUE IN THE IMPUGNED ASSESSMENT YEAR WHICH IS NOT PERMISSIBLE UNDER THE ACT , WHILE IN ALL OTHER YEAR S NO SUCH ADDITION HAS BEEN MADE. 10. THE LEARNED DR ON THE OTHER HAND SUBMITTED THAT AS PER AGREEMENT ENTERED INTO BY THE ASSESSEE COMPANY VIDE CLAUSE 12 ,15 AND 16 , THE TIME LIMIT OF SUBMISSION OF UNUTILSED VOUCHERS IS 30 DAY S FROM THE DATE OF EXPIRY AND AFTER VOUCHERS/COUPONS EXPIRES , RECEIPT IS TO BE RECOGNIZED AS INCOME AND INCOME HAS TO BE ASSESSED TO TAX AND THERE IS N O REQUIREMENT OF WAITING OF 2 YEARS FOR OFFERING THE INCOME TO TAXATION AS W AS FOLLOWED BY THE ASSESSEE COMPANY.FURTHER, IT WAS SUBMITTED BY THE DR THAT CL AIM OF THE ASSESSEE COMPANY THAT ENTIRE INCOME HAS BEEN SUBJECTED TO TA XATION ALBEIT IN THE ASSESSMENT YEAR 2009-10 AND 2010-11 NEEDS VERIFICAT ION BY THE AUTHORITIES. 11. THE LD. AR SUBMITTED IN REJOINDER THAT THE ASSE SSEE COMPANY HAS HUGE CARRIED FORWARD UN-ABSORBED LOSSES AND THE ASSESSEE COMPANY WILL NOT GET ANY ADVANTAGE BY POSTPONING THE INCOME TO SUBSEQUEN T ASSESSMENT YEARS RATHER BY POSTPONING THE INCOME , THE ASSESSEE COMP ANY WILL BE AT LOSS. THERE IS NO AVOIDANCE OF TAX BY POSTPONING INCOME AS PER POLICY ADOPTED BY THE ASSESSEE COMPANY RATHER IT IS BASED ON SOUND AND SC IENTIFIC PRINCIPLES AS THE COMPANY WAIT FOR THE CLAIMS TO BE MADE AGAINST THES E EXPIRED VOUCHERS BEFORE OFFERING THE SAME FOR TAXATION WHEN IT IS REASONABL Y CERTAIN THAT NO FURTHER CLAIM WILL BE RECEIVED BY THE ASSESSEE COMPANY. 12. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PE RUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE COMPANY IS DEALING IN PREPAID MEAL AND COMPLIMENTARY COUPONS WHICH ARE ISSUED TO CORPORATE CLIENTS. THESE COUPONS/VOUCHERS ARE ISSUED ON CALENDAR YEAR BASIS AND THE ASSESSEE COMPANY GETS UPFRONT PAYMENT OF THESE VOUCHERS/COUP ONS FROM ITS CORPORATE ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 11 CLIENTS INCLUDING ITS SERVICE CHARGES. THE CLIENTS GIVE THESE COUPONS/VOUCHERS TO ITS EMPLOYEE WHO UTILIZE THE SAME AT ESTABLISHME NTS/RESTAURANT/HOTELS . THE SAID ESTABLISHMENT CLAIM PAYMENT FROM THE ASSES SEE COMPANY AGAINST THE UTILIZED COUPONS/VOUCHERS. AFTER THE EXPIRY OF COUPONS/VOUCHERS, THE UNUTILIZED COUPONS ARE SURRENDERED BY THE CLIENTS T O THE ASSESSEE COMPANY TO CLAIM BACK THE AMOUNT OR FOR REVALIDATION FOR WHICH PERIOD OF THIRTY DAYS ARE ALLOWED BY THE ASSESSEE COMPANY. THE ASSESSEE COMPA NY WAITS FOR THE CLAIMS AGAINST BOTH UTILIZED /UNUTILIZED VOUCHERS/COUPONS TILL WHEN IT IS CERTAIN THAT PAYMENT OF LIABILITY WILL NOT ARISE IN FUTURE BEFOR E OFFERING THE SAME FOR TAXATION IN RESPECT OF UNCLAIMED AMOUNT WITH RESPEC T TO THESE VOUCHERS/COUPONS WHICH IN CASE OF MEAL COUPONS IS A PERIOD OF 2 YEARS FROM THE DATE OF EXPIRY OF MEAL COUPONS WHILE IT IS 1 YE AR FROM THE DATE OF EXPIRY OF GIFT/COMPLIMENTARY COUPONS/VOUCHERS WHICH POLICY IS CONSISTENTLY FOLLOWED BY THE ASSESSEE COMPANY OVER THE YEARS AND THE SAME IS ACCEPTED BY THE REVENUE IN ALL THESE YEARS EXCEPT THE IMPUGNED ASSE SSMENT YEAR. THE REVENUE HAS ALSO ACCEPTED THE SAID METHOD OF ACCOUN TING EVEN IN THE ASSESSMENTS FRAMED U/S 143(3) OF THE ACT AND HENCE NOW , THE REVENUE CANNOT BE ALLOWED TO DISTURB THE METHOD OF ACCOUNTI NG CONSISTENTLY FOLLOWED BY THE ASSESSEE COMPANY AND ACCEPTED BY THE REVENUE EVEN IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT UNLESS REVE NUE BRING ON RECORD COGENT EVIDENCES THAT METHOD OF ACCOUNTING CONSISTE NTLY FOLLOWED BY THE ASSESSEE COMPANY IS DEFECTIVE LEADING TO DISTORTION OF INCOME AND CORRECT INCOME AS PER THE ACT CANNOT BE COMPUTED BY FOLLOWI NG THE METHOD OF ACCOUNTING CONSISTENTLY FOLLOWED BY THE ASSESSEE CO MPANY OR THE SAME POLICY IS NOT REGULARLY FOLLOWED BY THE ASSESSEE COMPANY K EEPING ALSO IN VIEW THE WELL ESTABLISHED PRINCIPLES OF TAXATION THAT THE SA ME INCOME CANNOT BE SUBJECTED TO TAX TWICE . HOWEVER , KEEPING IN VIEW THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE INTEREST OF JUSTICE WILL BE BEST SERVED IF THE MATTER IS RESTORED BACK TO THE AO WITH A DIRECTION TO MAKE LIMITED VERIFICATION TO PROTECT THE INTEREST OF REVENUE THAT ALL THE INC OME EMBEDDED IN THE EXPIRED ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 12 COUPONS/VOUCHERS AS PER THE ADDITIONS MADE BY THE A O IN THE IMPUGNED ASSESSMENT YEAR HAVE BEEN OFFERED FOR TAXATION BY THE ASSESSEE COMPANY WITH RESPECT TO ALL THESE EXPIRED VOUCHERS/COUPONS BOTH MEAL AND COMPLIMENTARY GIFT VOUCHERS, ALBEIT IN THE SUBSEQUENT ASSESSMEN T YEARS I.E. 2009-10 AND 2010-11 AS PER ACCOUNTING POLICY CONSISTENTLY FOLLO WED BY THE ASSESSEE COMPANY. THE SAID ASSESSMENTS FOR THE ASSESSMENT YE AR 2009-10 AND 2010- 11 WERE ALSO FRAMED BY THE REVENUE UNDER SCRUTINY U /S 143(3) OF THE ACT . THE ASSESSEE COMPANY IS DIRECTED TO APPEAR BEFORE T HE AO AND TO SUBMIT EVIDENCES IN SUPPORT OF ITS CONTENTION BEFORE THE A O FOR VERIFICATION THAT WITH RESPECT TO ALL THE EXPIRED VOUCHERS/COUPONS AS AT 3 1-03-2008 AS PER THE ASSESSMENT ORDER DATED 30.12.2010 AGAINST WHICH THE ADDITIONS HAVE BEEN MADE BY THE AO HAD BEEN OFFERED FOR TAXATION TO REV ENUE ALBEIT IN THE SUBSEQUENT ASSESSMENT YEAR 2009-10 AND 2010-11 AS P ER ACCOUNTING POLICY AND METHOD OF ACCOUNTING CONSISTENTLY FOLLOWED BY T HE ASSESSEE COMPANY. THE AO SHALL PROVIDE PROPER AND ADEQUATE OPPORTUNIT Y TO THE ASSESSEE COMPANY IN ACCORDANCE WITH PRINCIPLES OF NATURAL JU STICE AND IN ACCORDANCE WITH LAW BEFORE COMPLETING VERIFICATION AS DIRECTED IN THIS ORDER. WE ORDER ACCORDINGLY. 13. IN THE RESULT BOTH THE APPEALS FILED BY THE ASS ESSEE COMPANY AND REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY 2016. # $% &' 24- 02-2016 ( ) SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMB ER $ MUMBAI ; & DATED 24-02-2016 [ .+../ NEELAM NEELAM NEELAM NEELAM PS ITA 2952/MUM/2014 & ITA 3966/MUM/2014 ASSESSMENT YEAR 2008-09 EDENRED (INDIA) PVT. LTD. 13 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. , / CIT- CONCERNED, MUMBAI 5. /0( ++12 , 12 , $ / DR, ITAT, MUMBAI H BENCH 6. (45 6 / GUARD FILE. / BY ORDER, / + //TRUE COPY// / ( DY./ASSTT. REGISTRAR) $%, $ / ITAT, MUMBAI