ACIT, New Delhi V. SSIPL Retail (P) Ltd, New Delhi

ITA 4171/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5606 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-03-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 23-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHUMANA SEN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI C.L.SETHI, JM AND SHRI R.C.SHARMA, AM ITA NO.4171/DEL/2009 ASSESSMENT YEAR : 2000-01 ASSTT.COMMISSIONER OF INCOME TAX, CIRCLE-9(1), NEW DELHI. VS. M/S SIERRA INDUSTRIAL ENTERPRISES (P) LTD., (NOW KNOWN AS SSIPL RETAIL (P) LTD.), B-1/F-4, MOHAN COOPERATIVE INDUSTRIAL ESTATE, MAIN MATHURA ROAD, NEW DELHI. PAN NO.AAACS3919D. (APPELLANT) (RESPONDENT) APPELLANT BY : MRS.SHUMANA SEN, SR.DR. RESPONDENT BY : SHRI SUMANT CHADHA, CA. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 21.5.2009 FOR THE AY 2001-02. 2. THE ONLY GRIEVANCE OF THE REVENUE RELATES TO CIT (A)S ACTION IN REDUCING THE DISALLOWANCE ON ACCOUNT OF CUSTOMER CLAIM AND D EFECTIVES FROM 50% TO 5%. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN THE TRADING OF SPORTS F OOTWEAR, APPARELS AND ACCESSORIES. A CLAIM WAS MADE ON ACCOUNT OF DEFECTIVE/DAMAGED GO ODS UNDER THE HEAD CUSTOMER CLAIM AND DEFECTIVES. CONTENTION OF THE ASSESSEE BEFORE THE AO WAS THAT DEFECTIVE GOODS WERE SHREDDED OUTSIDE DELHI. NOT BEING SATISFIED WITH THE ASSESSEES CONTENTION, AO DISALLOWED THE ASSESSEES CLAIM. BY THE IMPUGNED ORDER, CIT(A) ALLOWED ASSESSEES CLAIM BY RECORDING A FINDING THAT ASSESSEE HAS FURNISHED COMPLETE DETAILS OF DEFECTIVE GOODS RETUR NED, AS A PERCENTAGE OF ITS SALE, ITA-4171/DEL/2009 2 INVOICES CONTAINING EACH OUTLETS CLAIM, COMPLETE PH OTO COPY AND DOCUMENTS OF CUSTOMERS CLAIMS AND THEIR TREATMENT IN THE BOOKS O F ACCOUNTS, COPY OF DISTRIBUTION/FRANCHISEE AGREEMENT AND NAMES AND AD DRESSES OF CUSTOMER CLAIM, SETTLEMENTS SLIP AND CREDIT NOTES. THE CIT(A) HAD VERIFIED THE SAME AND OBSERVED THAT THE ASSESSEE IS SELLING PRODUCT BY THE BRAND N AME OF NIKE. THEY ARE EXTREMELY QUALITY CONSCIOUS AND RESPONSE TO CUSTOME RS SERVICE/COMPLAINT IS ENSURED. THE NATURE OF PRODUCT BEING FOOTWEAR AND APPAREL MINOR DEFECTS/SOME DEFECTS MAY EMERGE ON USE OF THE PRODUCTS. CONSIDE RING THAT THE ASSESSEE HAS A SALE OF APPROXIMATELY 33 CRORE UNDER REFERENCE THE GOODS DEBITED UNDER THIS HEAD OF CUSTOMER CLAIM AND DEFECTIVES APPEAR TO BE MIN IMALSTIC, HOWEVER, SINCE ITEM WISE TELLING OF RETURNED PRODUCT IS NOT POSSIBLE, T HE DISALLOWANCE MADE BY THE AO AT 50 PER CENT IS REDUCED AND RESTRICTED TO 5 PER C ENT. 4. THE FINDING RECORDED BY THE CIT(A) HAS NOT BEEN CONTROVERTED BY THE LEARNED DR. WE ALSO FOUND THAT NO MATERIAL WAS BRO UGHT ON RECORD BY THE AO TO SUGGEST THAT ANY SALE PRICE WAS BEING FETCHED BY SU CH DEFECTIVE GOODS RETURNED BY THE CUSTOMERS. SINCE THE ASSESSEE WAS SELLING THE PRODUCT BY THE BRAND NAME NIKE, THEY ARE EXTREMELY QUALITY CONSCIOUS AND EVER Y COMPLAINT OF THE CUSTOMER IS BEING MET WITH. KEEPING IN VIEW THE NATURE OF T HE PRODUCT BEING FOOTWEAR AND APPARELS, SOME DEFECTS ARE INEVITABLE AND THE ASSES SEES CLAIM FOR SUCH DEFECTIVE GOODS IS VERY NEGLIGIBLE LOOKING TO ITS TOTAL TURNO VER. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) FOR RESTRICTIN G THE DISALLOWANCE TO THE EXTENT OF 5% IN PLACE OF 50% MADE BY THE AO. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH, 2010. SD/- SD/- (C.L.SETHI) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18.03.2010. VK. ITA-4171/DEL/2009 3 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR