M/s. Skipper Overseas Pvt. Ltd, New Delhi V. ITO, New Delhi

ITA 4392/DEL/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65561 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 11-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 17-11-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRABHA KANT
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

ITA NO. 4392/DEL/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4392/DEL/2009 A.Y. : 2006-07 M/S SKIPPER OVERSEAS PVT. LTD., 4284, STREET NO. 3, ANSARI ROAD, DARYAGANJ, NEW DELHI 110 002 (PAN/GIR NO. : AAACS2469N) VS. ITO, WARD - 8(4), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. SALIL AGGARWAL, SH. A.K. MAKHIJA, SH. R.P. MALL, ADVOCATES & SH. SHAILESH GUPTA, CA DEPARTMENT BY : SH. PRABHA KANT, S R. 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 ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XI, NEW DEL HI DATED 27.10.2009 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED READ AS UNDER:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACT S IN SUSTAINING AN ORDER OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT AT AN INCOME OF RS.23,59,560/- AS AGAINST RETURNED INCOME OF RS. 4, 74, 406/-. ITA NO. 4392/DEL/2009 2 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FURTHER ERRED IN LAW AND ON FACTS IN SUSTAINING AN ADDITION OF RS. 5,05, 835/- ON ACCOUN T OF DIFFERENCE IN TDS CERTIFICATES AND THE AMOUNT CREDIT ED IN P&L ACCOUNT. 2.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IGNORED THE BASIC FACT THAT THE APPELLANT WAS MAINTAINING ITS BOOKS OF ACCOUNTS ON THE BASIS OF MERCANTILE SYSTEM OF ACCOUNTING AND HAD OFFERED THE SAID INCOME TO TAX IN THE PREVIOUS FINANCIAL YEAR, HOWEVER, TDS WAS DEDUCTED BY THE PAYER IN THE IMPUGNED FINANCIAL YEAR. THUS, THE SUSTAINING OF SAI D ADDITION AMOUNTED TO DOUBLE ADDITION OF SAME INCOME TWICE IN TWO SEPARATE FINANCIAL YEARS, WHICH IS CON TRARY TO LAW AND AS SUCH IS LIABLE TO BE DELETED. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FURTHER ERRED IN LAW AND ON FACTS IN SUSTAINING AN ADDITION OF RS. 13,64,000/- ON ACCOUN T OF RENT BEING CLAIMED IN P&L ACCOUNT. 3.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IGNORED THE BASIC FACT THAT THE APPELLANT COMPANY HAD CORRECTLY DEDUCTED TDS ON PAYMENTS OF RENTS AS ENVISAGED UNDER SECTION 194 I OF THE ACT A ND ALL THE PROOFS REGARDING DEPOSIT OF TDS WAS FILED BEFORE HIM AS ADDITIONAL EVIDENCES, WHICH WERE DULY ACCEPTED BY THE LEARNED CIT (A) AFTER CALLING THE REMAND REPORT FROM THE LEARNED ASSESSING OFFICER. ITA NO. 4392/DEL/2009 3 THUS, THE ADDITION SO SUSTAINED WAS CONTRARY TO MATERIAL AVAILABLE ON RECORD. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN CONCLUDING THAT THE APPELLANT HAD TAKEN A DIFFERENT STAND IN THE REMAND PROCEEDINGS AND ASSESSMENT PROCEEDINGS. IN DOING SO , THE LEARNED CIT (A) IGNORED THE FACT THAT ALL THE MATERIALS WERE PLACED ON RECORD BY THE APPELLANT COMPANY, THAT TOO SUBSTANTIATED BY DOCUMENTARY EVIDENCES. THUS, THE FINDING OF THE LEARNED CIT (A) THAT THE APPELLANT COMPANY HAS TAKEN DIFFERENT STANDS AT DIFFERENT STAGES IS CONTRARY TO RECORD AND BASED ON SUSPICION, SURMISES AND CONJECTURES. 3.3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN NOT APPRECIATING THE ADDITIONAL EVIDENCES FILED BEFORE HIM, WHICH CLEARL Y BROUGHT CORRECT FACTS ON RECORD AND THUS, AS A FACT FINDING AUTHORITY THE LEARNED CIT (A) SHOULD HAVE CONSIDERED AND HAVE DELETED THE SAID ADDITION. 3. APROPOS ISSUE OF ADDITION OF ` 5,05,835/-. THE ASSESSEE COMPANY CARRIES ON THE BUSINESS OF CA RRYING AND FORWARDING IN THE ENTIRE STATE IN JAMMU AND KASHMIR. THE COMPANY IS C&F AGENT FOR PEPSICO HOLDINGS PVT. LTD., PARLE PRODUC TS LTD., PARLE BISCUITS PVT. LTD. AND JOYCO INDIA PVT. LTD. DURIN G THE COURSE OF ASSESSMENT, ASSESSING OFFICER OBSERVED THAT ON PER USAL OF THE P&L ACCOUNT, IT REVEALS THAT ASSESSEE HAS DECLARED THE TOTAL TURNOVER FROM C&F AT ` 1,79,69,416/- WHEREAS THE TOTAL TURNOVER A S PER TDS ITA NO. 4392/DEL/2009 4 CERTIFICATES FURNISHED CAME TO ` 1,84,75,251/-. TH US, THERE WAS A DIFFERENCE OF ` 5,05,835/-. THE DIFFERENCE WAS E XPLAINED BY THE ASSESSEE AS UNDER:- AS EXPLAINED THE REASON FOR DIFFERENCE IN THE ABO VE SAID FIGURES DURING OUR LAST MEETING. THE ASSESS EE BOOKS INCOME AS DUE TO IT AS PER UNDERSTANDING ENTERED BETWEEN THE CLIENTS AND ASSESSEE DURING TH E PERIOD WHEN IT BECOMES DUE. HOWEVER, THE CLIENT S KEEP CERTAIN AMOUNTS PENDING FOR PAYMENTS AND MAKE THE PAYMENTS AFTER NECESSARY CLARIFICATIONS AND APPROVAL OF ITS CONCERNED OFFICIALS. THIS RESULTS INTO ABOVE SAID DIFFERENCE. HOWEVER, ASSESSING OFFICER WAS NOT CONVINCED WI TH THE ABOVE EXPLANATION. HE HELD THAT SINCE THE ASSESSEE IS MAI NTAINING ITS BOOKS OF ACCOUNTS ON MERCANTILE BASIS AND THE COPIES OF T DS CERTIFICATES ARE WITH THE ASSESSEE COMPANY, THERE APPEARS NO REASONS FOR NOT ACCOUNTING FOR THE TOTAL RECEIPTS IN THE PROFIT AND LOSS ACCOUNT. ACCORDINGLY, ASSESSING OFFICER MADE THE ADDITION O F ` 5,05,835/-. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) CONSIDERED THE ISSUE. HE ALSO OBTAINED THE REMAND R EPORT FROM THE ASSESSING OFFICER. LD. COMMISSIONER OF INCOME TAX (A) HAS FURTHER MENTIONED THAT ADDITIONAL EVIDENCES WERE FURNISHED A ND WERE SENT TO THE ASSESSING OFFICER. THE ASSESSING OFFICER OBJEC TED THE ADMISSION OF THE ADDITIONAL EVIDENCES. LD. COMMISSIONER OF INC OME TAX (A) DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND HE HE LD THAT HE WAS OF THE OPINION THAT ASSESSING OFFICER HAS RIGHTLY BRO UGHT ON RECORD THAT ITA NO. 4392/DEL/2009 5 THE TOTAL TURNOVER AS PER THE TDS CERTIFICATE WAS MU CH MORE THAN THE TOTAL TURNOVER DISCLOSED BY THE ASSESSEE. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT ASSESSEE HAS EXPLAINED THAT THE DIFFERENC E BETWEEN THE INCOME SHOWN BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT AND AS PER THE TDS CERTIFICATE HAS ARISEN DUE TO THE FACT THAT THE INCOME AS ACCRUED IN THE FINANCIAL YEAR 2004-05 RELATING TO A SSESSMENT YEAR 2005-06 WAS BOOKED BY THE ASSESSEE IN THE ASSESSMEN T YEAR 2005-06. DIFFERENT PARTIES TO WHOM ASSESSEE COMPANY IS C&F AG ENT, BOOKED THE SAME ONLY IN F.Y. 2005-06 RELATING TO A.Y. 2006-07. IN THIS REGARD, ASSESSEE SUBMITTED THAT ALONGWITH THE COPIES OF TDS CERTIFICATES, ASSESSEE ALSO ENCLOSED COPY OF LEDGER ACCOUNT OF TH E PEPSICO HOLDING LTD. 6. WE FIND THAT ASSESSEES CLAIM IN THIS REGARD IS T HAT ASSESSEE IS MAINTAINING THE BOOKS ON MERCANTILE SYSTEM OF ACCOUN TING AND ASSESSEES ACCOUNTS SHOWED RECEIVABLE WHEN THEY A RE ACCRUED. HOWEVER, THE PARTIES WHO HAD TO ISSUE THE TDS CERT IFICATES MAKE THE PAYMENT AFTER SOME TIME, THE SAME BECOMES DUE, AND THIS LEADS TO DIFFERENCE BETWEEN THE AMOUNT CREDITED IN THE PROFI T AND LOSS ACCOUNT, AS PER TDS CERTIFICATE. IN THIS REGARD, WE FIND THA T LD. COUNSEL OF THE ASSESSEE HAS POINTED OUT THAT PROPER EXPLANATION I N THIS REGARD WERE GIVEN TO THE ASSESSING OFFICER AND LD. COMMISSIONER OF INCOME TAX (A). FURTHER, LD. COUNSEL OF THE ASSESSEE REFERRE D TO PAPER BOOK PAGE NO. 13, WHEREIN ASSESSEE HAS DULY GIVEN THE RECONCI LIATION OF YEAR-WISE INCOME DECLARED BY THE ASSESSEE FOR ASSESSMENT YEAR 2005-06, 2006- 07 AND 2007-08. HOWEVER, WE FIND THAT THERE IS N O REFERENCE TO THE ITA NO. 4392/DEL/2009 6 RECONCILIATION STATEMENT SUBMITTED BY THE ASSESSEE IN ORDER OF AUTHORITIES BELOW. 7. IN OUR CONSIDERED OPINION, LOWER AUTHORITIES WE RE NOT JUSTIFIED IN MAKING THIS ADDITION. ASSESSEE HAS DULY EXPLAINED THAT ASSESSEE COMPANY HAD BOOKED THE INCOME IN THE FINANCIAL YEAR 2004-05 RELATING TO ASSESSMENT YEAR 2005-06, BUT THE PARTY OF WHOM TH E ASSESSEE COMPANY IS C&F AGENT BOOKED THE SAME ONLY IN FINANCI AL YEAR 2005-06 RELATING TO ASSESSMENT YEAR 2006-07. THE MATTER WAS E XPLAINED BEFORE THE ASSESSING OFFICER AND LD. COMMISSIONER OF INCOME TAX (A) AND ASSESSEES RECONCILIATION WAS ALSO GIVEN. UNDER TH E CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THERE IS NO JUSTIFICATION F OR MAKING THIS DISALLOWANCE. HENCE, WE SET ASIDE THE ORDERS OF TH E AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 8. APROPOS ISSUE OF ADDITION OF ` 13,64,000/- ON AC COUNT OF RENT CLAIMED IN P&L ACCOUNT. ON THIS ISSUE ASSESSEE CLAIMED RENT OF ` 13,64,000/ - PAID TO DIFFERENT PARTIES FOR HIRING THE GODOWNS IN DIFFER ENT PARTS OF JAMMU & KASHMIR. THE DETAILS OF THE RENT PAID WERE AS UNDE R:- A) MRS. CHARANJEET KAUR ` 3,47,000/- B) MRS. NEEKASHI BAMA ` 1,74,000/- C) SH. ASHOK BAMA ` 1,08,000/- D) SH. JOGINDER SINGH ` 2,52,000/- E) SH. ARUN KUMAR ` 1,02,000/- F) MRS. KAVITA SHARMA ` 96,000/- ITA NO. 4392/DEL/2009 7 G) SH. V.D. SHARMA ` 1,08,000/- H) SH. TARA CHAND ` 70,000/- I) SH. RAJ KUMAR ` 70,000/- J) MISC. RENTALS ` 37,000/- ASSESSING OFFICER DISALLOWED THE ENTIRE RENT AS A BOVE ON VARIOUS GROUNDS INCLUDING THAT PROPER TDS CERTIFICATES WERE NOT SUBMITTED AND THE PAYMENTS WERE HIT BY THE RIGORS OF SECTION 40A (IA). IN SOME OF THE PAYMENTS ASSESSING OFFICER CONTENDED THAT NO P ROOF OF RENT WAS SUBMITTED BY THE ASSESSEE COMPANY. ASSESSING OFFI CER OPINED THAT THE PAYMENT OF RENT BY THE ASSESSEE WAS BOGUS AND DI SALLOWED THE ENTIRE AMOUNT. 9. BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) ASS ESSEE SUBMITTED THAT THERE ARE 14 DIFFERENT PROPERTIES. IT WAS FURTHER SUBMITTED THAT AMONG 14 PROPERTIES THERE WERE CERTAI N PROPERTIES WHERE RENT PAYMENT WAS LESS THAN ` 1,20,000/- AND AS PER SECTION 194I NO TDS IS TO BE DEDUCTED FOR THE RELEVANT PERIO D OF TIME. 10. AS REGARDS THE ASSESSING OFFICERS CLAIM THAT FOR RENT PAYMENT, NO PROOF WAS GIVEN BY THE ASSESSEE, ASSESSEE CO NTENDED BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) THAT THE SAME WAS N OT ASKED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSM ENT AND THE SAME WERE DULY AVAILABLE. HOWEVER, LD. COMMISSIONER OF INCOME TAX (A) WAS NOT CONVINCED. HE OBSERVED THAT IN THIS CASE AS SESSEE FAILED TO FILE THE PROOF OF EVIDENCE BEFORE THE ASSESSING OFFICER AT THE STAGE OF ASSESSMENT. FURTHER, HE HELD THAT ASSESSEE FILED MAN UFACTURED /WRONG DOCUMENTS BEFORE THE ASSESSING OFFICER. WHEN THE MA TTER WAS REMANDED TO THE ASSESSING OFFICER, THERE ALSO, ANOTH ER SET OF ITA NO. 4392/DEL/2009 8 DOCUMENTS WERE FILED. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT A NEW GROUP OF PERSONS WERE NOW SHOW N TO HAVE RECEIVED THE RENT MUCH DEVIATION TO DETAILS FILED BE FORE THE ASSESSING OFFICER. HE OBSERVED THAT IN THE NEW GROUP OF CAS ES AGAIN THE RELEVANT DETAILS ALTHOUGH ASKED FOR, WAS NOT FILED BEFORE THE ASSESSING OFFICER TO HIS SATISFACTION. LD. COMMISSIONER OF INCOME TAX (A) HELD THAT IT WAS NOT CLEAR WHAT FURTHER OPPORTUNITY THE ASSESSEE WANTS FROM THE DEPARTMENT TO FILE THE TRUE AND CORRECT DETAILS. ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX (A) CONFIRMED THE ADDITIO N MADE BY THE ASSESSING OFFICER. 11. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE RECORDS. WE FIND THAT ASSESSEES SUBMISSIONS BEFORE THE ASSES SING OFFICER AND LD. COMMISSIONER OF INCOME TAX (A) HAS NOT BEEN PROPE RLY APPRECIATED. ASSESSEE HAS GIVEN CERTAIN DOCUMENTS AS ADDITIONAL EVIDENCES WHICH WERE NOT ENTERTAINED BY THE AUTHO RITIES BELOW. ASSESSEE HAS CONTENDED THAT IN CERTAIN CASES, RENT PAYMENT WERE LESS THAN ` 1,20,000/-, HENCE, NO TDS WAS REQUIRED TO BE DEDUCTED. FURTHER IN SOME CASES, WHERE DISALLOWANCE WAS MADE ON ACCOUNT OF NO PROOF OF PAYMENT OF RENT, ASSESSEES CLAIM IS THAT THE ASSESSING OFFICER NEVER ASKED FOR THE PROOF OF PAYMENT AT THE ASSESSM ENT STAGE. IN OUR CONSIDERED OPINION, UNDER THE FACTS AND CIRCUMSTANC ES OF THE CASE, INTEREST OF JUSTICE WILL BE SERVED, IF THE MATTER IS REMITTED TO THE FILE OF ITA NO. 4392/DEL/2009 9 THE ASSESSING OFFICER. ASSESSING OFFICER IS DIRE CTED TO GO THROUGH THE SUBMISSIONS AND EVIDENCES BEING FILED BY THE ASSESS EE AND ACCORDINGLY, ADJUDICATE THE ISSUE. WE HOLD AND DIR ECT ACCORDINGLY. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28/9/2012. SD/- SD/- [ [[ [I.C. SUDHIR] I.C. SUDHIR] I.C. SUDHIR] I.C. SUDHIR] [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 28/9/2012 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