ACIT, Bangalore V. Shri. Robin Uthappa Aiyuda, Bangalore

ITA 460/BANG/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9470 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 03-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: N NAGARAJU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.460(BANG) 2014 (ASSESSMENT YEAR : 2010-11) THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-8(1), BANGALORE APPELLANT VS SHRI ROBIN UTHAPPA AIYUDA, NO.1403, ANIRYA PALATUAL NO.8, 2 ND MAIN, LOTTEGALLHALLI, RMV II STAGE, BANGALORE -560 094 PAN NO.AIHPA 6951C RESPONDENT REVENUE BY : DR. P.K.SRIHARI, ADDL.CIT ASSESSEE BY : SHRI N. NAGARAJU, ADVOCATE DATE OF HEARING : 14-07-2016 DATE OF PRONOUNCEMENT : 12-08-2016 O R D E R PER SHRI A. K. GARODIA, AM: THIS APPEAL IS FILED BY THE REVENUE DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A)(LTU), BANGALORE DATED 16-01-2014 FOR THE ASSESSMENT YEAR 201011. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS; 1. THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE PRESE NT CASE 2. THE CIT(A) ERRED IN FINDING THAT THE INCOME OF RS.40 LAKHS WAS NOT EARNED IN THE FY: 2009-10 WHEN IT ITA NO.460(B)/14 2 IS ACCEPTED IN PARA-5 OF THE CIT(A)S OWN ORDER THAT THE BIFURCATION BY THE ASSESSEE WAS MADE ON AN ESTIMATE . 3. THE CIT(A) ERRED IN IGNORING THE FACT THAT A CR EDIT IN THE MERCANTILE SYSTEM REPRESENTS AN EARNING AN D THE ASSESSEE HIMSELF DULY ATTEMPTED TO CLAIM THE TDS CR EDIT FOR THE AMOUNT OF RS.40 LAKHS. 4. THE APPELLANT PRAYS FOR PERMISSION TO ADD OR DELETE THE GROUNDS OF APPEAL AT THE TIME OF HERRING OF THE CASE. 3. THE LD. DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER AND THE LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D. CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE DECISION OF THE LD.CIT(A) AS PER HIS ORDER FROM PAR A-5.1 TO 6 WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE. 5.1 BEFORE ME THE ABOVE TREATMENT BY THE AO HAS BE EN PROTESTED AND A COPY OF THE IPL PLAYING CONTRACT BETWEEN THE APPELLANT AND RC WAS FILED TO SUBSTANTIATE THE CLAIM THAT THE REC EIPT OF RS.1.4 CRORE WAS NOT IN TERMS OF THE SCHEDULED PAYMENT TER MS AS PER THE CONTRACT, AND HAD BEEN PAID BY RC FOR THEIR OWN ADV ANTAGE. IT WAS EXPLAINED THAT THE APPELLANT HAD PLAYED ONLY A FEW MATCHES IN MARCH 2010 FOR RC AND PAYMENT OF RS.1.4 CRORE WAS N OT COMMENSURATE WITH THE APPELLANTS EFFORTS NOR IN LI NE WITH THE AGREEMENT TERMS. THE TOTAL FEES RECEIVED FROM M/S RC FROM 01.01.2010 TO 31.12.2010 FOR THE IPL CONTRACT WAS A S FOLLOWS; RECEIVED DURING THE YEAR 2009-10 FROM INDIA 1,40, 00,000 RECEIVED DURING THE YEAR 2010-11 FROM INDIA 1,39,4 8,187 RECEIVED DURING THE YEAR 2010-11 FROM S..A 48,00,000 TOTAL .. 3,27,48,187 ITA NO.460(B)/14 3 THE APPELLANT DISCLOSED RS.1.00 CRORE OF THE ABOVE IN AY: 2010-11 AND THE BALANCE OF RS.2,27,48,187 WAS CONSIDERED AS INCOME EARNED IN AY: 2011-12. 6. ON CONSIDERATION OF THE APPELLANTS SUBMISSION A ND EVIDENCES AS ABOVE IT IS APPARENT THAT THE PAYMENT BY M/S RC WAS MUCH HIGHER THAN THE CONTRACTED TERMS AND THE APPELLANT HAD NOT PERFORMED SERVICES ADEQUATE TO THE EARNING THEREOF. IT, THER EFORE, CLEARLY REPRESENTS INFLATION OF THE DEBITED CLAIM IN RCS B OOKS OF ACCOUNT BY WAY OF A PROVISION/CONTINGENT LIABILITY WHICH SERVI CES HAD NOT BEEN RECEIVED BY THE COMPANY. IT WOULD BE IN THE FITNES S OF THING, THEREFORE, TO EXAMINE THE MATTER AND MAKE THE DISAL LOWANCE IN THE COMPANYS RETURN OF INCOME. AS FAR AS THE APPELLA NT IS CONCERNED IT IS AN AXIOM THAT THE INCOME THAT IS TAXED MUST B E REAL INCOME WHICH HAS BEEN ACTUALLY EARNED. IN THE PRESENT CAS E THE AMOUNT OF RS.1.4 CRORE HAD CERTAINLY NOT BEEN EARNED IN FY: 2 009-10 BY THE APPELLANT AND HENCE, THE TREATMENT OF PORTION OF THE RECEIPT AS INCOME RECEIVED IN ADVANCE AS A LIABILITY SHOWN I N THE BALANCE SHEET WAS CORRECTLY DONE BY THE APPELLANT. THE AP PELLANTS GROUND RAISED IN THIS MATTER IS ACCORDINGLY, ALLOWED. THE AO IS DIRECTED TO COMMUNICATE THE INFLATED/UN-ACCRUED CLAIM OF EXPEND ITURE BY M/S ROYAL CHALLENGERS SPORTS PVT. LTD., TO THE AO OF TH E COMPANY FOR NECESSARY ACTION. THE APPELLANTS CLAIM OF TDS FOR THE IMPUGNED AMOUNT WILL ONLY BE RESTRICTED TO TDS RELATABLE TO RS.1 CRORE WILL BE ALLOWED IN THE FOLLOWING YEAR WHEN RS.40 LAKHS HAS BEEN SHOWN AS INCOME. 6. FROM THE ABOVE PARAS REPRODUCED FROM THE ORDER O F THE LD. CIT(A) IT IS SEEN THAT A CATEGORICAL FINDING HAS BEEN GIV EN BY THE LD. CIT(A) IN PARA 5.1 & 6 OF HIS ORDER THAT THE ASSESSEE HAD PLAYED O NLY A FEW MATCHES IN MARCH 2010 FOR RC AND PAYMENT OF RS.1.4 CRORE WAS N OT COMMENSURATE WITH THE APPELLANTS EFFORTS NOR IN LINE WITH THE A GREEMENT TERMS. HE ALSO HAS GIVEN FINDING THAT THE TOTAL FEES RECEIVED FROM RC FROM 01-01-2010 TO ITA NO.460(B)/14 4 31-12-2010 FOR THE IPL CONTRACT WAS RS.1.40 CRORE R ECEIVED DURING THE YEAR 2009-10 FROM INDIA AND RS.1.39,48,187/- RECEIVED DU RING THE YEAR 2010- 11 FROM INDIA AND RS.48.00 LAKHS RECEIVED DURING TH E YEAR 2010-11 FROM SOUTH AFRICA AND THE TOTAL RS.3,27,48,187/-AND THE ASSESSEE HAD DISCLOSED RS.1.00 CRORE OUT OF THE ABOVE IN ASSESSMENT YEAR 2 010-11 AND THE BALANCE OF RS.2,27,48,187/- WAS CONSIDERED AS INCOM E EARNED IN ASSESSMENT YEAR 2011-12. UNDER THESE FACTS, IT WA S HELD BY THE LD. CIT(A) THAT THIS AMOUNT OF RS.1.4 CRORE HAD CERTAINLY NOT BEEN EARNED IN FY: 2009-10 BY THE ASSESSEE AND HENCE, THE TREATMENT OF PORTION OF THE RECEIPT AS INCOME RECEIVED IN ADVANCE AS A LIABILITY SHOW N IN THE BALANCE SHEET WAS CORRECTLY DONE BY THE ASSESSEE. HE ALSO DIRECT ED HE AO THAT EH ASSESSEES CLAIM OF TDS FOR THE IMPUGNED AMOUNT WIL L ONLY BE RESTRICTED TO TDS RELATABLE TO RS.1.00 CRORE AS INCOME IN THE ASS ESSMENT YEAR 2010-11 AND THE BALANCE TDS CREDIT WILL BE ALLOWED IN THE F OLLOWING YEAR WHEN RS.40 LAKHS HAS BEEN SHOWN AS INCOME. CONSIDERING THESE FACTS OF THE PRESENT CASE IN ITS ENTIRETY WE FIND NO INFIRMITY I N THE ORDER OF THE LD. CIT(A) AND THEREFORE, WE DECLINE TO INTERFERE WITH THE IMP UGNED ORDER OF THE LD.CIT(A). 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTIONED PAGE. SD/- SD/- (ASHA VIJAYARAGHAVAN) (A.K.GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE: D A T E D : 12.08.2016 AM* ITA NO.460(B)/14 5 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COME S TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE OR DER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHIC H THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPA TCH OF ORDER