DCIT, New Delhi V. M/s. Markem- Image India Pvt. Ltd., Uttar Pradesh

ITA 4885/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3547 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 05-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR YADAV SENIOR
• Assessee Lawyers: K P GARG
• Keywords: Additional evidence
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4885/DEL./2014 (ASSESSMENT YEAR : 2009-10) DCIT, CIRCLE 6 (1), VS. M/S. MARKEM IMAGE INDIA PV T. LTD., NEW DELHI. H 23, SECTOR 63, GAUTAM BUDH NAGAR, UTTAR PRADESH 201 301. (PAN : AAACI2979R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.P. GARG, CA REVENUE BY : SHRI ARUN KUMAR YADAV, SENIOR DR DATE OF HEARING : 02.11.2017 DATE OF ORDER : 08.11.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 6 (1), NEW DELHI (HEREINAFTER REFERRED TO AS THE R EVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE I MPUGNED ORDER DATED 10.06.2014 PASSED BY THE COMMISSIONER OF INCO ME-TAX (APPEALS)-IX, NEW DELHI QUA THE ASSESSMENT YEAR 200 9-10 ON THE GROUNDS INTER ALIA THAT :- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) ERRED IN ALLOWING RE LIEF ITA NO.4885/DEL./2014 2 TO THE ASSESSEE BY RELYING UPON THE ADDITIONAL EVID ENCE ACCEPTED AND WITHOUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER AS PER PROVISIONS OF RULE 46A WHI LE DELETING THE ADDITION OF RS.1,90,03,576/- MADE ON ACCOUNT OF PROVISION FOR CONTINGENCIES? 2. THAT THE ORDER OF THE LD. CIT (A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 3. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ASSESSEE COMPANY IS ENGAG ED IN THE BUSINESS OF MANUFACTURING AND TRADING OF INK JET, L ASER PRINTERS AND CONSUMABLES AND TRADING OF SPARES, AND DECLARED INCOME OF RS.14,50,57,640/- DURING THE YEAR UNDER ASSESSMENT. ASSESSING OFFICER MADE VARIOUS ADDITIONS INCLUDING ADDITION O F RS.1,90,03,576/-, DEBITED TO THE P&L ACCOUNT ON ACC OUNT OF PROVISION OF CONTINGENCIES ON THE GROUND THAT THE A SSESSEE COMPANY HAS NOT SUBMITTED C-FORM ON CENTRAL SALES-T AX AND THEREBY ADDED THE SAME TO THE TOTAL INCOME OF THE A SSESSEE COMPANY. 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION MADE B Y PARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED, THE REVENU E HAS COME UP BEFORE THE TRIBUNAL BY WAY OF CHALLENGING THE IMPUG NED ORDER PASSED BY LD. CIT (A) . ITA NO.4885/DEL./2014 3 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE REVENUE BY FILING THE PRESENT APPEAL HAS RAI SED ONLY ONE GROUND THAT, THE LD. CIT (A) HAS DELETED THE ADDITION BY RELYIN G UPON THE ADDITIONAL EVIDENCE WITHOUT PROVIDING AN O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. THE LD. DR FOR THE REVENUE CHALLENGING THE IMPUG NED ORDER PASSED BY LD. CIT (A) RELIED UPON THE ORDER PASSED BY AO AND DECISION RENDERED BY HONBLE HIGH COURT OF DELHI IN CIT VS. MANISH BUILD WELL (P.) LTD. (2011) 16 TAXMANN.COM 27 (DELHI) . 7. HOWEVER, ON THE OTHER HAND, THE LD. AR FOR THE A SSESSEE COMPANY TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. DR CONTENDED THAT NO ADDITIONAL EVIDENCE HAS BEEN ENTERTAINED BY THE LD. CIT (A) RATHER ENTIRE EVIDENCES WERE BROUGHT ON RECORD DURI NG ASSESSMENT PROCEEDINGS AND DREW OUR ATTENTION TOWARDS PARA 5.1 OF THE ASSESSMENT ORDER. 8. IN RESPONSE TO THE QUERY RAISED BY AO DURING ASS ESSMENT PROCEEDINGS THAT, THE ASSESSEE WAS CALLED UPON TO FURNISH THE DETAILS OF AMOUNT OF RS.1,90,03,576/- DEBITED TO P& L ACCOUNT ON ITA NO.4885/DEL./2014 4 ACCOUNT OF PROVISION FOR CONTINGENCIES MADE DURIN G THE YEAR , THE ASSESSEE COMPANY FURNISHED THE FOLLOWING REPLY :- REGARDING PROVISIONS FOR CONTINGENCIES DEBITED TO P&L ACCOUNT AMOUNTING TO RS.1,90,03,576/- A DETAILE D WORKING ALONGWITH PROOF OF PAYMENTS ARE ENCLOSED. IN THIS REGARD, WE WANT TO CLARIFY THAT THE SAID PROVI SION IS DUE TO DEMAND OF SALES TAX RAISED BY SALES TAX DEPARTMENT FROM TIME TO TIME DUE TO NON SUBMISSION OF C FORM ON CENTRAL SALES. THE SAID EXPENSES IS COVE RED U/S 43B AND ALLOWED ON PAYMENT BASIS. 9. AO HAS CATEGORICALLY MENTIONED IN THE ASSESSMENT ORDER THAT THE PROVISIONS MADE BY THE ASSESSEE COMPANY DUE TO THE DEMAND OF SALES-TAX RAISED BY SALES-TAX DEPARTMENT FROM TIME TO TIME DUE TO NON-SUBMISSION OF C-FORM ON CENTRAL SALES-TAX AND S UBMISSION OF C-FORM IS NOT THE LIABILITY OF THE ASSESSEE. SO, T HIS AMOUNT CANNOT BE DEBITED TO P&L ACCOUNT ON ACCOUNT OF NON-SUBMISS ION OF C- FORM. 10. AO HAS RECORDED CONTRADICTORY FINDINGS. WHEN I T IS NOT LIABILITY OF THE ASSESSEE TO SUBMIT THE C-FORM THEN HOW THE ASSESSEE CAN BE BARRED FROM DEBITING THE AMOUNT TO THE P&L ACCOUNT BY MAKING PROVISION FOR CONTINGENCIES PAR TICULARLY IN THE FACE OF THE FACT THAT THE SAID EXPENSES IS COVERED U/S 43B AND ALLOWED ON PAYMENT BASIS. SO, WHEN THE ASSESSEE HA S FILED RELEVANT COPIES OF THE ASSESSMENT ORDER PASSED BY SALES-TAX AUTHORITY CONCERNING ADDITIONAL DEMAND OF RS.1,39,80,095/- OU T OF PROVISION ITA NO.4885/DEL./2014 5 CREATED OF RS.1,90,03,576/- AND THE BALANCE AMOUNT OF RS.50,23,481/- IS ADDED AS TAXABLE AMOUNT IN THE CO MPUTATION OF INCOME, NO UNASCERTAINED LIABILITY HAS BEEN CLAIMED BY THE ASSESSEE. SO, LD. CIT (A) HAS THRASHED ALL THESE F ACTS ON THE BASIS OF DOCUMENTS ALREADY PRODUCED BEFORE THE AO. IN TH E GIVEN CIRCUMSTANCES, THE DECISION OF MANISH BUILD WELL (P.) LTD. (SUPRA) RELIED UPON BY LD. DR IS NOT APPLICABLE TO THE FACT S AND CIRCUMSTANCES OF THE CASE. 11. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, FINDI NG NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER, PRE SENT APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 8 TH DAY OF NOVEMBER, 2017. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) PRESIDENT JUDICIAL MEMBER DATED THE 8 TH DAY OF NOVEMBER, 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-IX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.