Otik Hotels & Resorts Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 4891/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3943 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-04-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 09-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: SB GUPTA
• Keywords: Unexplained investment
• Section: 147; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A. NO.4891/DEL/2010 ASSESSMENT YEAR : 2003-04 OTIK HOTELS & RESORTS PVT. LTD., VS. DY. CIT, J-33, COMMUNITY CENTRE, RAJOURI CIRCLE 13(1), GARDEN, NEW DELHI NEW DELHI PAN NO.AAACO3823A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.B. GUPTA, FCA RESPONDENT BY : SHRI A.K. MONGA, SR. DR ORDER PER K.G. BANSAL, AM: THE FACTS OF THE CASE ARE THAT THE RETURN DECLARING TOTAL LOSS OF `10,12,610/- WAS FILED ON 02.12.2003. THE RETURN WAS PROCESSED ON 05 .02.2004. THEREAFTER, THE ASSESSING OFFICER RECEIVED A COPY OF BALANCE SHEET FURNI SHED BY THE ASSESSEE- COMPANY TO THE INDIAN RAILWAY CATERING AND TOURISM CO RPORATION (IRCT & CL). THIS BALANCE SHEET WAS COMPARED WITH THE BALANCE SHEET FILED ALON G WITH THE RETURN OF INCOME. CERTAIN DISCREPANCIES WERE NOTED. ONE OF THE DIFF ERENCES NOTED WAS THAT THE TOTAL OF THE TWO BALANCE SHEETS DID NOT TALLY. TH E DIFFERENCE IN THE TOTALS OF TWO BALANCE SHEETS AMOUNTED TO `8,71,896/-. IN VIEW THEREOF, PROCEEDING WERE INITIATED U/S 147 OF THE ACT. THE CASE OF THE ASSESSEE WAS THAT THE DIFFERENCE ARISES ON ACCOUNT OF PRESENTATION ONLY AND, AS SUCH, THERE IS NO REAL DIFFERENCE. HOWEVER, THE ASSESSING OFFICER DID NOT AGREE WITH THIS SUBMISSION . HE DEDUCTED A SUM OF `8,71,896/-, WHILE COMPUTING THE LOSS. 2 1.1 AGGRIEVED BY THIS ORDER, THE ASSESSEE MOVED AN APPEAL B EFORE THE CIT(A)- XVIII, NEW DELHI, WHO DISPOSED IT OFF ON 02.08.2010 I N APPEAL NO.62/09-10. THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE TH E LEARNED CIT(A) WERE THE SAME AS BEFORE THE ASSESSING OFFICER. THE LEARNED CIT(A ) FOUND THE SUBMISSIONS TO BE GENERAL AND VAGUE. THEREFORE, HE UPHELD THE ORDER OF TH E ASSESSING OFFICER BY MAKING FOLLOWING REMARKS:- IN THE WRITTEN SUBMISSION OF THE LEARNED AR FILED ON 13. 05.2010 IT IS ONLY SUBMITTED THAT THE PROFIT AND LOSS ACCOUNT OF B OTH /BALANCE SHEETS SHOWED LOSS OF `8,71,896/- WHICH WAS CARRIED FO RWARD TO BALANCE SHEET. THE DIFFERENCE IN ASSETS SIDE OF BALANCE SH EETS AS SEEMS IS DUE TO THE REASONS THAT IN ONE BALANCE SHEET, THE AC COUNTANT HAS DISCLOSED DEBIT BALANCE OF PROFIT AND LOSS ACCOUNT ON ASSET SIDE OF BALANCE SHEET WHILE IN OTHER BALANCE SHEET, DEBIT BALANCE OF PROFIT AND LOSS ACCOUNT WAS DISCLOSED AS NEGATIVE BALANCE ON L IABILITY SIDE OF BALANCE SHEET. HOWEVER, THE ABOVE CONTENTION OF THE LEAR NED AR IS VAGUE AND DOES NOT ADDRESS THE ISSUE IN QUESTION AS TO THE REASON FOR THE SUBSTANTIAL DIFFERENCE IN THE ASSET SIDE OF THE TWO BALANCE SHEETS. NEEDLESS TO SAY, THE PREPARATION OF TWO SETS OF AU DITED ACCOUNTS FOR THE SAME PERIOD SHOWING DIFFERENT FIGURES UN DER VARIOUS HEADS CANNOT BE ALLOWED UNDER ANY LAW OR UNDER ANY ACCOU NTING STANDARD OR PRINCIPLE LAID DOWN BY THE INSTITUTE OF CA OF INDIA. MOREOVER, THE DISCREPANCIES IN THE TOTAL OF THE ASSET SIDE O F TWO BALANCE SHEETS HAS NOT BEEN EXPLAINED BY THE APPELLANT. THER EFORE, I HAVE NO HESITATION IN CONFIRMING THE REJECTION OF BOOK S OF ACCOUNT BY THE ASSESSING OFFICER U/S 145 AND THE ADDITION OF `8,71 ,896/- AS UNEXPLAINED INVESTMENT. THE ABOVE GROUND OF APPEAL IS ACC ORDINGLY DISMISSED. 1.2 AGGRIEVED BY THIS ORDER, THE ASSESSEE IS IN APPEAL BEFOR E US. 2. THE LEARNED COUNSEL SUBMITS THAT ONE OF THE BALANCE SHEET S SHOWS THE DEBIT OF PROFIT AND LOSS ACCOUNT, AMOUNTING TO `8,71,896/ -, AS AN ASSET AS ON 31.03.2003. THIS LOSS HAS BEEN WIPED OUT ON 31.03.20 04 AND THE BALANCE SHEET AS ON 31.03.2004 SHOWS AN AMOUNT OF `11,16,517/- AS THE LIABILITY. THIS BALANCE 3 SHEET ALSO SHOWS THE POSITION AS ON 31.03.2004 AS REQUI RED BY THE COMPANIES ACT. THE BALANCE SHOWN SHOWS THE LIABILITY AT MINUS `8,71,8 96/-. THE CASE OF THE LEARNED COUNSEL IS THAT THE ASSET OF `8,71,896/- IN ONE BALANCE SHEET HAS BEEN SHOWN AS LIABILITY OF MINUS `8,71,896/-. THE TWO P RESENTATIONS MEAN THE SAME THING. THAT IS WHY ONE BALANCE SHEET SHOWS TOTAL OF ` 2,23,31,497/- AND THE OTHER BALANCE SHEET SHOWS THE TOTAL OF `2,14,66,601/-. AS MEN TIONED EARLIER, THIS DIFFERENCE IN TOTAL ALSO ARISES ON ACCOUNT OF DIFFERENT M ETHODS OF PRESENTATION OF THE LOSS AS PER PROFIT AND LOSS ACCOUNT. HOWEVER, THERE IS NO DIFFERENCE AS SUCH. 2.1 IN REPLY, THE LEARNED DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSION S MADE BEFORE US. WE FIND THAT TWO BALANCE SHEETS DIFFER IN TERMS OF TOTALS ONLY BECAUSE IN ONE BALANCE SHEET THE LOSS IN PROFIT AND LOSS ACCOUNT HAS B EEN SHOWN AS AN ASSET AND IN THE OTHER AS A LIABILITY OF NEGATIVE VALUE. THIS DOES NO T MAKE A DIFFERENCE TO THE TOTAL ASSETS ACTUALLY HELD BY THE ASSESSEE. THEREFORE, THERE WAS NO JUSTIFICATION FOR UPHOLDING THE ADDITION. 4. IN RESULT, THE APPEAL IS ALLOWED. ORDER WAS PRONOUNCED IN OPEN COURT ON 13.05.2011. SD/- SD/- ( I.P. BANSAL ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTA NT MEMBER NS DT.13.05.2011. COPY FORWARDED TO:- 4 1. OTIK HOTEL & RESORTS PVT. LTD., J-33, COMMUNITY CENTRE, RAJOURI GARDEN, NEW DELHI 2. DY. CIT, CIRCLE 13(1), NEW DELHI 3. THE RESPONDENT 4. THE CIT 5. THE CIT (A)-, NEW DELHI. 6. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).