Aradhana Drinks and Beverages Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 5005/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4090 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 21-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH , JUDICIAL MEMBER ITA NO. 5005 /DEL/201 6 [ASSESSMENT YEAR: 20 1 2 - 1 3 ] ARADHANA DRINKS AND BEVERAGES PVT. LTD VS. THE DY .C.I.T [NOW KNOWN AS PEPSICO INDIA SALES CIRCLE 3(1) PVT. LTD] NO. 54, NEW DELHI LOWER GROUND FLOOR, WORLD TRADE CENTRE, BARAKHAMBHA ROAD NEW DELHI PAN : AAECA 4452 H ITA NO. 5006 /DEL/201 6 [ASSESSMENT YEAR: 20 12 - 13 ] ARADHANA FOODS & JUICES PVT. LTD VS. THE DY .C.I.T [NOW MERGED WITH PEPSICO INDIA HOLDINGS CIRCLE 3(1) PVT. LTD], NO. 54, NEW DELHI LOWER GROUND FLOOR, WORLD TRADE CENTRE, BARAKHAMBHA ROAD, NEW DELHI PAN : AAECA 4452 H [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 2 . 0 1 .201 8 DATE OF PRONOUNCEMENT : 22 . 01 .201 8 ASSESSEE BY : NONE REVENUE BY : S MT. APARNA KARAN, CIT - DR 2 ITA NOS. 5 0 0 5 & 5 0 0 6 /DEL/201 6 ORDER PER B.P. JAIN, ACCOUNTANT MEMBER, BOTH THE ABOVE APPEA L S FILED BY T WO DIFFERENT ASSESSEE S ARE DIRECTED AGAINST THE TWO DIFFERENT ORDER S DATED 12 . 07 .201 6 OF COMMISSI ONER OF INCOME TAX (APPEALS) - 1 , NEW DELHI AND RELATES TO ASSESSMENT YEAR 20 12 - 1 3 . 2. SINCE BOTH THE APPEALS WERE HEARD TOGETHER PERTAINING TO SAME ASSESSEE INVOLVING IDENTICAL ISSUES, WE ARE DISPOSING THEM OFF TOGETHER BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. EXCEPT FOR THE AMOUNT OF ADDITION, ALMOST IDENTICAL GRO UNDS HAVE BEEN TAKEN BY THE ASSESSEE IN BOTH THE APPEALS. FIRST WE TAKE UP ITA NO. 5 0 0 5 /DEL/201 6 . OUR DECISION HEREINBELOW SHALL IDENTICALLY BE APPLICABLE IN ITA NO. 5 0 0 6 /DEL/201 4 . 4. THE GROUNDS RAISED IN ITA NO. 5 0 0 5 /DEL/201 6 READ AS UNDER: 1 . THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) MERELY RELYING ON THE ORDER OF HIS PREDECESSOR, HAS ERRED IN UPHOLDING THE AD HOC DISALLOWANCE OF RS 39,152,000, BEING TEN 3 ITA NOS. 5 0 0 5 & 5 0 0 6 /DEL/201 6 PERCENT O F THE TOTAL OPERATING EXPENDITURE OF RS 391,520,000, MADE BY THE ASSESSING OFFICER (AO) ALLEGING THAT THE SAME TO BE UNREASONABLE AND EXCESSIVE WITHOU T BRING ING A NYTHIN G ON RECORD IN SUPPORT THEREOF. 2 . THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN UPHOLDING THE AD - HOC DISALLOWANCE OF OPE RATING EXPENDITURE AMOUNTING TO RS 39,152,000 DESPITE CONFIRMING THAT THE APPELLANT HAD DULY PRODUCED LEDGER ACCOUNTS BEFORE THE AO AND CIT(A) IN SUPPORT OF OPERATING EXPENDITURE INCURRED. 5 . BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS CLAIMED OPERATING EXPENSES TO THE TUNE OF RS. 3,91,52,000/ - IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSEE WAS REQUIRED TO PRODUCE BILLS OF OP ERATING EXPENSES ALONGWITH LEDGER COPIES WITH VERIFICATION ALONGWITH BOOKS OF ACCOUNT, BILLS AND VOUCHERS. THE ASSESSEE, IN FACT, CONTENDED THAT HE HAS PRODUCED BOOKS OF ACCOUNT ON 17.02.2015. THE ASSESSEE ALSO SUBMITTED EXPLANATION WITH REGARD TO ALLOWANC E OF THE SAID EXPENDITURE AND NOT TO MAKE ANY ADDITIONS. THE REPLY OF THE ASSESSEE WAS NOT FOUND SATISFACTORY. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNT FOR CLAIM OF OPERATING EXPENSES AND ACCORDINGLY, A S UM OF RS. 3,91,52,000/ - I.E 10% OF RS. 39,15,20,000/ - WAS ADDED TO THE INCOME OF THE ASSESSEE. 4 ITA NOS. 5 0 0 5 & 5 0 0 6 /DEL/201 6 6 . BEFORE THE ID. CIT(A), THE ASSESSEE PRODUCED DETAILS ALONGWITH BOOKS OF ACCOUNT AND THE ID. CIT(A), IN FACT, HE ACCEPTED THE CON TENTION OF THE ASSESSEE THAT THE ASSESSEE HAS PRODUCED LEDGER ACCOUNT BEFORE THE ASSESSING OFFICER BUT IN THE ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 IN ASSESSEES OWN CASE THERE WERE SUCH DISALLOWANCES AND THE ID. CIT(A) WAS, THEREFORE, OF THE VIEW NOT TO DE VIATE FROM THE SAID DECISION OF THE ID. CIT(A) IN THE EARLIER ORDERS OF THE ASSESSEE IN ASSESSMENT YEAR 2008 - 09 AND 2009 - 10. ACCORDINGLY, HE CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 7 . WE HAVE CONSIDERED THE ARGUMENTS MADE BY THE LD. DR, PERUSED THE ORDERS OF THE A.O AND THE LD. CIT(A). IT IS RELEVANT AND PERTINENT TO REPRODUCE THE ORDER OF THE ITAT WHICH READS AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, OBSERVATION OF THE ASSESSING OFFICER AND THE DECISION TAKEN IN EARLIER YEARS ASSESSMENT YEAR BY THE LD. CIT(A) V, VI. IT IS NOTED THAT THE APPELLANT HAS DULY PRODUCED LEDGER ACCOUNTS VIDE SUBMISSION DATED FEBRUARY 17, 2015 BEFORE THE ASSESSING OFFICER AND THE SAME WERE PRODUCED BEFORE ME AS PART OF THE PAPER BOOK. HOWEVER, THE OPERATING EXPENSES ARE UNREASONABLE AND EXCESSIVE. SUCH DISALLOWANCES HAVE ALSO BEEN CONFIRMED IN ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 IN APPELLANTS OWN CASE. I 5 ITA NOS. 5 0 0 5 & 5 0 0 6 /DEL/201 6 SEE NO REASON TO DEVIATE FROM THE FINDINGS GIVEN BY THE LD. CIT(A) V, VI IN ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 AND ACCORDINGLY THE DISALLOWANCE OF 10% OF OPERATING EXPENSES IS CONFIRMED AS SAME ARE UNREASONABLE AND EXCESSIVE. 8. ON A CAREFUL PERUSAL O F THE ORDER OF THE LD. CIT(A), I T IS EVIDENT THAT THE MAIN ALLEGATION OF THE ASSESSING OFFICER IS THAT THE ASSESSEE HA S NOT PRODUCED BOOKS OF ACCOUNT. THE LEDGER ACCOUNT HAS NOT BEEN ACCEPTED BY THE LD. CIT(A). THE LD. CIT(A), IN FACT, WITHOUT POINTING OUT ANY REASONABLENESS AND WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE RECORD HAS SIMPLY FOLLOW ED TH E ORDER S O F THE PRECEDING ASSESSMENT YEAR S 2008 - 09 AND 2009 - 10 WHICH CANNOT BE ACCEPTED SINCE THE SAID YEAR S ARE DIFFE RE NT ASSESSMENT Y E AR S . THE ASSESSING OFFICER SHOULD HAVE APPLIED HIS MIND IN POINTING OUT THE S PECIFIC DEFECTS BEFORE MAKING ANY DISALLOWANCE AS WITH REGARD TO OPERATING EXPENSES. IN FACT, T HE SAME HAS NOT BEEN DONE BY EITHER OF THE AUTHORITIES BELOW. ACCORDINGLY, IN THE INTEREST OF JUSTICE, THE MATTER IS SET ASIDE TO THE FILE OF THE ASSESSING OFF ICER WHO WILL DECIDE THE ISSUE BY VERIFYING T HE OPERATING EXPENSES FROM THE VOUCHERS, BILLS AND BOOKS OF ACCOUNT AND DECIDE THE ISSUE DE NOVO AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS , THE ISSUE IS SET ASIDE TO THE FILE OF T HE ASSESSING 6 ITA NOS. 5 0 0 5 & 5 0 0 6 /DEL/201 6 OFFICER AND THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 9. SINCE THE ISSUES RAISED IN ITA NO. 5006/DEL/2016 ARE IDENTICAL TO THOSE DECIDED BY US ABOVE, THEREFORE, OUR DECISION HEREINABOVE IN ITA NO. 5005/DEL/2016 WILL APPLY MUTATIS MUTANDIS TO THIS CASE AS WELL. ACCORDINGLY, THE ISSUES ARE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME DE NOVO AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 2 . 01.2018 . SD/ - SD/ - [ KULDIP SINGH ] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 2 N D JANUARY, 2018 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI