ACIT, UDAIPUR V. Smt. Neha Manmani, UDAIPUR

ITA 505/JODH/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7802 (ITAT-JODHPUR)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 11-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Reassessment proceedings
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 505 /JODH/2013 (A.Y. 200 7 - 08 ) A CIT, CIRCLE - 1, VS. SMT. NEHA MANWANI, UDAIPUR. PROP. M/S. LIBERTY SALES, C - 115, PRATAP NAGAR, UDAIPUR (RAJ.) . PAN NO. AHRPM 9805 F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRA W AN KUMAR GUPTA DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 17 / 0 7 /201 4 . DATE OF PRONOUNCEMENT : 06 /0 8 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 12 /0 8 /2013 OF L D . CIT(A), UDAIPUR . 2 THE ONLY GRIEVANCE OF THE DEPARTMENT IN THIS APPEAL RELATES TO THE DELETION OF ADDITION OF RS. 18,27,045/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF COMMISSION RECEIPTS . 2 3. FACTS RELATING TO THIS CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME SHOWING TOTAL INCOME AT RS. 12,34,960/ - W HICH WAS PROCESSED U / S 143 (1) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) . LATER ON, THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS FRAMED AT AN INCOME OF RS. 14,49,960/ - U/S 143(3) OF THE ACT ON 29/12/2009 . THEREAFTER, THE CASE WAS REOPENED U/S 148 OF THE ACT BY OBSERVING THAT THE ASSESSEE RECEIVED COMMISSION OF RS. 98,43,533 / - FROM ICICI BANK WHEREAS COMMISSION OF RS. 81,83,107/ - WAS SHOWN IN THE PROFIT & LOSS ACCOUNT , T HUS, SHORT COMMISSION OF RS. 18,27,045/ - WAS TAKEN . THE ASSESSING OFFICER, AFTER REOPENING THE CASE, MADE THE ADDITION OF RS. 18,27,04 5/ - IN THE INCOME ASSESSED U/S. 148/143(3) OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER MADE THE ADDITION WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE FROM THE BOOKS OF ACCOUNTS AND RECORDS IT WAS FURTHER STATED THAT THE ASSESSING OFFICER HAD NOT RECONCILED OR VERIFIED THE INCOME DECLARED UNDER OTHER HEADS AND ALSO THE EXPENDITURE DEDUCTED BY THE ICICI BANK. IT WAS EXPLAINED THAT THERE WAS DIFFERENCE IN SYSTEM OF ACCO UNTING OF THE ASSESSEE AND THAT OF ICICI 3 BANK , THE ASSESSEE HAD DECLARED THE RECEIPTS FROM ICICI BANK UNDER DIFFERENT HEADS WHICH INCLUDED COMMISSION ACCOUNT, SERVICE TAX ACCOUNT, SALARY REIMBURSEMENT ACCOUNT , SALARY AND INC EN T IVE/PL ACCOUNT ETC. IT WAS FURTHER STATED THAT THERE WERE CERTAIN DEDUCTION BY THE ICICI BANK AGAINST THE GROSS COMMISSION WH I CH WAS PART AND PARCEL OF THE BUSINESS AND ALLOWABLE EXPENSES IN THE HANDS OF THE ASSESSEE. IT WAS CONTENDED THAT THE ASSESSEE HAD DECLARED NET RECEIPTS AFTER EXCLUDING SUCH DEDUCTIONS FROM THE GROSS RECEIPTS , THE NET INCOME WAS CORRECTLY APPEARING AND THE DIFFERENCE AS PER ACCOUNTING SYSTEM WAS DULY RE C O NC I LED WHICH THE ASSESSING OFFICER HAD NOT APPRECIATED AT T HE TIME OF REASSESSMENT PROCEEDINGS AND ARRIVED AT A WRONG CONCLUSION. THE ASSESSEE ALSO FURNISHED THE RECONCIL IATION STATEMENT TO THE LD. CIT(A) . THE ASSESSEE FURTHER SUBMITTED TO THE LD. CIT(A) AS UNDER: - THE ICICI BANK HAS DECLARED GROSS COMMISSION IN THE CERTIFICATE AT RS.98,43,533/ - THE ASSESSEE HAD DECLARED IN ACCOUNTS THE NET RECEIPTS FROM ICICI BANK UNDER FOUR DIFFERENT HEADS I.E. (1) COMMISSION FROM ICICI BANK RS.81,83,107/ - (2) SERVICE TAX ACCOUNT R S. 8,83,486/ - (3) RECEIPT CREDITED IN SALARY REIMBURSEMENT ACCOUNT FOR RS.4,03,465/ - AND (4) RECEIPT CREDITED IN SALARY AND INCENTIVE - PL ACCOUNT RS.54,803/ - . HENCE IN ALL NET RECEIPTS WERE DECLARED IN ACCOUNTS AT RS.95,24,861/ - FURTHER IN ACCOUNTS THE DE DUCTION MADE BY THE ICICI BANK WERE DIRECTLY ADJUSTED FROM THE GROSS RECEIPT TO THE EXTENT OF RS.3,18,672/ - AND HENCE THE TOTAL AMOUNT RECEIVED FROM ICICI BANK IS RECONCILED FROM THE ACCOUNTS MAINTAINED BY THE ASSESSEE. IN ORDER TO EXPLAIN THE RECEIPTS WHI CH WERE CREDITED IN DIFFERENT ACCOUNTS, WE HAVE TO SUBMIT THAT THE ICICI BANK HAS ALLOWED CREDIT AGAINST VARIOUS ACTIVITIES/SERVICES PROVIDED BY THE ASSESSEE AND IN ORDER TO PROPER APPRECIATION OF BUSINESS CONDUCTED SUCH RECEIPTS WERE SEPARATELY 4 ACCOUNTED FOR. THE TOTAL RECEIPTS WERE RECONCILED WITH THE BANK ACCOUNTS ALSO. THERE WAS NO DIFFERENCE FOUND BY THE LEARNED ASSESSING OFFICER IN THE BANK ACCOUNT AND ALL THE RECEIPTS FORM ICICI BANK WERE THROUGH BANK CHANNELS ONLY. THERE WAS NOT A SINGLE TRANSACTION IN CASH. CONSIDERING THE OVERALL POSITION AND FACTS OF THE CASE AND AFTER APPRECIATION OF THE RELEVANT RECORDS MAINTAINED BY THE ASSESSEE AND PLACED ON RECORDS OF THE LEARNED ASSESSING OFFICER AT THE TIME OF REASSESSMENT PROCEEDINGS IT APPEARS THAT THE AR BITRARY ADDITION WAS MADE JUST ON ASSUMPTIONS AND PRESUMPTIONS WITHOUT RECONCILING THE CORRECT POSITION FROM THE RECORDS. PLEASE NOTE THAT THE POSITION WAS DULY EXPLAINED AT THE TIME OF ORIGINAL ASSESSMENT AND THE THEN LEARNED ASSESSING OFFICER HAS VERIFIE D THE DIFFERENCE FROM THE RECORDS PRODUCED BEFORE HIM AND ACCORDINGLY HE HAS NOT MADE ANY COMMENT IN THE ORDER IN THIS RESPECT. THE ARBITRARY ADDITION MADE BY THE LEARNED ASSESSING OFFICER IN THE REASSESSMENT PROCEEDINGS IGNORING ALL THE MATERIAL FACTS AVA ILABLE ON RECORDS IS NOT JUSTIFIABLE AS THE SAME IS CONTRARY TO THE FACT OF THE CASE. THE ADDITION REQUIRES TO BE DELETED ON THIS ACCOUNT ALSO. WE REQUEST YOUR GOOD SELF TO PLEASE DELETE THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER WITHOUT APPRECIATI NG THE BOOKS OF ACCOUNTS, RECORDS AND THE SYSTEM OF ACCOUNTING CONSISTENTLY FOLLOWED BY THE ASSESSEE. 5. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETED THE ADDITION BY OBSERVING AS UNDER: - I) THE APPELLANT HAD DECLARED RECEIPTS FROM ICICI BANK UNDER DIFFERENT HEADS , II) THE RECEIPTS WERE CREDITED AS UNDER : - A) THE RECEIPTS CREDITED UNDER THE HEAD SERVICE TAX ACCOUNT RS. 8,83,486/ - WERE SEPARATELY CREDITED AND DECLARED IN ACCOUNT AS LIABILITY WAS PAID BY THE APPELLANT FROM T IME TO TIME . THE CREDIT AS WELL AS DEBIT ENTRIES APPEARING IN ACCOUNTS ARE VERIFIABLE FROM LEDGER ACCOUNT. HENCE, THE SAME IS NOT APPEARING IN P & L ACCOUNT. B) THE RECEIPTS OF RS. 4,03,465/ - RELATED TO REIMBURSEMENT OF SALARY OF EXECUTIVES BY ICICI BANK WA S ALSO CREDITED SEPARATELY IN EXPENDITURE ACCOUNT ITSELF. THE GROSS EXPENDITURE WAS OF RS. 5 8,15,840/ - OUT OF WHICH THE ABOVE RS. 4,03,465/ - WAS ADJUSTED IN ACCOUNTS AND THE NET EXPENDITURE OF RS. 4,12,375/ - IS APPEARING IN THE P &L ACCOUNT. C) THE RECEIPTS O F RS. 54,803/ - RELATED TO REIMBURSEMENT OF SALARY AGAINST ICICI PERSONAL LOAN WAS ALSO CREDITED SEPARATELY IN EXPENDITURE ACCOUNT ITSELF. THE GROSS EXPENDITURE WAS OF RS. 3,38,053/ - OUT OF WHICH THE ABOVE RS. 54,803/ - WAS ADJUSTED IN ACCOUNTS AND THE NET E XPENDITURE OF RS. 2,83,250/ - IS APPEARING IN P &L ACCOUNT. D) THE ICICI BANK HAD DEDUCTED FROM THE GROSS COMMISSION DEDUCTION ON ACCOUNT OF PDD ETC. AS APPEARING IN THE COMMISSION ACCOUNT OF AUTO LOAN ITSELF. THE GROSS COMMISSION ON AUTO LOAN ACCOUNT WAS OF RS. 44,80,471/ - AND OUT OF WHICH THE ICICI BANK HAD DEDUCTED RS. 3,40,243/ - AGAINST PDD ETC. WHICH WAS ADJUSTED AND NET RECEIPT WAS DECLARED IN P & L ACCOUNT IN COMMISSION ACCOUNT. CONSIDERING THE ABOVE REASONS IN SYSTEM OF ACCOUNTS AND SEPARATE ACCOUNTING BY THE APPELLANT I AM OF THE OPINION THAT THE LD. AO WAS NOT IN A POSITION TO RECONCILE THIS DIFFERENCE AT THE TIME OF ASSESSMENT. AS THE DIFFERENCE IS RECONCILED FROM ACCOUNTS ITSELF THE ADDITION MADE BY THE LD. AO IS NOT JUSTIFIED AND HENCE DESERVED TO BE DELETED. ACCORDINGLY THE ADDITION OF RS. 18,27,045/ - ON ACCOUNT OF ALLEGED SHORT RECEIPTS DECLARED BY THE ASSESSEE FROM THE ICICI BANK IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. NOW THE DEPARTMENT IS IN APPEAL. 6 . LEARNED D.R. STRONGLY SUPPORTED T HE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER BECAUSE THERE WAS A DIFFERENCE IN THE FIGURE S MENTIONED BY THE ICICI BANK IN TDS CERTIFICATE AND THE COMMISSION SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS , THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION . 6 7 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE , IT IS NOTICED THAT THE ICICI BANK HAD DECLARED GROSS COMMISSION IN THE TDS CERTIFICATE AT RS. 98,43,533/ - . THE ASSESSEE HAD DECLARED THE NET RECEIPTS FROM ICICI BANK UNDER FOUR DIFFERENT HEADS AS UNDER: - 1) C OMMISSION RS. 81,83,107/ - 2) SERVICE TAX RS. 8,83,486/ - 3) SALARY REIMBURSEMENT RS. 4,03,465/ - 4) SALARY AND INCENTIVE/ PL ACCOUNT RS. 5 4,803/ - TOTAL RS. 95,24,861/ - THE ASSESSEE ALSO EXPLAINED THAT THE DIFFERENCE OF RS. 3,18,672/ - WAS DIRECTLY ADJUSTED ON ACCOUNT OF DEDUCTION MADE BY THE ICICI BANK FROM THE GROSS RECEIPTS . T HUS, THERE WAS NO DIFFERENCE BECAUSE THE ASSESSEE HAD SHOWN AT RS. 95,24,864/ - UNDER DIFFEREN T HEADS AND THE SAID FIGURE MATCHED WITH THE COMMISSION RECEIVED FROM ICICI BANK I.E. RS. 95,24,861/ - (RS. 98,43,533/ - ( - ) RS. 3,18,672/ - ) AS THE ASSESSEE 7 RECONCILED THE FIGURE FROM THE ACCOUNTS WHICH MATCHED WITH THE GROSS COMMISSI ON SHOWN BY THE ICICI BANK IN THE CERTIFICATE. THEREFORE, DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS RIGHTLY DELETED BY THE LD. CIT(A) . IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT . 9 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 06 TH AUGUST , 201 4) . SD/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 06 TH AUGUST , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .