M/s Premier Book Co., New Delhi V. CIT, New Delhi

ITA 534/DEL/2011

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3523 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 11-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 01-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENU AMITABH
• Assessee Lawyers: B K ANAND
• Keywords: Revision of order
• Section: 263

Judgement Text

1 ITA NO. 534/DEL/2011 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 534/DEL/2011 ( A.Y 2007-08) PREMIER BOOK CO. ANSARI ROAD, 23 DARYAGANJ NEW DELHI AAEFP8468R (APPELLANT) VS CIT DELHI-X D SHAPED BUILDING, I.P. ESTATE NEW DELHI (RESPONDENT) APPELLANT BY SHRI B. K. ANAND, CA RESPONDENT BY SMT. RENU AMITABH, CIT(DR) ORDER PER SUCHITRA KAMBLE THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 30/12/2010 PASSED BY COMMISSIONER OF INCOME TAX X, NEW DELHI U/S 263 OF THE INCOME TAX ACT, 1961. 2. THE CIT UNDER SECTION 263 OF THE ACT HELD AS UND ER:- THE RETURN OF INCOME DECLARING A TOTAL INCOME OF R S.18839028/- WAS FILED ON 6/11/2007. THE CASE WAS PROCESSED U/S 143(1) ON 31/10/2008. SUBSEQUENTLY, THE ASSESSMENT U/S 14 3(3) OF THE I.T ACT WAS COMPLETED BY THE ADDL. CIT RANGE-30 ON DATE OF HEARING 09.10.2017 DATE OF PRONOUNCEMENT 07.11.2017 2 ITA NO. 534/DEL/2011 21/12/2009 AT A TOTAL INCOME OF RS.27299320/-. THI S PARTICULAR CASE WAS PICKED UP FOR INSPECTION OF THE CIT AND DURING THE COURSE OF INSPECTION, IT WAS OBSERVED TH AT THE ASSESSMENT ORDER PASSED BY THE ADDL. CIT(A) RANGE-3 0, NEW DELHI WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 3. THE CIT HAS TAKEN THREE ISSUES WHILE ISSUING NOT ICE U/S 263(1). THE ISSUES ARE INTEREST INCOME ON FDRS OF FERED IN CURRENT ASSESSMENT YEAR 2007-08 AMOUNTING TO RS.54,78,568/- JUSTIFICATION OF EXPENDITURE/PAYMENT OF ROYALTY DEB ITED TO THE PROFIT AND LOSS ACCOUNT ON THE FIGURES OF ROYALTY WHEN NO WHERE SEPARATELY APPEARING IN THE PROFIT AND LOSS ACCOUNTS AND ANNEX URE E OF THE TAX ON THE PREAMBLE DID NOT PROFIT COMPLETE PICTURE TO WORK OUT THE FIGURE DISALLOWANCE U/S 40(A) (IA) OF THE ACT BUT W HILE DECIDING THE ISSUES THE CIT HELD THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL THE INTEREST OF THE REVEN UE. WHILE EXPRESSING HIS OPINION WHY THESE 3 ISSUES HAS TO BE AGAIN RE- VERIFIED BY THE ASSESSING OFFICER HE HAS GIVEN THE FINDING THAT AS REGARDS ROYALTY NO VERIFICATION WAS MADE BY THE ASS ESSING OFFICER AS REGARDS ANNEXURE E OF THE TAX AUDIT REPORT FOR D ISALLOWANCE U/S 40(A). THE ASSESSING OFFICER DID NOT CALL FOR ANY DETAILS TO VERIFY AND FOR THE ISSUE OF INTEREST INCOME, THE CIT(A) HELD T HAT THE ASSESSEE FIRM DID NOT ACCOUNT FOR THE COMPLETE INTEREST INCO ME ON ACCRUAL ISSUES AND THE ORDER PASSED BY THE ASSESSING OFFICE R WAS ERRONEOUS. 3 ITA NO. 534/DEL/2011 4. THE LD. AR SUBMITTED THAT THE CIT(A) HAS EXPRES SED HIS OPINION DIFFERENT FROM THE ASSESSING OFFICER WHICH WAS NOT PERMISSIBLE UNDER THE ACT. IN-FACT, THE ISSUES BEF ORE THE ASSESSING OFFICER WERE ALREADY ALLOWED BY THE ITAT IN ASSESS MENT YEAR 2002- 03 AND ALSO THE CIT(A) ALLOWED THE SAME ISSUES. IN 2005-06 & 2006-07 THE DEPARTMENT HAS NOT GONE INTO APPEAL IN THOSE MATTERS. THUS, THE DEPARTMENT HAS ACCEPTED THE INTEREST ELEM ENT AT ASSESSMENT PROCEEDINGS. AS REGARDS ROYALTY THERE W AS NO ERROR AS ALL THE DOCUMENTS WERE VERIFIED BY THE ASSESSING OF FICER AT THE TIME OF ASSESSMENT PROCEEDINGS. 5. THE LD. DR SUBMITTED THAT THE CIT HAS PROPERLY I NCORPORATED ALL THE REASONS AS PER THE SECTION 263 OF THE ACT. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IN-FACT, THE ISSUES BEFORE THE ASSESSING OFFICER WERE ALREADY ALLOWED BY THE ITAT IN ASSESSMENT YEAR 2002-03 AND ALSO THE CIT(A) ALLOWED THE SAME ISSUES. IN 2005-0 6 & 2006-07 THE DEPARTMENT HAS NOT GONE INTO APPEAL IN THOSE MATTER S. THUS, THE DEPARTMENT ALREADY ACCEPTED THE INTEREST ELEMENT AT ASSESSMENT PROCEEDINGS FOR EARLIER YEARS. AS REGARDS ROYALTY THERE WAS NO ERROR POINTED OUT BY THE CIT AS ALL THE DOCUMENTS WHICH W ERE DULY VERIFIED BY THE ASSESSING OFFICER AT THE TIME OF AS SESSMENT PROCEEDINGS. THUS, THE LD. AR HAS RIGHTLY POINTED O UT THAT THE 4 ITA NO. 534/DEL/2011 DEPARTMENT CANNOT TAKE NEW STAND FROM ITS EARLIER D ECISIONS. IT IS PERTINENT TO NOTE THAT THE ORDER U/S 263 IS MERELY A SECOND OPINION WHICH IS NOT PERMISSIBLE UNDER THE ACT. 7. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH NOVEM BER, 2017 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 07/11/2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 11/10/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 11/10/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY JM/AM 5 ITA NO. 534/DEL/2011 SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 7.11.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 7 .1 1 .2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.