M/s. Overseas Logistics Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 534/DEL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3645 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 31-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO.534/DEL OF 2017 ASSESSMENT YEAR: 2013-14 M/S OVERSEAS LOGISTICS P.LTD., VS DCIT, CIRCLE 19(1 ), C/O KAPIL GOEL, ADVOCATE, NEW DELHI. F-26/124, SECTOR 7, ROHINI, NEW DELHI. PAN: AABFO2548J (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI KAPIL GOEL, ADVOCATE DEPARTMENT BY: MS RINKU SINGH, SR.DR DATE OF HEARING: 19.08.2019 DATE OF PRONOUNCEMENT: 13.11.2019 ORDER PER NARASIMHA K. CHARY, JM THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28.10.2016 PASSED BY THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS)-12, NEW DELHI (CIT(A)) FOR THE ASST T. YEAR 2013-14. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF LOGISTICS. FOR THE ASSES SMENT YEAR 2013- 14, THEY HAVE FILED THEIR RETURN OF INCOME ON 30.09 .2013 DECLARING AN INCOME OF RS.60,54,440/-. DURING THE ASSESSMENT PROCEEDINGS, LEARNED ASSESSING OFFICER FOUND THAT THE ASSESSEE M ENTIONED THAT 2 THE TURNOVER AS PER THE P&L ACCOUNT WAS RS.38,65,3 5,145/-WHEREAS AS PER AIR INFORMATION, SERVICE TAX, THE TURNOVER W AS OF RS.39,17,48,317/-, RESULTING IN SHORT TURNOVER OF R S.52,13,229/-AS PER THE PROFIT AND LOSS ACCOUNT. ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE LAST SERVICE TAX RETURN WAS FILED ON 31 ST AUGUST, 2013 AND THE AUDITED ANNUAL ACCOUNTS WERE S IGNED BY THE THEN AUDITORS OF THE COMPANY ON 4 TH SEPTEMBER,2013 AND, THEREFORE, THE DIFFERENCE IN THE TURNOVER WAS CORRE CTLY MENTIONED IN THE AUDITED ACCOUNTS BY THE AUDITORS AFTER VERIFYIN G ALL THE DETAILS AND THE RECONCILIATION BETWEEN THE TURNOVER MENTION ED AS PER THE SERVICE TAX AND P&L ACCOUNT WAS ATTACHED. IT WAS FU RTHER STATED BY THE ASSESSEE THAT THE ABOVE REFERENCE DIFFERENCE WA S ATTRIBUTED TO THE FACTS THAT THE CREDIT NOTES ISSUED AGAINST THE DEDUCTIONS AND BILLS ON ACCOUNT OF INCORRECT BILLING DUE TO RELATE D DIFFERENCE, WEIGHT DIFFERENCE ETC. AMOUNTING TO RS.22,88,922/-WAS NOT DEDUCTED FROM THE TURNOVER AS PER SERVICE TAX DETAILS, WHICH RESU LTED IN EXCESSIVE TURNOVER AS PER THE SERVICE TAX AS COMPARED TO THE TURNOVER REPORTED IN THE AUDITED ANNUAL ACCOUNTS FOR THE SAM E PERIOD. 3. LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSE SSEE HAD NOT GIVEN ANY REASON WHY THE SERVICE TAX RETURN WAS NOT REVISED AND MORE SO SINCE AUDITED ACCOUNTS WERE SIGNED AFTER FI LING THE SERVICE TAX RETURN, HE FURTHER OBSERVED THAT, AS REGARDS TH E REASON FOR A DIFFERENCE OF RS.22,88,922/-FURNISHED BY THE ASSESS EE, THE ASSESSEE HAS NOT GIVEN ANY REASON FOR NOT REVISING THE SERVI CE TAX RETURN AFTER 3 FINALISATION OF THE AUDIT EVEN IF MISTAKE WAS NOTED BY THE ASSESSEE. ON THIS GROUND, LEARNED ASSESSING OFFICER DID NOT A CCEPTED THE EXPLANATION OF THE ASSESSEE AND PROCEEDED TO ADD TH E DIFFERENCE AMOUNT OF RS.52,13,229/-TO THE INCOME OF THE ASSESS EE. 4. IN THE APPEAL PREFERRED BY THE ASSESSEE, LD. CIT (A) OBSERVED THAT THE CLAIM OF THE ASSESSEE THAT THE AMOUNT OF R S. 29.24 LACS WAS MENTIONED BY OVERSIGHT IN THE SERVICE-TAX RETURN, H AD NO BASIS INASMUCH AS THE TAX AUDIT WAS COMPLETE ON 4.9.2016 AND THE ASSESSEE HAD FILED THE SERVICE-TAX RETURN ON 31.08. 2013 AND, THEREFORE, THE ASSESSEE WAS VERY MUCH AWARE OF THE TURNOVER IN THE SERVICE-TAX RETURN AND IF THERE WAS ANY MISTAKE, TH E ASSESSEE COULD HAVE REVISED THE SERVICE-TAX RETURN SINCE THE PERIO D OF THREE MONTHS WAS AVAILABLE TO THE ASSESSEE TO REVISE THE RETURN. ON THIS PREMISE, LD. CIT(A) REJECTED THE PLEA OF THE ASSESSEE. 5. THERE IS A DELAY OF ONE-DAY IN PRESENTING THE AP PEAL AND WHILE ARGUING THAT THE LIMITATION BEGINS ON THE 2 ND DECEMBER, 2016 AND, THEREFORE, THE APPEAL FILED ON 31 ST JANUARY, 2017 IS WELL WITHIN LIMITATION, IN THE ALTERNATIVE ASSESSEE PLEADED THA T IT IS ONLY UNDER THE BONA FIDES BELIEF ABOUT THE OPERATION OF LIMITA TION, THERE OCCURRED SUCH A MISTAKE AND SINCE THERE IS NO INTEN TIONAL DELAY THE SAME MAY BE CONDONED. ON A CONSIDERATION OF THE MAT TER, WE ARE OF THE OPINION THAT ONE-DAY DELAY IN PRESENTING THE AP PEAL THAT TOO BONAFIDE UNDER THE MISTAKEN IMPRESSION ABOUT THE LA W OF LIMITATION, SHALL NOT RESULT IN THROWING THE APPEAL AT THE THRE SHOLD INSTEAD OF 4 TESTING THE CASE ON MERITS. WE, THEREFORE, CONDONE THE DELAY AND TO PROCEED TO HEAR THE MATTER. 6. IT IS THE SUBMISSION ON BEHALF OF THE ASSESSEE T HAT THE ADDITION OF RS.52,13,229/-IS THE RESULT OF THE DIFF ERENCE BETWEEN THE TURNOVER BETWEEN THE SERVICE-TAX RETURN AND AUDITED ACCOUNTS WHICH STANDS RECONCILED BY THE ASSESSEE. HE SUBMITT ED THAT MERE RETURN FILED WITH SERVICE-TAX AUTHORITIES BY ITSELF DOES NOT CONSTITUTE A GROUND TO INFER ANY UNACCOUNTED RECEIPTS, THAT TO O IN THE ABSENCE OF ANY DOUBT AS TO THE CORRECTNESS OF BOOKS OF ACCO UNTS MAINTAINED BY THE ASSESSEE. ACCORDING TO THE LD. AR, ALL THE C ONFIRMATIONS ARE TRULY FILED BY THE ASSESSEE, BUT NO INQUIRY FROM AN Y PARTY WAS MADE BY THE LEARNED ASSESSING OFFICER OR BY THE LD. CIT( A) AND THE AUTHORITIES DID NOT POINT OUT ANY TRADING OUTSIDE T HE BOOKS OF ACCOUNTS. HE, THEREFORE, PRAYED THAT THE AUTHORITIE S MAY BE DIRECTED TO LOOK INTO THE BOOKS OF ACCOUNTS MAINTAINED BY TH E ASSESSEE AND THE RECONCILIATION FURNISHED BY THEM. 7. PER CONTRA, IT IS THE SUBMISSION OF THE LD. DR T HAT AS RIGHTLY POINTED OUT BY THE LD. CIT(A), THE TAX AUDIT OF THE ASSESSEE WAS COMPLETE ON 4.9.2016 WHEREAS THE ASSESSEE FILED THE SERVICE-TAX RETURN ON 31.08.2013 AND EVEN AFTER KNOWING THE DEF ECT IN THE SERVICE-TAX RETURN, THE ASSESSEE DID NOT TAKE ANY S TEPS FOR RECTIFICATION OR FILING OF THE REVISED RETURN AND, THEREFORE, THE PLEA TAKEN BY THE ASSESSEE IS NOT ACCEPTABLE. 5 8. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. AT THE OUTSET, IT IS AN ADMITTED FACT THAT THERE IS A DIFFERENCE BETWEEN THE TURNOVE R SHOWN IN THE SERVICE-TAX RETURN AND THE TURNOVER DISCLOSED IN TH E BOOKS OF ACCOUNTS. THE TURNOVER IN THE SERVICE-TAX RETURN IS SHOWN ON THE BASIS OF THE SERVICES PROVIDED BY THE ASSESSEE FOR WHICH THEY HAVE BEEN PAID; WHEREAS THE TURNOVER IN THE BOOKS OF ACC OUNTS IS SHOWN ON THE BASIS OF INCOME ACCRUED. THERE IS, THEREFORE , DIFFERENCE OF SYSTEM OF RECORDING TURNOVER IN THE SERVICE-TAX RET URN AS WELL AS IN THE BOOKS OF ACCOUNTS. THIS COULD BE THE FIRST TRIG GER POINT OF MAKING FURTHER INVESTIGATION, BUT MERELY ON THIS BASIS, AD DITION CANNOT BE MADE. TURNOVER SHOWN IN THE SERVICE-TAX COULD ALSO BE THE ADVANCE RECEIVED FROM THE CUSTOMERS WHICH CANNOT BE THE INC OME OF THE ASSESSEE AS PER ITS BOOKS OF ACCOUNTS AS IT IS NOT ACCRUED. SIMILARLY, INCOME MIGHT HAVE BEEN ACCRUED TO THE ASSESSEE BUT IT MAY BE EXEMPT UNDER THE SERVICE-TAX.FURTHER, THE ASSESSEE HAD SHOWN THAT CREDIT NOTE WAS RECEIVED BY THE ASSESSEE, HOWEVER, THAT WAS NOT INCLUDED IN THE SERVICE-TAX RETURN. 9. IN VIEW OF THE ABOVE FACTS, THE WHOLE ISSUE IS S ET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO T HE ASSESSEE TO RECONCILE THE INCOME AND SHOW THE YEAR IN WHICH THE SAME WAS SHOWN AS INCOME, WITH RESPECT TO THE INCOME SHOWN I N THE SERVICE- TAX RETURN. AO MAY VERIFY THE SAME AND IF FOUND ANY ERROR, THE ADDITION MAY BE DELETED. 6 10. WITH THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER AND REMAND THE ISSUE TO THE FILE OF THE ASSES SING OFFICER WITH A DIRECTION TO THE ASSESSEE TO RECONCILE THE INCOME AND SHOW THAT IN WHICH YEAR THE SAME WAS SHOWN AS INCOME WITH RESPEC T TO THE INCOME SHOWN IN THE SERVICE TAX RETURN, AND THE ASS ESSING OFFICER AFTER VERIFICATION OF THE SAME, IF FINDS ANY ERROR, MAY DELETE THE ADDITION. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2019. SD/- SD/- (PRASHANT MAHARISHI) (K.NARASIMHA C HARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH NOVEMBER, 2019. VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 7 DRAFT DICTATED ON 7.11.2019 DRAFT PLACED BEFORE AUTHOR 8.11.2019 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON DATE OF UPLOADING ORDER ON THE WEBSITE FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.