Uttarakhand Hospitality Ltd., New Delhi V. ITO, New Delhi

ITA 5416/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91146 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 04-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Assessee Lawyers: V RAJ KUMAR
• Keywords: Opportunity of being heard; Additional evidence; Revised return
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H: NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.5416/DEL./2012 (ASSESSMENT YEAR: 2009-10) M/S. UTTARAKHAND HOSPITALITY LTD., VS. ITO, WARD 1 8 (2), B 4/3183, VASANT KUNJ, NEW DELHI. NEW DELHI 110 070. (PAN: AAACU0434F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADVOCATE AND SHRI V. RAJ KUMAR, ADVOCATE REVENUE BY : SHRI P. DAM KANUNJNA, SENIOR DR DATE OF HEARING : 04.06.2015 DATE OF PRONOUNCEMENT : 12.06.2015 O R D E R PER GEORGE GEORGE K., JM : THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-X XI, NEW DELHI DATED 23.08.2012. THE RELEVANT ASSESSMENT YEAR IS 2009-10 . 2. THE ASSESSEE COMPANY IS IN HOSPITALITY INDUSTRY. IN THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE COMPANY WAS OPERATING THREE HOTELS, NAMELY, HOTEL GANGA KINARE, HOTEL GANGA VIEW AND HOTEL ASHO KA CONTINENTAL. IT WAS ALSO OPERATING UTTRAKHAND INSTITUTE OF HOSPITAL ITY SERVICES AND ITA NO.5416/DEL./2012 2 UNDERTAKING ADVENTURE ACTIVITIES LIKE RAFTING, MASS AGE SALE, TRACING AND SAFARI. 3. THE ASSESSEE COMPANY HAD E-FILED ITS RETURN OF I NCOME ON 30.09.2009 DECLARING ITS INCOME AT RS.36,563/-. T HE RETURN WAS PROCESSED U/S 143(1) ON 30.10.2010. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143(2) WAS ISSUED ON 24.09.2010. SU BSEQUENTLY, THE ASSESSEE FILED A REVISED RETURN ON 18.03.2011, DECL ARING A TOTAL INCOME OF RS.98,100/- AS THERE WERE SOME ERRORS ON RECEIPT O F INTIMATION U/S 143(1). THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON A TOTAL INCOME OF RS.6,60,414/- ON 30.12.2011 BY MAK ING THE FOLLOWING ADDITIONS: (I) DISALLOWANCE OUT OF SUNDRY CREDITORS BALANCE R S.3,48,305/- (II) DISALLOWANCE OF BONUS PAYABLE RS. 60,910/ - (III) DISALLOWANCE OF ESIC/PF PAYABLE RS. 5, 081/- (IV) DISALLOWANCE LUXURY TAX PAYABLE RS. 73,021 /- (V) DISALLOWACNE S.T. PENALTY RS. 9,203/- (VI) DISALLOWANCE OUT OF ADVERTISING & PUBLICITY EXPENSES RS. 65,794/- 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL TO T HE FIRST APPELLATE AUTHORITY WHO, VIDE ORDER DATED 23.08.2012, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY CONFIRMING/REDUCING THE ADDITIONS A S UNDER: SL.NO. PARTICULARS OF DISALLOWANCE ADDITION MADE BY ASSESSING OFFICER ADDITION(S) CONFIRMED BY THE CIT (A) 1. DISALLOWANCE OUT OF SUNDRY CREDITORS BALANCE RS.3,48,305/- RS.18,050/- ITA NO.5416/DEL./2012 3 2. DISALLOWANCE OF BONUS PAYABLE RS.60,910/- RS.60,910/- 3. DISALLOWANCE OF ESIC/PF PAYABLE RS.5,081/- RS.5,081/- 4. DISALLOWANCE LUXURY TAX PAYABLE RS.73,021/- RS.73,201/- 5. DISALLOWANCE OUT OF ADVERTISING & PUBLICITY EXPENSES RS.65,794/- RS.59794/- 5. AGAINST THE ORDER OF THE CIT (A), THE ASSESSEE I S IN APPEAL BEFORE US. 6. THE FIRST GROUND IS AGAINST THE CONFIRMING OF R S.18,050/- ON ACCOUNT OF OUTSTANDING BALANCE OF SUNDRY CREDITORS. 7. THE ASSESSING OFFICER DIRECTED THE ASSESSEE TO F ILE SUNDRY CREDITORS CONFIRMATIONS AGAINST WHOM THE BALANCE OF MORE THAN RS.1 LAKH WAS OUTSTANDING AS ON 31.03.2009. THE ASSESSING OFFICE R NOTICED THAT NO CONFIRMATION LETTERS OF SUNDRY CREDITORS OR ANY SU PPORTING DOCUMENTS IN RESPECT OF THE FOLLOWING CONCERNS WERE FILED :- (I) ANIL CATERING (ANIL DAIRY & SWEETS) RS.1,26,438/- (II) UTTAM FOOD RS. 1,12,145/- (III) UTTAM KWALITY SWEETS RS.1,09,722/- RS.3,48,305/- THE ASSESSING OFFICER OBSERVED THAT THE DETAILS OF SUNDRY CREDITORS WERE FILED VERY LATE I.E. ON 22.12.2011 WHEN ONLY 7 WOR KING DAYS WERE LEFT BEFORE THE DATE OF LIMITATION EVEN THOUGH THE AR OF THE ASSESSEE HAD ATTENDED THE HEARING EARLIER ON SEVERAL OCCASIONS. HE HAD, FURTHER, OBSERVED THAT THIS WAS DONE DELIBERATELY TO AVOID A NY VERIFICATION AT THE ITA NO.5416/DEL./2012 4 END OF THE ASSESSING OFFICER. HOWEVER, THE ASSESSI NG OFFICER WRITTEN LETTERS U/S 133(6) TO THE ABOVE NAMED SUNDRY CREDIT ORS, BUT, TILL THE DATE OF PASSING OF THE ASSESSMENT ORDER, NO REPLY WAS RECEI VED FROM ANY OF THEM AND NO BILLS, VOUCHERS OR CONFIRMATIONS OR ANY SUPP ORTING DOCUMENT WITH REGARD TO THE ABOVE MENTIONED SUNDRY CREDITORS BAL ANCES WERE FILED. THEREFORE, THE ASSESSING OFFICER HELD THAT THE SUND RY CREDITORS BALANCE OF RS.3,48,305/- HAD REMAINED UNVERIFIED AND, ACCORDIN GLY, MADE THE ADDITION. THE LD. CIT (A) REDUCED THE ADDITION TO RS.18,050/- BY OBSERVING AS UNDER : 5.1 I HAVE GONE THROUGH THE COPY OF BILLS SUBMITTE D ALONGWITH APPLICATION UNDER RULE 46A AND BILL DATED 12.12.2008 APPEARING AT PAGE 9 AMOUNTING TO RS.18,0 50/- IN THE NAME OF UTTAM FOODS. IN MY CONSIDERED OPINIO N AO SHOULD HAVE ADDED THIS AMOUNT ONLY AND NOT THE ENTI RE OUTSTANDING BALANCE. FURTHERMORE, AO SHOULD HAVE AS KED THE BANK STATEMENT SO AS TO ARRIVE AT THE CONCLUSIO N AND BY ADDING THE ENTIRE OUTSTANDING BALANCE, IT APPEARS T O BE A VERY HASTY DECISION. FURTHERMORE, IT HAS BEEN EXPLA INED THAT UTTARAKHAND HOSPITALITY LTD IS HAVING THREE UN ITS NAMELY, HOTEL GANGA KINARE, HOTEL GANGA VIEW RISHIKESH,AND HOTEL ASHOKA CONTINENTAL AT MUSSORIE AND AFTER BILLS ARE ISSUED THESE UNITS, CONFIRMATIONS C ANNOT BE GIVEN IN THE NAME OF UTTARAKHAND HOSPITALITY LTD. S O IT APPEARS THAT AO HAS NOT MADE PROPER ENQUIRY IN THIS REGARD AND FOR MAKING ADDITION SHE HAS JUMPED INTO THE CONCLUSION. AS ADDITIONAL EVIDENCE HAS ALREADY BEEN ADMITTED. AFTER PERUSING THE SAME, I AM OF THE CONS IDERED VIEW THAT OUT OF RS.3,48,305/- AN AMOUNT OF RS.18,0 50/- DESERVES TO BE CONFIRMED AND BALANCE IS TO BE DELET ED. THEREFORE, OUT OF ADDITION OF RS.3,48,305/-, APPELL ANT GETS RELIEF OF RS.3,30,255/- (RS.348,305 - 18050). GROUN D NO.1 IS PARTLY ALLOWED. ITA NO.5416/DEL./2012 5 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE THE CIT (A), THE ASSESSEE HAD FIL ED ADDITIONAL EVIDENCE UNDER RULE 46A, WHICH WAS FORWARDED TO THE AO FOR A REMAND REPORT. THE AO, IN COMPLIANCE, SUBMITTED HER REPORT VIDE LETTER DATED 02.07.2012. THE ASSESSE FILED REJOINDER TO THE REMAND REPORT ON 07. 08.2012. AS REGARDS ADDITION ON ACCOUNT OF BALANCE OUTSTANDING IN THE NAME OF SUNDRY CREDITORS, THE CIT (A) CATEGORICALLY FOUND THAT OUT OF 120 BILLS, ONLY ONE BILL DATED 12.12.2008, AMOUNTING TO RS.18,050/- IN THE NAME OF UTTAM FOODS, COULD NOT BE TALLIED. SINCE THIS AMOUNT OF RS.18,050/- COULD NOT BE TALLIED, THE CIT (A) WAS JUSTIFIED IN CONFIRMING TH E ADDITION TO THE EXTENT OF RS.18,050/- OUT OF RS.3,48,305/- MADE BY THE AO. I T IS ORDERED ACCORDINGLY. 9. GROUND NOS.2 TO 4 TAKEN BY THE ASSESSEE READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN CONFIRMING THE FOLLOWI NG ADDITIONS MADE BY THE ASSESSING OFFICER: (I) RS.60,910/- ON ACCOUNT OF BONUS PAYABLE; (II) RS.5,081/- ON ACCOUNT OF ESIC/PF PAYABLE; (III) RS.73,021/- ON ACCOUNT OF LUXURY TAX PAYABLE. 10. THE LD. CIT (A) CONFIRMED THE AFORESAID THREE A DDITIONS MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: 6. GROUND NO.2 & 3 RELATES TO DISALLOWANCE OF RS.60,910/- AS BONUS PAYABLE AND RS.5,081/- AS ESIC /PF PAYABLE. SINCE THE APPELLANT FAILED TO FILE ANY DET AILS WITH REGARD TO THESE ADDITIONS/DISALLOWANCE, GROUND NO.2 & 3 ARE DISMISSED. ITA NO.5416/DEL./2012 6 6. GROUND NO.4 IS AGAINST DISALLOWANCE OF LUXURY TA X PAYABLE AMOUNTING TO RS.73,021/-. IN THE SUBMISSION DATED 7.8.2012, IN PARA 6.1.2 IT HAS BEEN CONTENDED AS UN DER: 'ALTHOUGH THE ASSESSEE HAS NOT BEEN ABLE TO FIND TH E CHALLANS ON ACCOUNT OF RENOVATION IN THE HOTEL, BUT THE PAYMENT IS CLEARLY REFLECTED IN THE BANK STATEMENT, AND THE SAME HAS NOT BEEN DENIED BY THE LD.AO ALSO. IT CONFIRMS THE FACT THAT THE LUXURY TAX HAS BEEN PAID BEFORE FILING THE INCOME TAX RETURN. THIS HAS BEEN REPEATEDLY CLARIFIED TOO THE LD.AO, BUT THE LD.AO ALWAYS INSISTED FOR ORIGINAL CHALLAN.' 6.1 FROM THE REPLY ITSELF IT APPEARS THAT LD. AR OF THE APPELLANT HAS NOT BEEN ABLE TO SHOW THE ORIGINAL CH ALLAN BEFORE THE AO. IN THIS REGARD DURING THE COURSE OF APPELLATE PROCEEDINGS STATEMENT FOR THE PERIOD OF 1.4.2009 TO 31.3.2010 HAS BEEN PRODUCED SHOWING THE PAYMENT OF RS.1,08,410/-. THIS STATEMENT PERTAINS TO FINANCIAL YEAR 2009-10 RELATING TO ASSESSMENT YEAR 2010-11, NOT TO ASSESSMENT YEAR 2009-10, WHICH IS BEFORE ME FOR ADJUDICATION. SO, THIS IS A FINDING OF THE FACT EVE N DURING THE COURSE OF APPELLATE PROCEEDINGS LD. AR OF THE APPEL LANT HAS FAILED TO ESTABLISH THE CLAIM OF LUXURY TAX AMOUNTI NG TO RS.73,021/-. SO, DISALLOWANCE MADE BY AO IN THIS RE GARD IS SUSTAINED. GROUND NO.4 OF THE APPELLANT IS DISMISSE D. 11. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE AND P ERUSED THE MATERIAL ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT ALL THESE THREE ADDITIONS DO NOT PERTAIN TO THE RELEVANT ASSESSMENT YEAR AND THE SAME IS OUTSTANDING FROM PERIOD EARLIER THAN THE YEAR UNDER REVIEW. LD. COUNSEL ALSO SUBMITTED THAT THE LUXURY TAX FOR THE MONTH OF MARCH 2009 WAS DEPOSITED ON 06.04.2009 AND THE CHALLAN FOR THE SAM E WAS FILED AS ADDITIONAL EVIDENCE THROUGH APPLICATION U/S 46A. I N VIEW OF THE ABOVE, WE ITA NO.5416/DEL./2012 7 ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE AND EQUITY, THESE THREE ADDITIONS BE RESTORED TO THE FILE OF ASSESSING OFFI CER FOR DECIDING AFRESH AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. IT IS ORDERED ACCORDINGLY. IN SUBSTANCE, THESE GROUNDS [GROUND N OS.2 TO 4] ARE ALLOWED FOR STATISTICAL PURPOSES. 12. GROUND NO.5 IS AGAINST THE ADDITION OF RS.59,79 4/- ON ACCOUNT OF EXPENSES INCURRED ON ADVERTISEMENT AND PUBLICITY. 13. THE ASSESSING OFFICER DISALLOWED THE ADVERTISE MENT AND PUBLICITY EXPENSES TO THE TUNE OF RS.65,794/-. THE LD. CIT (A) HAS CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS.59,794/- BY OBSERV ING AS UNDER : 7. GROUND NO.5 PERTAINS DISALLOWANCE OF RS.65,794/ - ON ACCOUNT OF ADVERTISEMENT AND PUBLICITY EXPENSES. IN THIS REGARD, VIDE REPLY FILED ON 7.8.2012, LD.AR OF THE APPELLANT VIDE PARA 7.1.1 CONTENDED AS UNDER:- 'IN CASE OF DAINIK JAGRAN, IT IS SUBMITTED THAT THE LD.AO HAS FAILED TO APPRECIATE THAT THE BILL COULD NOT BE VERIFIED FROM THE CREDITOR, AS THE SAME WAS ISSUED IN THE NAME OF THE ASSESSEE'S UNIT HOTEL GANGA VIEW, AND N OT IN THE NAME OF THE ASSESSEE'S NAME I.E. UTTRAKHAND HOSPITALITY LIMITED, FOR WHICH THE LD.AO HAD SENT L ETTERS TO THE CREDITOR. DURING THE COURSE OF PROCEEDINGS, IT WAS EXPLAINED SEVERAL TIMES TO THE LD.AO, THAT THE ASSE SSEE OPERATES THREE HOTELS NAMELY HOTEL GANGA KINARE, HO TEL GANGA VIEW AND HOTEL ASHOKA CONTINENTAL, AND ALL TH E EXTERNAL PARTIES BASED GENERALLY KNOW THE NAME OF T HE UNIT AND NOT THE OPERATING COMPANY. BUT THE LD.AO FAILED TO UNDERSTAND AND APPRECIATE THE SAME. 7.1 IT APPEARS THAT BILLS COULD NOT BE VERIFIED BEC AUSE IT WAS ISSUED IN THE NAME OF ASSESSEE'S UNIT HOTEL GAN GA VIEW. ASSESSING OFFICER IS DIRECTED TO GIVE CREDIT OF PAYMENT MADE BY THE UNIT TO THE APPELLANT. WITH REG ARD TO ITA NO.5416/DEL./2012 8 OTHER PAYMENTS OF RS.17,500/- IN THE NAME OF FHRAI, RS 25,000/- IN THE NAME OF SUNIL NEGI & ANIL SHASTRI, RS.12,294/- & RS.5,000/- IN THE NAME OF A V ADVERTI SERS HAVE NOT BEEN EXPLAINED. SO IN MY CONSIDERED OPINIO N, RELIEF TO THE EXTENT OF RS.6,000/- CAN BE GRANTED. THE REMAINING AMOUNT OF RS.59,794/- IS CONFIRMED. GROU ND NO.5 IS PARTLY ALLOWED. 14. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE AND P ERUSED THE MATERIAL ON RECORD. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BILLS COULD NOT BE SUBMITTED DURING THE ASSESSMENT PROCEEDINGS DUE TO PAUCITY OF TIME, BUT, THE SAME WERE SUBMITTED BEFORE THE CIT (A). AS WE HAVE ALREADY RESTORED THE EARLIER THREE ADDITIONS TO THE FILE OF THE ASSE SSING OFFICER, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE AND EQUITY, TH IS ISSUE ALSO BE RESTORED TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH A FTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS ORDERED ACCORDINGLY. IN ESSENCE, GROUND NO.5 IS ALLOWED FOR STATISTICAL PUR POSES. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 12 TH DAY OF JUNE, 2015. SD/- SD/- (N.K. SAINI) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 12 TH DAY OF JUNE, 2015 TS ITA NO.5416/DEL./2012 9 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.