Jindal Telecom, New Delhi V. ITO, Ward-38(3), New Delhi

ITA 5560/DEL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6775 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 28-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Section: 69C; 143(3); 133(6); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 5560 / DEL/ 2018 ASSESSMENT YEAR:2015-16 JINDAL TELECOM, DELHI, G1, G2 AND G6, GROUND FLOOR, VARDMAN PLAZA, SECTOR-8, ROHINI, DELHI-110085 ASSESSMENT YEAR: 2015- 16 ITO, WARD - 3 8( 3 ) DELHI TAN/PAN: AAKFJ0510A (APP ELL ANT) (RESPONDENT) A PP ELL ANT BY: SH. R.R. SINGLA, ADVOCATE RESPONDENT BY: SH. SURENDER PAL, SR. DR DATE OF HEARING: 2 4 09 2018 DATE OF PRONOUNCEMENT: 21 12 201 8 O R D E R AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 26.6.2018 PASSED B Y LD. CIT(A)-13, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) FOR THE ASSESSMENT YEAR 2015-1 6. IN THE GROUNDS OF APPEAL THE ASSESSEE HAS CHALLENGED THE A DDITION OF RS. 10,53,030/- ON ACCOUNT OF DIFFERENCE IN ACCOUNT WITH M/S SONY INDIA PVT. LTD.,. 2. FACTS IN BRIEF QUA THE ISSUE INVOLVED ARE THAT, THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSIN ESS OF TRADING OF MOBILE PHONES. DURING THE COURSE OF ASSE SSMENT ITA NO. 5560/DEL/2018 2 PROCEEDINGS CERTIFIED COPY OF ACCOUNT FROM M/S SONY INDIA PRIVATE LTD., WAS OBTAINED BY THE AO UNDER SECTION 133(6) AND FROM THE PERUSAL OF THE SAME, IT WAS FOUND THAT THE RE WAS A DIFFERENCE OF RS. 53,13,612/- IN THE PURCHASE VALUE OF CLAIMED BY THE ASSESSEE AND AS SUBMITTED BY SONY INDIA PRIV ATE LTD.,. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE HAD SUBMITTED AS UNDER:- IT WAS REPLIED BY THE ASSESSEE ON 04-10-2017 THAT PURCHASES ARE BOOKED BY THE ASSESSEE FIRM NET OF DI SCOUNTS RECEIVED FROM SONY INDIA (P) LTD.. THERE ARE THREE TYPES OF DISCOUNTS, WHICH ARE RECEIVED BY THE ASSESSEE FIRM. ONE IS RECEIVED AT THE TIME OF BILLING ITSELF SECOND BY WA Y OF CREDIT NOTES AND THIRD BY WAY OF CASH DISCOUNTS. ALL THESE ITEMS HAVE BEEN REDUCED FROM THE AMOUNT OF PURCHASES BY T HE ASSESSEE FIRM, WHEREAS SONY INDIA PVT. LTD. HAS ENT ERED ALL TRANSACTIONS SEPARATELY I.E. SALES ARE BOOKED SEPAR ATE AND DISCOUNTS ARE BOOKED SEPARATE. WE PROVIDE YOU COPY OF ACCOUNT OF SONY INDIA PVT. LTD. IN OUR BOOKS OF ACC OUNTS AND REQUEST YOUR GOODSELF TO PROVIDE US WITH COPY OF AC COUNT AND DETAILS RECEIVED BY YOUR GOODSELF. THE SAME CAN BE GO RECONCILED IN FULL TO YOUR SATISFACTION. AS EXPLAINED ABOVE, CASH DISCOUNT RECEIVED FROM SON Y INDIA PVT. LTD. HAS BEEN REDUCED FROM THE AMOUNT OF COST OF PURCHASE BY THE ASSESSEE FIRM. THE SAME IS EXPLAINA BLE PROVIDED DETAILS OF INFORMATION RECEIVED BY YOUR GO ODSELF ARE PROVIDED TO US FOR RECONCILIATION. 3. AFTER RECONCILIATION, THE AO FOUND THAT THERE WA S A DIFFERENCE OF RS. 12,375.68/- WHICH WAS NOT FOUND T O BE RECONCILABLE AS PER ASSESSEE AND SAME WAS ADDED. HO WEVER, IN SO FAR AS THE ACCOUNT FOR DISCOUNT OF RS. 13,35, 979.25/-, AO NOTED THAT THE ACCOUNT OF DISCOUNT TALLIED WITH THE STATEMENT RECEIVED FROM SONY INDIA PVT. LTD., IS RS . ITA NO. 5560/DEL/2018 3 2,95,329.80/- AND ACCORDINGLY THE DIFFERENCE OF RS. 10,42,465/- WAS ADDED. 4. BEFORE THE CIT(A), THE ASSESSEE FILED COPY OF RECONCILIATION STATEMENTS AND POINTED OUT THAT THER E WAS A DISCOUNT OF RS. 13,35,979/- WHICH WAS A ACCOUNT OF TRADE DISCOUNT OF RS. 10,71,788.34/- AND CASH DISCOUNT OF RS. 2,64,190.91/-. THE ENTRY OF TRADE DISCOUNT REFLECTE D IN CREDIT SIDE AS PER THE STATEMENT RECEIVED FROM SONY INDIA PRIVATE LTD., AND ALSO THE CASH DISCOUNT. THE FIGURE OF ENT RIES AS NOTED BY THE CIT(A) IS NOTED IN THE IMPUGNED ORDER AT PAGES NO. 4 AND 5. THE ASSESSEE HAS ALSO GIVEN THE RECONC ILIATION ACCOUNT OF SONY INDIA PRIVATE LTD., AND POINTED OUT THAT THE TOTAL CREDIT SIDE WAS RS. 1,80,73,740.064/- OUT OF WHICH THERE WERE CERTAIN REVERSAL ENTRY ALSO. THE LEARNED CIT(A ) NOTED THAT THOUGH THE FIGURES ARE TALLIED WITH THE ACCOUNT GIV EN BY THE ASSESSEE AND THE ACCOUNT GIVEN BY THE SONY INDIA PR IVATE LTD.,, HOWEVER HE HELD THAT THERE IS AN UN-RECONCIL E CREDIT ENTRY OF RS. 9,81,436/- DATED 13.5.2014 WHICH HAS B EEN CONFIRMED BY HIM. 5. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE MATERIAL REFERRED TO BEFORE US, I FIND THAT THE ENT IRE ADDITION HAS BEEN MADE ON THE GROUND THAT CERTAIN AMOUNT ON THE CREDIT SIDE REMAINED UN-RECONCILED AS PER THE ACCOU NTS SUBMITTED BY THE SONY INDIA PRIVATE LTD., AND AS SH OWN BY THE ASSESSEE IN ITS LEDGER ACCOUNT. THERE IS NO DIF FERENCE IN THE OPENING AND CLOSING BALANCES BUT WITH THE SUMMA TIONS OF ITA NO. 5560/DEL/2018 4 DEBIT AND CREDIT ENTRIES. IT HAS BEEN EXPLAINED BY THE LEARNED COUNSEL BEFORE US THAT THE SONY INDIA PRIVATE LTD., USE TO CREDIT ACCOUNT ON BILL TO BILL BASIS AND POINTED OU T THAT LD. CIT(A) HAS OVERLOOKED THE CIRCLED FIGURES IN THE SA ID STATEMENT HE HAS TAKEN ENTRIES OF RS. 18,563,82/- ON THE DEBI T SIDE WITH THE ENTRY OF SAME AMOUNT ON CREDIT SIDE TO BE CONTR A. BY DOING SO, HE OVERLOOKED AND WAS MISTAKEN BY ACCEPTI NG THE ENTRY OF RS. 2,22,139/- ON THE CREDIT SIDE AS TRUE WHEREAS THE ACTUAL PAYMENT AGAINST THIS WAS FOR RS. 2,03,576/- ONLY, WHICH IS EVIDENT FROM THE ENTRY DATED 16.05.2014 IN THE BANK STATEMENT. ACTUALLY SONY INDIA PVT. LTD. WAS CREDIT ING THE ACCOUNT ON BILL TO BILL BASIS AND FOR SHORTFALL IN PAYMENT MADE FOR RS. 2,03,576/- AGAINST THE TOTAL OF BILLS AMOUN TING RS. 2,22,139/- IT CREDITED THE BILLS IN FULL AND DEBITE D THE ACCOUNT BY DIFFERENCE OF RS. 18,563/-. THE COMPANY, SONY IN DIA PVT. LTD WAS ALREADY HAVING A CHEQUE OF RS. 10 LAKHS BY WHICH IT CREDITED THE ACCOUNT IN TWO PARTS, I.E., DIFFERENCE OF RS 18,563/- AND THE REST OF BILLS AMOUNTING RS. 9,81,4 36/-. ON RETURN OF CHEQUE, THE SINGLE ENTRY OF RS. 10,00,000 /- WAS DEBITED TO THE ACCOUNT OF THE ASSESSEE FIRM BY SAID COMPANY. THE LD. CIT (A) OVERLOOKED ALL THESE FACTS AND FIGU RES AND MADE HIS OWN PRESUMPTION OF THE ENTRIES WITHOUT ASC ERTAINING THE FACT AND REALITY FROM THE SAID SONY INDIA PRIVA TE LIMITED. HE PRESUMED THE SAID CREDIT ENTRY OF RS. 9,81,436/- IN THE BOOKS OF THE SAID COMPANY AS A PAYMENT MADE BY ASSE SSEE OUT OF BOOKS AND MADE ADDITIONS U/S 69C OF THE ACT. HE FURTHER MADE AN ADDITION OF RS. 18,564/- BEING DIFF ERENCE OF ITA NO. 5560/DEL/2018 5 DEBIT ENTRY OF RS. 10.00.000/- AND CREDIT ENTRY OF RS. 9,81,436/-. LD. C1T(A) CONFIRMED THE TOTAL ADDITION OF RS. 10,00,000/- AND WORKED THE RELIEF TO THE ASSESSEE A T RS. 40,650/- OUT OF ADDITIONS MADE BY THE LD. AO FOR RS . 10,53,025/- ON ACCOUNT OF THE ABOVE NON UNDERSTANDI NG OF ACCOUNTING ENTRIES, WHICH IS AGAIN A MISTAKE/NON AP PLICATION OF MIND. LD. COUNSEL HAS ALSO GIVEN THE DETAILS IN RESPECT OF BILL TO BILL ACCOUNTING WHICH IS AS UNDER:- DETAILS IN RESPECT OF BILL TO BILL ACCOUNTING S. N O. DATE OF CREDIT AMOUNT OF CREDIT CORRESPO NDING DATE OF DEBIT AMOUNT OF DEBIT DIFFERE NCE AMOUNT 1. 24.04.2014 1,67,490+ 3,031 22.04.2014 1,70,521 NIL 2. 26.04.2014 93,291+1, 689 25.04.2014 94,980 NIL 3. 30.04.2014 2,42,198+ 4,384 27.04.2014 10,495+2,36,087 NIL 4. 01.05.2014 3,47,355+ 6,381 29.04.2014 1,53,466+81,405 +32,562+86,323 NIL 5. 9.5.2014 2,67,881+ 4,849 07.05.2014 36,191+1,91,307 +45,232 NIL 6. 13.05.2014 2,22,139+ 4,021 11.05.2014 2,26,160 NIL* 7. 13.05.2014 9,81,436+ 17,967 18.04.2014 30.04.2014 10.05.2014 8,57,309 1,10,427(8 BILLS) 31,667 NIL* 6. THUS, HE EXPLAINED THAT THE PAYMENT OF RS. 2,2 2,139/- WAS SHORT BY RS. 18,564/- BECAUSE THE ACTUAL PAYMEN T WAS RS. 2,03,576/- AND THEREFORE, THERE WAS A CORRESPON DING DEBIT ENTRY OF RS. 18,564/-. SINCE THE PAYMENT OF RS. 9,8 1,436/- WAS EXCEEDING RS. 18,564/- HENCE A CORRESPONDING CR EDIT ITA NO. 5560/DEL/2018 6 ENTRY WAS MADE TO ACCOUNT FOR THE PAYMENT OF CHEQUE OF RS. 10,00,000/- GIVEN BY THE ASSESSEE TO SONY INDIA PRI VATE LTD. 7. AFTER CONSIDERING THE AFORESAID EXPLANATIO N OF THE LD. COUNSEL, WE FIND HIS CONTENTION TO BE CORRECT, AS T HE ACCOUNTS HAVE BEEN COMPLETELY MISCONSTRUED BY THE AUTHORITIE S BELOW. THE MANNER IN WHICH A THIRD PARTY MAINTAINS ITS ACC OUNT CANNOT BE THE BASIS FOR EITHER REJECTING THE ACCOUN TS OR DRAW ANY ADVERSE INFERENCE IN THE ACCOUNT OF THE ASSESSE E ESPECIALLY WHEN NO DEFECT HAS BEEN POINTED OUT EITH ER IN THE PURCHASE OR SALE SHOWN BY THE ASSESSEE FROM THE SAI D PARTY. THE ENTIRE DETAILS OF PURCHASES WERE PRODUCED BEFOR E THE AO ALONGWITH BOOKS OF ACCOUNTS ON WHICH NO DISCREPANCY HAS BEEN FOUND. THUS, SUCH ADDITION ON ACCOUNT OF DIFFE RENCE WHICH OTHERWISE STANDS RECONCILED CANNOT BE MADE. ACCORDINGLY, THE SAME IS DIRECTED TO BE DELETED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2018 . SD/ - [AMIT SHUKLA] JUDICIAL MEMBER DATED: 21 ST DEC, 2018 SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR ITA NO. 5560/DEL/2018 7 DATE 1. DRAFT DICTATED ON 21.12.2018 2. DRAFT PLACED BEFORE AUTHOR 21.12.2018 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS 8. UPLOADED ON 09.01.2019 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER.