DCIT, New Delhi V. M/s. Northern Strips Ltd., New Delhi

ITA 606/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91019 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 31-03-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ES: E , NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI CM GARG, JUDICIAL MEMBER ITA NO. 606 /DEL/201 3 AY: 200 4 - 05 DCIT, C.C. 13, ROOM NO.332 VS. NORTHERN STRIPS LTD. ARA CENTRE, JHANDEWALAN EXTN 1, CENTRAL MARKET NEW DELHI WEST AVENUE ROAD WEST PUNJABI BAGH NEW DELHI 110 026 PAN: AAACN 0642 C (APPELLANT) (RESPONDENT) A SSESSEE BY : SH. VED JAIN, C.A. MS.RANO JAIN, ADV. SH. VM CHOURASIYA, ADV. DEPT. BY : SH. GUNJAN PRASAD, CIT, D.R. ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(A), NEW DELHI DATED 16.11.2012 PERTAINING TO THE A SSESSMENT YEAR (A.Y.) 2004 - 05 ON THE FOLLOWING GROUNDS. 1. THE ORDER OF THE LD.CIT(A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.15,00,000/ - MADE BY AO U/S 68 OF THE I.T.ACT. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.30,000/ - OF COMMISSION @ 2% ON AMOUNT RECEIVED AS ACCOMMODATION ENTRY. 4. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,11,097/ - ON ACCOUNT OF CREDIT CARD EXPENSES MA D E BY AO. 5. THE APPELLANT CRAVES LEAVE TO AD D, AMEND ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. ITA 606/DEL/2013 AY: 2004 - 05 NORTHERN STRIPS LTD. 2 2. WE HAVE H EARD MR.GUNJAN PRASAD, LD.CIT(A), D.R. ON BEHALF OF THE REVENUE AND MR.VED JAIN, THE LD.COUNSEL FOR THE ASSESSEE. 3. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ON PERUSAL OF MATERIAL ON RECORD, ORDERS OF THE AUTHORITIES BELOW, CASE LAWS CITED, WE HOLD AS FOLLOWS. 5. GROUND NOS. 1 IS GENERAL IN NATURE. 6. O N GROUND NO. 2 , THE LD.CIT(APPEALS) HAS AT PAGE 24 PARA 4.2 HELD AS FOLLOWS. THE APPEAL HAS BEEN ALLOWED IN THE QUANTUM APPEAL. WITHOUT GOING INTO THE LEGALITY OR MERITS OF THE ADDITIONS IN THE PRESENT ASSESSMENT ORDER, SINCE THE APPEAL HAS BEEN ALLOWED IN THE QUANTUM APPEAL, IT CANNOT BE SUSTAINED IN THE PRESENT ASSESS MENT ORDER WHERE THE ADDITION IS CONSEQUENTIAL. IF THE REVENUE IS IN APPEAL AGAINST THE QUANTUM APPEAL ORDER AND FINALLY SUCCEEDS THERE, AUTOMATICALLY THE ASSESSMENT WILL BE SUSTAINED IN THIS ASSESSMENT ORDER. SECTION 153A, 153B AND 153C OF THE ACT PROVI DE FOR ABATEMENT OF THE ASSESSMENT PROCEEDINGS, NOT OF THE APPELLATE PROCEEDINGS. THIS GROUND OF APPEAL IS ALLOWED ACCORDINGLY. APPELLANT GETS RELIEF OF RS.15,30,000/ - . 6.2. WE FIND NO INFIRMITY IN THE SAME. THE AO HAD MADE THE VERY SAME ADDITION EAR LIER IN AN ORDER PASSED U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT). THIS ADDITION WAS DELETED BY THE FIRST APPELLATE AUTHORITY AND SUCH DELETION WAS CONFIRMED BY THE ITAT IN ITA NO.4388/DEL/2012 VIDE ORDER DT. 23.12.2013. CONSISTENT WITH THE VIEW TAKEN THEREIN WE DISPOSE OF THIS GROUND OF THE ASSESSEE. 7 . GROUND NO.3 IS AGAINST THE ADDITION OF AN AMOUNT OF RS.30,000/ - . THIS ADDITION IS CONSEQUENTIAL TO THE ADDITION MADE AGAINST WHICH GROUND NO.2 HAS BEEN RAISED BY THE REVENUE. CONSISTEN T WITH THE VIEW TAKEN BY US IN GROUND NO.2, WE DISMISS THIS GROUND NO.3 OF THE REVENUE. ITA 606/DEL/2013 AY: 2004 - 05 NORTHERN STRIPS LTD. 3 8 . ON GROUND NO.4 THE FIRST APPELLATE AUTHORITY AT PARA 5.2 PAGE 26 OF ITS ORDER HELD AS FOLLOWS. 5.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ASSE SSMENT ORDER. THE APPELLANT IS A COMPANY WHOSE ACCOUNTS ARE AUDITED AND THERE IS NO EVIDENCE TO CONCLUDE THAT THE EXPENSES INCURRED BY THE APPELLANT COMPANY ARE EITHER FICTITIOUS OR FALSE. THUS, THE FACT OF THE EXPENDITURE IS NOT DISPUTED. THE ONLY ISSU E IS WHETHER IN THE USE OF THE VEHICLES, THERE WAS SOME ELEMENT OF PERSONAL USE BY THE DIRECTORS. IN THIS CONTEXT, IT WOULD BE OF NOTE THAT FOR DEALING WITH SUCH PERSONAL USE, THERE IS PROVISION FOR TAXATION OF PERQUISITES IN THE HANDS OF THE EMPLOYEES. ALTERNATELY, FRINGE BENEFIT TAX (FBT) WAS INTRODUCED IN FINANCE ACT, 2005 TO TAX INTANGIBLE AND INVISIBLE BENEFITS IN THE HANDS OF THE EMPLOYER. THE ADDITION, THEREFORE, CAN BE MADE EITHER IN THE HANDS OF THE DIRECTORS AS PERQUISITE OR IN THE HANDS OF THE APPELLANT COMPANY AS FBT. THERE IS NO CASE FOR ESTIMATED DISALLOWANCE IN THE HANDS OF THE APPELLANT COMPANY. THE ADDITION OF RS.1,11,097/ - IS, THEREFORE, DELETED. THE APPELLANT GETS A RELIEF OF RS.1,11,097/ - . 8.1. WE FIND NO INFIRMITY IN THE SAME. TH ERE IS NO EVIDENCE THAT THE EXPENDITURE INCURRED ON THE CREDIT CARD IS FOR THE PERSONAL USE OF THE ASSESSEE AND NOT FOR THE COMPANY. IN THE RESULT THIS GROUND IS DISMISSED. 9 . GROUND NO.5 IS GENERAL IN NATURE. 1 0 . IN THE RESULT THE APPEAL BY THE REVENUE ST ANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH MAY , 2015. SD/ - SD/ - ( C.M. GARG ) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 08 TH MAY , 2015 MANGA ITA 606/DEL/2013 AY: 2004 - 05 NORTHERN STRIPS LTD. 4 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR