Asstt. Commissioner of Income Tax-1, Kanpur V. M/s Pacific Exports, Kanpur

ITA 612/LKW/2013

• Counselvise Citation: 61223714 RSA 2013
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-07-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 02-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: SUJEET CHAUDHARY
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 612 /LKW/201 3 ASSESSMENT YEAR:20 10 - 11 A.C.I.T. - 1, KANPUR. VS. M/S PACIFIC EXPORTS, 197/189, RAMRAI SARAI, KANPUR. PAN:AABFP8582F (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ALOK MITRA, D.R. RESPONDENT BY SHRI SUJEET CHAUDHARY, C.A. DATE OF HEARING 23 /07/2014 DATE OF PRONOUNCEMENT 2 8 /07/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I I, KANPUR DATED 16 / 04 /201 2 FOR ASSESSMENT YEAR 20 10 - 20 11 . 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.22,76,058/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - DEDUCTION OF TDS ON PAYMENT OF COMMISSION TO FOREIGN AGENT WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASS ESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ABOVE ADDITION MADE BY THE ASSESSING OFFICER WITHOUT CONSIDERING THE BOARD'S CIRCULAR NO.7 /2009 DATED 22.10.2009. 2 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS NOT APPRECIATED THE SETTLED PRINCIPLE IN RESPECT OF INTERPRETATION OF PROSPECTIVE OR RETROSPECTIVE NATURE OF AMENDMENT IN THE STATUTE AS LAID DOWN BY THE HON'BLE S UPREME COURT IN THE CASE OF CIT VS GOLD COIN HEALTH FOOD PVT. LTD. (2008) 304 ITR 308 (SC) AND CIT VS MOSER BAER INDIA LTD. [2009] 315 ITR 460 (SC). 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN NOT APPRE CIATING THE FACT THAT THE SERVICES RENDERED BY THE NON RESIDENT AGENT TO PROCURE ORDERS FROM FOREIGN BUYERS ARE PURELY TECHNICAL AS WELL AS MANAGERIAL IN NATURE. THEREFORE, THE PROVISIONS OF SECTION 9(1)(VII) ARE CLEARLY APPLICABLE ON THE ASSESSEE. 5. THA T THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE PAYMENT BY THE RESIDENT ASSESSEE IN CONNECTION WITH ITS BUSINESS IN INDIA TO A PERSON OUTSIDE COUNTRY IS NOTHING BUT A FEE WHICH H AS BEEN PAID BY THE RESIDENT ASSESSEE TO THE NON - RESIDENT FOR THE TECHNICAL SERVICES RENDERED BY HIM. 6. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - I, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION TO THE EXTENT OF RS.24,533/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF TRAVELLING EXPENSES WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER. 7. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - I, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION TO THE EXTENT OF RS.19,519/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CONVEYANCE EXPENSES WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER. 8. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - I, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING T HE ADDITION TO THE EXTENT OF RS.31,379/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION ON MOTOR CAR WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER. 3 9. THAT THE ORDER OF THE LD. CIT (A) - II, KANPUR DATED 16 - 04 - 2013 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 04 - 03 - 2013 TO BE RESTORED. 10. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AND/OR TO ADD ANY FRESH GROUNDS AS AND WHEN IT IS REQUIRED TO DO SO. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). HE ALSO SUBMITTED THAT AS PER THE RECENT JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. PACIF IC LEATHER FINISHERS IN INCOME TAX APPEAL NO. 554 OF 2011 DATED 19/05/2014, SIMILAR ISSUE WAS DECIDED BY HON'BLE ALLAHABAD HIGH COURT IN FAVOUR OF THE ASSESSEE BY FOLLOWING ITS EARLIER JUDGMENT RENDERED IN THE CASE OF CIT VS. MODEL EXIMS IN INCOME TAX APPE AL (DEFECTIVE) NO. 164 OF 2011 DATED 10/09/2013 AND INCOME TAX APPEAL NO. 313 OF 2013 IN THE CASE OF CIT VS. ALLIED EXIMS DATED 13/11/2013. LEARNED D.R. OF THE REVENUE COULD NOT POINT OUT AS TO HOW THESE JUDGMENTS ARE NOT APPLICABLE IN THE PRESENT CASE AND THEREFORE, BY RESPECTFULLY FOLLOWING THESE JUDGMENTS OF HON'BLE ALLAHABAD HIGH COURT, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) IN RESPECT OF FIRST ISSUE I.E. REGARDING DELETION OF ADDITION OF RS.22,76,058/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT O F NON DEDUCTION OF TDS ON PAYMENT OF COMMISSION TO FOREIGN AGENT RAISED BY THE REVENUE AS PER GROUND NO. 1 TO 5 OF THE APPEAL. ACCORDINGLY, THESE GROUNDS ARE REJECTED. 4. REGARDING THE REMAINING THREE GROUNDS I.E. GROUND NO. 6,7 & 8 AS PER WHICH THE REVENUE IS DISPUTING REGARDING DELETION OF SMALL SUM OF AMOUNTS I.E. RS.24,533/ - ON ACCOUNT OF TRAVELLING EXPENSES, RS.19,519/ - ON ACCOUNT OF CONVEYANC E EXPENSES AND RS.31,379/ - ON ACCOUNT OF DEPRECIATION ON MOTOR CAR , W E FIND THAT THE ASSESSING OFFICER HA S MADE THE DISALLOWANCE TO THE EXTENT OF 20% OF THE TOTAL EXPENSES WHICH WAS RESTRICTED BY CIT(A) TO THE EXTENT OF 10%. SINCE THE DISALLOWANCE WAS MADE ON ESTIMATE BASIS AND IN 4 PLACE OF ESTIMATION OF A.O. , CIT(A) HAS SUBSTITUTED HIS ESTIMATION AND CONSIDE RING THE FACTS OF THE PRESENT CASE, WE FEEL THAT THE DISALLOWANCE UPHELD BY CIT(A) TO THE EXTENT OF 10% IS REASONABLE IN THE FACTS OF THE PRESENT CASE AND THEREFORE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THESE ISSUES ALSO. 5. IN THE RESULT, TH E APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ABOVE) SD/. SD/. (SU NIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 8 /07/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR