DCIT, New Delhi V. M/s. Delhi Magzine Distributors Pvt. Ltd., New Delhi

ITA 6255/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4759 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 145

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6255/DEL/2014 (ASSESSMENT YEAR: 2011 - 12 ) DCIT, CIRCLE - 10(1), NEW DELHI VS. DELHI MAGZINE DISTRIBUTORS PVT. LTD, 110, BANGLA SAHIB MARG, NEW DELHI PAN:AAACD0072G (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANSHU PRAKASH, SR. DR ASSESSEE BY: NONE DATE OF HEARING 04/09 / 2017 DATE OF PRONOUNCEMENT 13 / 09 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XIII, NEW DELHI DATED 12.09.2014 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE AND DIRECTING TO DELETE ADDITION OF RS. 3578519/ - MADE BY THE AO AFTER REJECTING THE BOOKS OF ACCOUNTS WITHOUT TAKING INTO CONSIDERATION THE FACT THAT NEITHER QUANTITATIVE DETAILS WERE AVAILABLE WITH THE ASSESSEE, NOT IT COULD GIVE ANY BASIS FOR VALUATION OF CLOSING STOCK AND ALSO THAT REASON FOR PERSISTENT LOSS YEAR AFTER YEAR WAS NOT EXPLAINED BY THE ASSESSEE DURING ASSESSMENT PROCEEDING. 3. THE BRIEF FACTS ARE THAT ASSESSEE IS A PRIVAT E LIMITED COMPANY CARRYING ON BUSINESS OF WHOLESALE DISTRIBUTION OF PRINT MEDIA INCLUDING BOOKS, MAGAZINES, AND NEWSPAPERS. IT FILED ITS RETURN OF INCOME ON 30/09/2011 DECLARING TOTAL INCOME OF RS. 3 679930/ . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E LD. ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE QUANTITATIVE DETAILS TO WHICH THE ASSESSEE SUBMITTED THAT DUE TO THE NATURE OF THE BUSINESS IT IS NOT POSSIBLE TO FURNISH THE REQUIRED INFORMATION PAGE 2 OF 3 HOWEVER THE QUALITY AND VALUE OF THE OPENING AND C LOSING STOCKS HAVE BEEN TAKEN AS VALUED AND CERTIFIED BY THE MANAGEMENT AND SAME WERE FURNISHED. TH EREFORE , ACCORDING TO THE ASSESSING OFFICER THERE SHOULD BE QUANTITATIVE DETAILS OF GOODS TRADED AND SAME SHOULD BE VERIFIABLE. FURTHER, ACCORDING TO HIM BA SIS FOR VALUATION OF CLOSING STOCK WAS ALSO NOT SHOWN . T HEREFORE HE REJECTED THE BOOKS OF ACCOUNT A PPLYING THE PROVISIONS OF SECTION 145 OF THE INCOME TAX ACT AND ADOPTED PROFIT OF THE ASSESSEE AT 2% AFTER EXCLUDING ALL EXPENSES AND THEREFORE THE ADDITION OF RS. 4 511681 / - AGAINST THE LOSS OF RS. 2 988903 / - WAS MADE. HOWEVER, ACCORDING TO HIM AS THE NET ADDITION COMES TO RS. 7 500584 / - AND THE ASSESSEE HAS SHOWN INCOME OF RS. 3922065 / - ON ACCOUNT OF HANDLING FEES THE SAME IS REDUCED FROM THE GROSS PROFIT ADDI TION OF RS. 7 500584 / - AND NET ADDITION OF RS. 3578519/ WAS MADE. CONSEQUENTLY, THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT RS. 7258450 / - AGAINST THE INCOME RETURNED BY THE ASSESSEE OF RS. 3679930/ . ASSESSEE AGGRIEVED WITH THE ORDER OF THE LD. ASSESS ING OFFICER PREFERRED AN APPEAL BEFORE THE LD. CIT A, WHO DELETED THE ABO VE ADDITION . THEREFORE, REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY RELIED UPON THE ORDER OF THE LD. ASSESSING OFFICER AND SUBMITTED THAT IN ABSENC E OF THE QUANTITATIVE DETAILS THE BOOKS OF ACCOUNTS HAVE BEEN CORRECTLY REJECTED. HE SUBMITTED THAT WITHOUT VERIFICAT ION OF THE QUANTITATIVE DETAILS LD. CIT A, HAS DELETED THE ABOVE ADDITION. 5. DESPITE NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREF ORE, THE ISSUE IS DECIDED BASED ON INFORMATION AVAILABLE ON RECORD. 6. WE HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IN THE PRESENT CASE, THE LD. ASSESSING OFFICER HAS NOT FOUND ANY DEFECT IN THE BOOKS OF ACCOUNTS EXCEPT THAT THE AUDIT REPORT WHERE IT IS MENTIONED THAT QUANTITATIVE DETAILS HAVE NOT BEEN MAINTAINED BY THE ASSESSEE. IT IS AN ESTABLISHED PRINCIPLE OF LA W THAT TO REJECT THE BOOKS OF ACCOUNTS OF THE ASSESSEE THERE HAS TO BE LATENT, PATENT, GLARING AND S UBSTANTIAL DEFECTS IN THE BOOKS OF ACCOUNTS MUST BE FOUND . MERELY NOT MAINTAINING THE QUANTITATIVE DETAILS , WHERE THE NATURE OF THE BUSINESS OF THE ASSES SEE DOES NOT JUSTIFY SO, REJECTION OF THE BOOKS OF ACCOUNTS ON THAT BASIS WITHOUT FINDING ANY DEFECT IN THE PURCHASE OR SALES OR EXPENDITURE INCURRED BY THE PAGE 3 OF 3 ASSESSEE CANNOT BE ACCEPTED. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT A IN DELETING THE ABOVE ADDITION/DISALLOWANCES MADE BY THE LD. ASSESSING OFFICER. IN THE RESULT GROUND NO. 1 OF THE APPEAL OF THE REVENUE AGAINST THE DELETION OF ADDITION OF RS. 3 578519/ IS DISMISSED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 / 0 9 / 2017 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 0 9 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI