M/S RAGA MOTORS P. LTD, JALANDHAR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE IV, JALANDHAR

ITA 68/ASR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0935 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 07-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: J S BHASIN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.68/(ASR)/2018 ASSESSMENT YEAR: 2014-15 RAGA MOTORS P. LTD., PARAGPUR GT ROAD, JALANDHAR. [PAN: AABCR 7790L] VS. DY. CIT, CIRCLE-IV, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J. S. BHASIN, AD VOCATE RESPONDENT BY: SH. CHARAN DAS, SR. DR DATE OF HEARING : 05.11.2018 DATE OF PRONOUNCEMENT: 26.11.2 018 ORDER PER SANJAY ARORA, A.M. THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, JALANDHAR ( CIT(A) FOR SHORT) DATED 18.12.2017, DISMISSING THE ASSESSEES APPEAL CONTES TING ITS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) FOR ASSESSMENT YEAR (A.Y.) 2014-15 VIDE ORDER DATED 26.12.2016. 2. THE APPEAL RAISES TWO ISSUES, WHICH WE SHALL TAK E UP IN SERIATIM. THE FIRST, IT WAS CLAIMED BY THE LEARNED COUNSEL FOR THE ASSESSEE , SH. BHASIN, AS COVERED BY THE TRIBUNALS ORDER IN THE ASSESSEES OWN CASE FOR AY 2012-13 (IN ITA NO. 11/ASR/2017, DATED 16/2/2018). IN THAT YEAR, THE AS SESSING OFFICER (AO), FINDING THE ASSESSEES AN AUTHORIZED DEALER FOR MARUTI VE HICLES, ALSO MAINTAINING SERVICE WORKSHOPS, ACCOUNTS, IN RELATION TO THE JOB-WORK, A S NOT RELIABLE INASMUCH AS ALL THE RECEIPTS THEREOF WERE, IN HIS VIEW, NOT ACCOUNTED F OR, MADE IN ADDITION FOR RS. 15 ITA NO.68/(ASR)/2018 (A.Y.2014-15) RAGA MOTORS PVT. LTD. V. DY. CIT 2 LACS, WHICH WAS REDUCED BY THE FIRST APPELLATE AUTH ORITY TO RS. 5 LACS. IN FURTHER APPEAL, THE TRIBUNAL FOUND NO CASE FOR HOLDING THE ASSESSEES ACCOUNTS AS NOT RELIABLE, AND DELETED THE BALANCE ADDITION AS WELL. THE CONCLUDING PART OF THE TRIBUNALS ORDER IN THE MATTER READS AS UNDER: 5. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATE RIAL ON RECORD. AT THE VERY OUTSET,.. WE ARE, ON BALANCE, SATISFIED WITH THE EXPLANATIONS (INCLUDING THE CORROBORATIVE MATERIAL) FURNISHED BY THE ASSESSEE ( THROUGH THE LD. AR) IN RESPECT OF THE QUERIES RAISED QUA THE ACCOUNTING OF THE JOB WORK SEGMENT OF THE ASSE SSEES BUSINESS. WE ARE, HOWEVER, UNABLE TO APPRECIATE AS TO HOW THE SALE OF USED OIL IS, AS CLAIMED, CREDITED TO THE SALE OF SPARE PARTS INASMU CH AS THERE IS NO PURCHASE THEREOF (USED OIL). HOWEVER, WHERE CREDITED TO A SALE ACCOU NT, THE SAME, IRRESPECTIVE OF THE ACCOUNT HEAD, GETS CREDITED TO THE PROFIT & LOSS AC COUNT, SO THAT THE SAME IS IN ORDER. THE TOTAL SALE FOR THE RELEVANT YEAR, AS APP EARS FROM THE SALE BILLS ENCLOSED IN THE PAPER-BOOK (PB PGS. 69-72), IS FOR RS. 28,444/- . THE REVENUE HAS NOT DOUBTED THE SALE VOLUME THEREOF, MAKING AN INFORMED ESTIMAT E OF THE SALE THAT OUGHT TO HAVE MATERIALIZED. UNDER THE CIRCUMSTANCES, THEREFORE, S UBJECT TO THE SAID AMOUNT BEING CREDITED TO THE PROFIT AND LOSS ACCOUNT FOR THE YEA R, NO INTERFERENCE WITH THE PROFIT (OF THE WORKSHOP BUSINESS) AS DISCLOSED PER THE ASS ESSEES ACCOUNTS IS CALLED FOR. WE DECIDE ACCORDINGLY. [ AFTER GIVING THE BACKGROUND FACTS THUS, THE LD. COU NSEL WOULD SUBMIT THAT THE REVENUE HAS, SIMILARLY, ADDED RS. 10 LACS FOR THE C URRENT YEAR, WHICH STANDS RESTRICTED BY THE LD. CIT(A) TO RS. 5 LACS. THIS EX PLAINS HIS STATING OF THE ASSESSEES CASE AS BEING COVERED BY THE TRIBUNALS ORDER FOR A Y 2013-14. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 THE TRIBUNAL, FOR AY 2013-14, FOUND THAT THOUGH THE AO HAD RAISED VALID ISSUES QUA ITS JOB ACCOUNTING, THE ASSESSEE HAD, IN RESPONSE , FURNISHED PROPER EXPLANATIONS. IN FACT, IT WENT TO THE EXTENT OF REQ UIRING THE ASSESSEE TO EXPLAIN THE CERTAIN AREAS ON WHICH THE DOUBTS RAISED HAD BEEN, IN ITS VIEW, NOT PROPERLY ADDRESSED BY THE ASSESSEE, EITHER BEFORE THE AO OR THE FIRST APPELLATE AUTHORITY. AND ITA NO.68/(ASR)/2018 (A.Y.2014-15) RAGA MOTORS PVT. LTD. V. DY. CIT 3 AFTER CONSIDERING THE ASSESSEES EXPLANATION QUA THE SAME (REFER PARA 5 OF THE ORDER SUPRA), DELETED THE ADDITION, SUBJECT TO THE PROPER ACCOUNTING OF SALE OF USED OIL. IN THE FACTS OF THE INSTANT CASE, THE REVENUE HAS, SIM ILARLY, RAISING CONCERNS ON THE SAME ISSUES, HAS FINALLY MADE AN ADDITION FOR RS 5 LACS. THE ASSESSEES ACCOUNTING FOR THE CURRENT YEAR IS ON THE SAME BASIS AS FOR TH E PRECEDING YEAR; RATHER, CONTINUES TO BE THE SAME FROM YEAR TO YEAR. NO DIFFERENCE HAS IN ANY CASE BEEN POINTED OUT TO US, WITH IN FACT THE ASSESSING AUTHORITY RELYING ON HIS FINDINGS FOR AY 2013-14. THERE IS, AS SUCH, NO REASON WHY OUR FINDINGS FOR T HAT YEAR SHOULD NOT HOLD GOOD FOR THE CURRENT YEAR AS WELL. WE, ACCORDINGLY, FOLLOWIN G THE TRIBUNALS ORDER FOR AY 2013-14, DELETE THE IMPUGNED ADDITION, OF COURSE, S UBJECT TO THE SAME OBSERVATIONS AS OBTAINING FOR THAT YEAR. WE DECIDE ACCORDINGLY. 3.2 THE ONLY OTHER ISSUE RAISED BY THE ASSESSEE IS QUA DISALLOWANCE OF PRIOR PERIOD EXPENSES AT RS. 2,29,815, RESTRICTED IN FIRS T APPEAL TO RS. 1,25,575. EXAMINING THE ASSESSEES CLAIM IN RESPECT OF COMMIS SION EXPENDITURE (ON SALES), IT WAS FOUND THAT THE SAME INCLUDED THAT IN RESPECT OF SALES MADE DURING FINANCIAL YEAR (F.Y.) 2012-13, I.E., THE PRECEDING YEAR, SO T HAT THE SAME THE ASSESSEE FOLLOWING MERCANTILE METHOD OF ACCOUNTING, WOULD NO T BE A DEDUCTIBLE EXPENSE FOR THE CURRENT YEAR; EACH YEAR BEING AN INDEPENDENT UN IT OF ASSESSMENT. THE ASSESSEES EXPLANATION OF THE COMMISSION ARISING TO THE PAYEE/ S ONLY ON THE REALIZATION OF THE SALE PROCEEDS, SO THAT THE IMPUGNED EXPENDITURE IN FACT ACCRUED DURING THE CURRENT YEAR, WAS FOUND INCORRECT ON FACTS. NO IMPROVEMENT IN ITS CASE STANDS MADE BEFORE US. THE ASSESSEE HAS AT NO STAGE SUBSTANTIATED ITS CASE OF IT ACCOUNTING AND, ACCORDINGLY, CLAIMING THE COMMISSION EXPENSE ON THE REALIZATION OF THE CORRESPONDING SALE. THE DATES OF THE REALIZATION OF THE CORRESPONDING SALE/S, WHICH THEREFORE ASSUMES RELEVANCE IN THIS REGARD, ARE CON SPICUOUS BY THEIR ABSENCE. WHY, WE OBSERVE NO REBUTTAL TO THE FINDINGS, ISSUED ON T HE EXAMINATION OF THE RELEVANT RECORD, BY THE LD. CIT(A) WHO HAS BEEN REASONABLE IN ALLOWING PART RELIEF, AND THE ITA NO.68/(ASR)/2018 (A.Y.2014-15) RAGA MOTORS PVT. LTD. V. DY. CIT 4 ASSESSEEES CASE COMPLETELY FAILS ON FACTS. THE IMP UGNED DISALLOWANCE IS ACCORDINGLY CONFIRMED. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEE APPEAL IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON NO VEMBER26, 2018 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 26.11.2018 PKK COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: RAGA MOTORS P. LTD., PARAGPUR GT ROAD, JALANDHAR. (2) THE DY. CIT, CIRCLE-IV, JALANDHAR. (3) THE CIT(A)-2, JALANDHAR (4) THE CIT CONCERNED (5) THE SR.D.R., I.T.A.T. TRUE COPY BY ORDER