ITO 7(2)(3), MUMBAI V. S. KUMARS ONLINE LTD, MUMBAI

ITA 7356/MUM/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71943 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 27-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: YOGESH JOPJODE

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.7356/MUM/2010 ASSESSMENT YEAR:- 2005-06 ITO-7(2)(3), ROOM NO. 670, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI 20 VS. M/S S. KUMARS ONLINE LTD. AVADH BUILDING, 02 ND FLOOR, SHREE RAM MILLS PREMISES, G.K. MARG, WORLI, MUMBAI 400 018. PAN:- AADCS9248J APPELLANT RESPONDENT ASSESSEE BY SHRI YOGESH JOPJODE DEPARTMENT BY SHRI GIRIJA DAYAL ORDER PER I.P. BANSAL, JM THIS APPEAL IS FILED BY THE REVENUE. IT IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) DATED 4 TH JUNE 2010 FOR ASSESSMENT YEAR 2005-06. GROUNDS OF APPEAL READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 12,41,75,860/- WHICH W AS MADE BY THE AO BY TREATING THIS AMOUNT AS TRADING RECEIPT AND WHICH WERE CLAIMED AS LIABILITIES OF FRANCHISEES AND SPECIAL BUSINESS ASSOCIATES BY THE ASSESSEE BY TREATING THE M AS REFUNDABLE DEPOSITS. LQUOKBZ DH RKJH[K@ DATE OF HEARING 19-12-2013 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT 19-12-2013 - 2 - 2. AT THE OUTSET IT WAS POINTED OUT BY LD. AR THAT THE FIGURE MENTIONED IN THE GROUNDS OF APPEAL IS INCORRECT AND THE SAME SHO ULD BE 8,05,51,125/-. LD. DR SUBMITTED THAT THE FIGURE MAY BE TAKEN AS 8,05,51,1 25/. IT WAS FURTHER POINTED OUT THAT THE ISSUE RAISED BY THE REVENUE IS COVERED BY THE EARLIER DECISION OF THE TRIBUNAL WHICH IS DATED 22 ND JANUARY 2009 IN ITA NO. 589/MUM/2006, COPY OF THE SAID ORDER HAS BEEN FILED AT PAGES 201 TO 209 O F THE PAPER BOOK. SUBSEQUENTLY, THE SAID DECISION WAS FOLLOWED IN RESPECT OF ASSESS MENT YEAR 2003-04 AND FOLLOWING THE EARLIER DECISION VIDE ORDER DATED 3 RD AUGUST 2009, THE ISSUE WAS AGAIN DECIDED IN FAVOUR OF THE ASSESSEE IN ITA NO. 5868/MUM/2006, COPY OF THIS ORDER IS ALSO PLACED ON RECORD AT PAGES 213 TO 219 OF PAPER BOOK. 3. IT WAS FURTHER POINTED OUT THAT DEPARTMENTAL APP EAL FILED BEFORE HONBLE HIGH COURT OF BOMBAY HAS ALSO BEEN DISMISSED BY THE HONBLE HIGH COURT VIDE THEIR ORDER DATED 14 TH JUNE 2011 IN INCOME TAX APPEAL NOS. 5726 OF 2010 A ND 1457 OF 2010 FOR ASSESSMENT YEAR 2002-03 RESPECTIVE LY. COPY OF THESE ORDERS ARE ALSO FILED AT PAGES 220 TO 224 OF THE PAPER BOOK. F OR THE SAKE OF CONVENIENCE THE ORDER OF HONBLE HIGH COURT OF BOMBAY IN RESPECT OF ASSESSMENT YEAR 2002-03 IS REPRODUCED BELOW:- 1. THREE QUESTIONS OF LAW ARE SOUGHT TO BE RAISED B Y THE REVENUE IN THIS APPEAL;- (A) WHETHER ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW THE ITAT IS JUSTIFIED IN UPHOLDING HE DECISION OF CIT(A) DEL ETING THE ADDITION OF RS. 12,41,75,860/- MADE ON ACCOUNT OF OUTSTANDING BALAN CES OF FRANCHISES AS WELL AS STRATEGIC BUSINESS ASSOCIATES (SBA) WITHOUT APPRECI ATING THE FACT THAT AO HAS CLEARLY BROUGHT ON RECORD THAT SELF DEPOSITS ARE NOT PAYABL E TO THE FRANCHISES AND SBAS? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE AND IN LAW, THE ITAT IS JUSTIFIED IN UPHOLDING THE DECISION OF CIT(A) THAT SINCE THE ADDITION HAS ALREADY BEEN MADE ON THIS ACCOUNT FOR AY 2002-03, FURTHER ADDITI ON OF THE SAME AMOUNT IN AY 2003- - 3 - 04 AMOUNTS TO DOUBT ADDITION, WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE THAT THESE HAS BEEN ADDITION TO THE EXTENT OF RS. 7,91,3 1,663/- IN THESE ACCOUNTS DURING THE YEAR? (C) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE TRIBUNAL WAS CORRECT IN NOT TREATING THE AMOUNT OF RS. 12,41,75,860/- BEING THE AMOUNT OF FRANCHISE AS WELL AS STRATEGIC BUSINESS ASSOCIAT ION (SBA) AS TRADING/REVENUE RECEIPT? 2. AS REGARDS QUESTION (B) IS CONCERNED, THE COUNSE L FOR THE REVENUE FAIRLY STATES THAT THE SAID QUESTION DOES NOT ARISE FROM THE ORDE R OF THE TRIBUNAL. HENCE QUESTION (B) CANNOT BE ENTERTAINED. 3. AS REGARDS QUESTION (A) & (C) ARE CONCERNED, COU NSEL FOR THE PARTIES STATE THAT SIMILAR QUESTIONS RAISED BY THE REVENUE IN RESPECT OF THE SAME ASSESSEE IN INCOME TAX APPEAL NO. 5726 OF 2010 FOR ANOTHER ASSESSMENT YEAR HAS BEEN REJECTED BY THIS COURT TODAY I.E. 14/6/2011. HENCE QUESTIONS (A) & (C) CAN NOT BE ENTERTAINED. 4. ACCORDINGLY, THE APPEAL IS DISMISSED WITH NO ORD ER AS TO COSTS. 4. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL AS THE ISSUE HAS B EEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL AND THE ORDER OF THE TRIBUNAL HAS B EEN UPHELD BY THE HONBLE HIGH COURT. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 -12-2 013. SD/- SD/- (N.K. BILLAIYA) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER SKS SR. P.S, MUMBAI DATED 19-12-2013 - 4 - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI