BHARAT SPRINGS P.LTD, MUMBAI V. ASST CIT 6(1), MUMBAI

ITA 7406/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1654 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-01-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 29-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK KUMAR SINHA
• Assessee Lawyers: MRUGAKSHI K JOSHI
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 7406/MUM/2010(A.Y.2006-07) M/S. BHARAT SPRINGS PVT. LTD. 37, BARRISTERMATH PAI MARG, COTTON GREEN, MUMBAI -400 033. PAN:AAACB 1925E (APPELLANT) VS. ASST. CIT - 6(1), MUMBAI. (RESPONDENT) APPELLANT BY : MS. MRUGAKSHI K. JOSHI RESPONDENT BY : SHRI DIPAK KUMAR SINHA DATE OF HEARING : 02/01/2013 DATE OF PRONOUNCEMENT : 04/01/2013 ORDER PER I.P.BANSAL, J.M THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-14, MUMBAI DATED 03/08/2010 FO R THE ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL RAISED BY THE ASSES SEE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW: (A) THE LEARNED CIT(A) ERRED IN MAKING AN ADDITION U/S. 68 OF A SUM OF RS. 1,89,223/-, RECEIVED DURING THE YEAR FROM MAHINDRA & MAHINDRA LTD., ON THE BASIS OF INFORMATION PROVIDED BY MAHINDRA & MAH INDRA (IN REPLY TO NOTICE U/S. 133(6), THAT THE SAID SUM WAS PAID TO T HE APPELLANT ON WHICH TDS AMOUNTING TO RS. 4,246/- HAD BEEN DEDUCTED. (B) THE LEARNED CIT(A) FAILED TO TAKE INTO CONSIDER ATION THAT DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAS NOT CONDUCTE D ANY JOB WORK SERVICES FOR WHICH LABOUR CHARGES ARE REQUIRED TO B E PAID AND HENCE THERE WOULD BE NO NEED FOR MAHINDRA & MAHINDRA TO DEDUCT ANY TDS. INFACT THE BENEFIT OF TDS CERTIFICATES HAVE NOT BEEN AVAILED O F BY THE APPELLANT ALSO. ITA NO. 7359/MUM/2010(A.Y.2005-06) 2 (C) THE LEARNED CIT(A) FAILED TO TAKE INTO CONSIDER ATION THAT PAYMENTS RECEIVED DURING THE YEAR WERE IN RESPECT OF SALES M ADE TO MAHINDRA & MAHINDRA IN -06 AND NO FRESH TRANSACTION WAS MADE I N A.Y. 06-07. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURING OF AUTOMOBILE LEAF SPRINGS. IT FILED ITS RETURN AT A LOSS OF RS. 87 ,53,807/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE AO THA T PAYMENT OF RS.1,89,224/- WAS MADE BY M/S. MAHINDRA & MAHINDRA LTD. ON 25/04/2005 AND 5/12/2005. CORRESPONDING TDS AMOUNT OF RS.4,246/- WAS DEPOSITE D ON GOVERNMENT TREASURY ON 5/7/2005, 6/5/2005 AND 6/6/2005. ACCORDING TO AO T HE SAID AMOUNT OF RS.1,89,223/- WAS NOT ACCOUNTED FOR BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. HE ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSES SEE. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE LD. CIT(A). IT WAS SUBMITTED THA T AO DID NOT GIVE FAIR OPPORTUNITY TO MEET THE REPLY RECEIVED FROM M/S. MAHINDRA & MAHIN DRA LTD. THE PAYMENT WAS RECEIVED IN RESPECT OF SALES MADE BY THE ASSESSEE T O THE SAID CONCERN IN ASSESSMENT YEAR 2005-06. IT WAS SUBMITTED THAT M/S.MAHINDRA & MAHINDRA LTD. WAS DEBTOR OF THE ASSESSEE FOR A SUM OF RS. 3,68,857/- AS AT THE BEGINNING OF THE YEAR AGAINST WHICH THE ASSESSEE HAD RECEIVED A SUM OF RS.76,222/- ON 1 6/5/2005 AND RS.1,83,793/- ON 30/6/2005. IT WAS ALSO SUBMITTED THAT A CORRESPON DENCE WAS ENTERED INTO WITH M/S. MAHINDRA & MAHINDRA LTD. THROUGH E-MAIL AND IN E-M AIL THEY HAVE STATED THAT THEY HAVE MADE PAYMENT TO THE ASSESSEE OF RS. 1,83,793/- , ON WHICH TDS OF RS.4,246/- IS DEDUCTED WHICH IS DEBITED TO ACCOUNT OF THE ASSESSE E. IT WAS SUBMITTED THAT TDS WAS NOT APPLICABLE AS IT PERTAINED TO THE MATERIAL S UPPLIED. THUS IT WAS SUBMITTED THAT THE SAID AMOUNT WAS NOT ASSESSABLE IN THE YEAR UNDE R CONSIDERATION. HOWEVER, LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE. THE ASSESSE E IS AGGRIEVED, HENCE, IN APPEAL. 3. AFTER NARRATING THE FACTS THE SUBMISSIONS MADE B Y THE ASSESSEE BEFORE LD. CIT(A) WERE REITERATED BEFORE US. LD. AR OF THE A SSESSEE HAD CARRIED US THROUGH THE FOLLOWINGS PAGES OF THE PAPER BOOK: ITA NO. 7359/MUM/2010(A.Y.2005-06) 3 S.NO. PAGE NOS. PARTICULARS 1. 15 LIST OF SUNDRY DEBTORS AS ON 31/3/2005, WHERE IN MAHINDRA & MAHINDRA LTD. HAS SHOWN TO BE A DEBTOR O F RS.3,68,857.35. 2. 16 ACCOUNT OF MAHINDRA & MAHINDRA IN THE BOOKS O F THE ASSESSEE AS ON 31/3/2005, WHEREIN BILL NO.04- 05/203,204,205 & 481 ARE MENTIONED AT RS.46,113.77, RS.73,643.27, RS. 16,955.04 AND RS.65,354.43 RESPECTIVELY TO SHOW THAT THOSE RECEIPTS HAVE ALREA DY BEEN ACCOUNTED FOR IN THE BOOKS FOR A.Y 2005-06. 3. 18 COPY OF ACCOUNT OF MAHINDRA & MAHINDRA LTD. F OR FINANCIAL YEAR 2005-06, WHEREIN THE ASSESSEE HAS RECEIVED A SUM OF RS. 1,83,793.24 ON WHICH TDS HAS BEEN DEDUCTED. 4. 20 COPY OF E-MAIL RECEIVED BY THE ASSESSEE FROM MAHINDRA & MAHINDRA GIVING THE DETAILS OF PAYMENT OF RS.1,83,793/-, WHICH IS NET OF THE TDS OF RS.4,246/ - AND DEBIT NOTE OF RS.1185/-. 5. 22 GIVING THE DETAILS OF RS. 1,89,224.24 IN WHIC H AFOREMENTIONED BILLS NUMBERS WITH AMOUNT HAVE BEEN MENTIONED. 4. REFERRING TO THE AFOREMENTIONED DOCUMENTS IT WAS SUBMITTED BY LD. AR THAT ADDITION HAS WRONGLY BEEN SUSTAINED BY LD. CIT(A) A ND THE SAME IS REQUIRED TO BE DELETED. 5. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS O F A.O AND CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE ADDITION HAS BEEN MADE BY TH E AO SIMPLY FOR THE REASON THAT THE AMOUNT ON WHICH THE TDS HAS BEEN DEDUCTED WAS R ECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AND IT WAS NOT DISCLOS ED IN THE BOOKS OF ACCOUNT FOR THE IMPUGNED ASSESSMENT YEAR. AS AGAINST THAT IT IS TH E CASE OF THE ASSESSEE THAT THE SAID PAYMENT WAS RECEIVED BY IT IN LIEU OF EARLIER OUTS TANDING AND MERE RECEIPT OF THE SAID AMOUNT IN THE YEAR UNDER CONSIDERATION CANNOT BE DE SCRIBED AS INCOME OF THE ASSESSEE IN RESPECT OF IMPUGNED ASSESSMENT YEAR. TO DEMONST RATE THAT THE AFOREMENTIONED AMOUNT WAS ACCOUNTED FOR IN A.Y 2005-06 THE ASSESSE E HAS RELIED UPON THE AFOREMENTIONED DOCUMENTS. AFTER GOING THROUGH THE DOCUMENTS, IT IS CLEAR THAT THE ITA NO. 7359/MUM/2010(A.Y.2005-06) 4 ASSESSEE HAS ALREADY CONSIDERED THE ABOVE AMOUNT IN THE RECEIPTS PERTAINING TO A.Y 2005-06. THEREFORE, MERE RECEIPT OF THE SAID AMOUN T IN THE YEAR UNDER CONSIDERATION CANNOT BE CONSIDERED AS INCOME FOR THE YEAR UNDER C ONSIDERATION. THE ADDITION HAS WRONGLY BEEN MADE AND SUSTAINED. THE SAME IS DELET ED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH DAY OF JAN.2013 SD/- SD/- (RAJENDRA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 4 TH JAN.2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R B BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.