ACIT, New Delhi V. M/s. Kiran Motors Ltd., New Delhi

ITA 754/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3455 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-07-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 19-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR GUJJAR
• Keywords: Additional evidence
• Section: 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, VICE PRESIDENT A ND SHRI RAJPAL YADAV, JUDICIAL MEMBER I.T.A NO. 754/DEL/10 ASSTT. YEAR 1999-2000 THE ACIT, CIRCLE 5 (1), 409A, C.R. BLDG. NEW DELHI. VS. M/S. KIRAN MOTORS LTD. Z-4, HAUZ KHAS, NEW DELHI 110 016 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ARUN KUMAR GUJJAR, SR. DR. RESPONDENT BY: SHRI M.P. RASTOGI PER RAJPAL YADAV, JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD. CIT(A) DATED 8 TH SEPTEMBER, 2009 PASSED FOR ASSTT. YEAR 1999-2000. THE SUBSTANTIAL GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 56,63,252/- B Y ENTERTAINING ADDITIONAL EVIDENCE IN VIOLATION TO RULE 46A OF THE INCOME TAX RULES 1962. ITA NO. 754/DEL-2010 ASSTT. YEAR 1999-2000 2 2. WE HAVE HEARD THE LD. REPRESENTATIVE AND WITH TH EIR ASSISTANCE PERUSED THE RECORD CAREFULLY. THE ASSESSEE HAS FILE D ITS RETURN OF INCOME ON 30 TH DECEMBER, 1999 DECLARING AN INCOME OF RS. 2,60,30 ,460/-. AT THE RELEVANT TIME IT WAS ENGAGED IN THE BUSINESS OF TRADING AND SERVICE OF MARUTI VEHICLES IN THE STATE OF GUJARAT. DURING THE COURSE OF ASSESSMENT PROCEEDING LD. AO FOUND THAT ASSESSEE HA S SHOWN AN INTEREST INCOME OF RS. 19.52 LACS. WHEREAS AS PER T HE TDS CERTIFICATE THE ASSESSEE HAS RECEIVED A SUM OF RS. 75.53 LACS A S INTEREST INCOME FROM MARUTI UDYOG LTD., ON ADVANCE MONEY AND OTHERS AND BANK INTEREST ON FIXED DEPOSITS. IT EMERGES OUT FROM THE RECORD T HAT AO HAD ISSUED NOTICES U/S 154 / 155 OF THE INCOME TAX ACT ON 20.6 .2002 AND THE ASSESSEE HAS REPLIED SUCH NOTICE VIDE LETTER DATED 26 TH JUNE, 2003, WHEREIN IT EXPLAINED THAT ASSESSEE IS A REGISTERED DEALER OF MARUTI UDYOG LIMITED. IT HAD RECEIVED INTEREST INCOME OF R S. 79.15 LACS FROM MARUTI UDYOG LIMITED ON ADVANCE MONEY GIVEN, RESERV E FUND, BANK INTEREST ON FD. THE ASSESSEE HAS PAID INTEREST AMOU NTING TO RS. 59.63 LACS TO CUSTOMERS ON THE ADVANCES RECEIVED FOR BOOK ING OF VEHICLES AS PER MARUTI UDYOG POLICY. THE ASSESSEE HAS ENCLOSED COPY OF THE POLICY ALONG WITH ITS REPLY. THE NET FIGURE OF THE ABOVE A T RS. 19.52 LACS HAS BEEN CREDITED TO THE PROFIT AND LOSS ACCOUNT. ACCOR DING TO THE FINDING OF LD. CIT(A) NO INFORMATION IS AVAILABLE ON THE RECOR D EXHIBITING WHAT HAD ITA NO. 754/DEL-2010 ASSTT. YEAR 1999-2000 3 HAPPENED TO THAT PROCEEDING. HOWEVER AO HAD INITIAT ED REASSESSMENT PROCEEDING BY ISSUANCE OF A NOTICE U/S 148 OF THE I NCOME TAX ACT. IN THE REASSESSMENT ORDER HE HAS MADE AN ADDITION OF RS. 5 6,63,252/-. 3. ON APPEAL LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT AS PER THE POLICY OF MARUTI UDYOG LIMITED ASSESSEE WAS SUPPOSED TO PAY INTEREST ON THE ADVANCES RECEIVED BY IT TOWARDS BOO KING OF CARS FROM THE CUSTOMER. ACCORDING TO THAT POLICY THE INTEREST WAS REQUIRED TO BE PAID TO THE CUSTOMER FROM THE DATE OF DEPOSIT TILL THE DATE OF INVOICE LESS SEVEN DAYS. LD. CIT(A) HAS EXAMINED THE TRIAL BALANCE OF THREE BRANCHES NAMELY AHMEDABAD, SURAT, BARODA AND ALSO EXAMINED T HEIR LEDGER ACCOUNTS. AFTER GOING THROUGH THOSE DETAILS LD. CIT (A) WAS SATISFIED THAT ASSESSEE HAS PAID INTEREST OF RS. 56,63,252/- ON TH E DEPOSITS RECEIVED BY IT TOWARDS BOOKING OF CARS. AFTER SETTING OF THI S INTEREST EXPENSES IT HAS SHOWN NET INTEREST INCOME AT RS. 19,52,326/- IN THE P & L ACCOUNT. ACCORDING TO THE LD. CIT(A) THE AO HAS NOT CALLED F OR THE NECESSARY RECORD MAINTAINED BY THE ASSESSEE AT THE AFORESAID THREE BRANCHES OTHERWISE HE WOULD HAVE EASILY VERIFIED, THE FACTUM OF PAYMENT OF INTEREST AND WOULD HAVE SAVED THE AVOIDABLE LITIGAT ION. 4. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(A). ASSE SSEE HAS PLACED ON RECORD THE DETAILS OF INTEREST PAYMENTS PAID BY IT IN THE PAPER BOOK AT ITA NO. 754/DEL-2010 ASSTT. YEAR 1999-2000 4 PAGES NO. 42 133. IT HAS ALSO PLACED THE OTHER DE TAILS AND COPIES OF THE REPLIES GIVEN TO THE AO IN RESPONSE TO THE NOTI CE U/S 148 AS WELL AS IN RESPONSE TO THE NOTICE RECEIVED U/S 154 READ WIT H SECTION 155 OF THE ACT. ALONGWITH THE REPRESENTATIVE WE HAVE GONE THRO UGH PAGE NO. 32 WHERE REPLY OF THE ASSESSEE IN RESPONSE TO THE NOTI CE RECEIVED U/S 154 IS AVAILABLE. THE LD. CIT(A) HAS NOT ENTERTAINED AN Y ADDITIONAL EVIDENCE RATHER HE HAS JUST VERIFIED THE CLAIM OF ASSESSEE W HICH AO OUGHT TO HAVE DONE. ASSESSEE HAS BROUGHT ALL THESE FACTS TO THE N OTICE OF AO BUT IT APPEARS LD. AO DID NOT BOTHER TO LOOK INTO ALL THES E ASPECTS. WITHOUT CONSIDERING THESE DETAILS HE SIMPLY DISALLOW THE CL AIM OF ASSESSEE AND MADE ADDITION OF RS. 56,63,252/-. THE LD. CIT(A) ON THE OTHER HAND MADE A LUCID ENUNCIATION OF THE LAW AS WELL AS ON F ACTS. CONSIDERING THE WELL REASONED ORDER OF THE LD. FIRST APPELLATE AUTH ORITY WE DO NOT SEE ANY REASON TO INTERFERE IN IT. 5. THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.7.2010. SD/- [G.E. VEERABHADRAPPA] [RAJPAL YADAV] VICE PRESIDENT JUDICIAL MEMBER DATED: 30.7.2010 VEENA ITA NO. 754/DEL-2010 ASSTT. YEAR 1999-2000 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT