Shitiz Saluja, New Delhi V. ITO WARD - 34(3), New Delhi

ITA 7649/DEL/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1370 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 18-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NUPUR MANGLA
• Keywords: TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2, NEW DELHI BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 7649/DEL/2019 : ASSTT. YEAR : 2016-17 SHITIZ SALUJA, 42-B, 1 ST FLOOR, KD BLOCK, ASHOK VIHAR-I, NEW DELHI-110052 VS INCOME TAX OFFICER, WARD-34(3), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. CUQPS0715N ASSESSEE BY : MS. NUPUR MANGLA, CA REVENUE BY : SH. R. K. GUPTA, SR. DR DATE OF HEAR ING: 1 7 . 06 .20 2 1 DATE OF PRONOUNCEMENT: 29 .06 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-12, NEW DELHI DATED 27. 06.2019. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT ON THE BASIS OF FACTS AND THE LAW GOVERNIN G THE CASE, THE LD. ASSESSING OFFICER IS NOT JUSTIFIE D IN DISALLOWING THE EXPENSES RELATED TO COMMISSION AND SHIPPING CHARGES. 3. THE ASSESSEE IS A SOLE PROPRIETOR OF M/S ZACCO I NDIA. THE ASSESSEE IS ENGAGED IN SALE OF IMPORTED AND DOMESTI CALLY SOURCED ITEMS THROUGH VARIOUS E-COMMERCE WEBSITES S UCH AS AMAZON, FLIPKART, SNAPDEAL ETC. THE ASSESSEE LISTS HIS GOODS ON THESE E-COMMERCE WEBSITES AND RECEIVES ORDERS FROM CUSTOMERS ITA NO. 7649/DEL/2019 SHITIZ SALUJA 2 THROUGH THEM. THE E-COMMERCE OPERATORS PROVIDE VARI OUS SERVICES TO THE ASSESSEE TO FACILITATE SALES OF HIS PRODUCTS VIZ. MARKETING, PACKAGING, LOGISTICS, DELIVERY, COLLECTI ON OF RETURNED ITEMS, COLLECTION OF PAYMENTS ETC. 4. IN LIEU OF THE ABOVE SERVICES, THE E-COMMERCE OP ERATORS CHARGE VARIOUS FEES SUCH AS COMMISSION, MARKETING F EES, PAYMENT COLLECTION FEES, COURIER FEES ETC. CONSOLID ATED INVOICES ARE ISSUED TO THE ASSESSEE ON A MONTHLY BASIS FOR A LL THESE CHARGES. IN THIS CASE, THE ASSESSEE HAS DEDUCTED TD S @ 10% U/S 194H ON THE ENTIRE INVOICE VALUE AND BOOKED THE SAME UNDER THE HEAD COMMISSION AND SHIPPING CHARGES. 5. THE AMOUNTS PAID TO THE RELEVANT E-COMMERCE OPER ATORS BY THE ASSESSEE ARE AS FOLLOWS: S.NO. NAME OF THE PARTY AMOUNT DEBITED TO P&L ACCOUNT (IN RS.) 1. SNAPDEAL (M/S JASPER INFOTECH PVT. LTD.) 10,20,207/- 2. FLIPKART (FLIPKART INTERNET PVT. LTD.) 13,32,670/- 3. AMAZON (AMAZON SELLER SERVICES PVT. LTD.) 53,232/- 6. THE AO HAS WRITTEN TO THE RELEVANT E-COMMERCE OP ERATORS AND ASKED THEM TO CONFIRM THE NATURE AND VALUE OF T HEIR TRANSACTIONS WITH THE ASSESSEE. THE REPLIES OF THE OPERATORS ARE ENUMERATED AS BELOW: A) SNAPDEAL (M/S JASPER IMFOTECH PVT. LTD.) IN RESPONSE, THE OPERATOR HAS ONLY MENTIONED THE NA TURE OF THE BUSINESS I.E. ONLINE PLATFORM PROVIDED TO BUYER S AND SELLERS. ITA NO. 7649/DEL/2019 SHITIZ SALUJA 3 HOWEVER, NO DETAILS REGARDING THE NATURE OF TRANSAC TIONS AND DETAILS OF THE FEES CHARGED HAVE BEEN PROVIDED. THE LEDGER ACCOUNT OF THE ASSESSEE AS PER THEIR BOO KS HAS BEEN PROVIDED WHICH CONTAINS DETAILS OF ALL DEBITS AND CREDITS INCLUDING REVERSALS. THE LEDGER DOES NOT PR OVIDE DETAILS OF THE NET AMOUNT CHARGED FROM THE ASSESSEE ON VARIOUS COUNTS SUCH AS MARKETING FEES, FULFILLMENT FEES, PAYMENT COLLECTION FEES AND COURIER FEES. THE OPERATOR HAS SUBMITTED THAT THE TOTAL AMOUNT OF COMMISSION RECEIVED FROM THE ASSESSEE IS RS 420,348 /-. HOWEVER, NO DETAILS RELATED TO OTHER CHARGES RECOVE RED FROM THE ASSESSEE HAVE BEEN PROVIDED E.G. COURIER F EES, FULFILLMENT FEES ETC. THE OPERATOR HAS ALSO NOT PRO VIDED DETAILS OF THE INVOICES ISSUED TO THE ASSESSEE. THUS, THE INFORMATION PROVIDED BY THE OPERATOR IS N OT COMPLETE. THE ASSESSEE HAS BOOKED THE EXPENSES ON THE BASIS O F INVOICES ISSUED BY THE OPERATOR. THE ENTIRE INVOICE VALUE HAS BEEN BOOKED UNDER THE HEAD COMMISSION AND SHIP PING CHARGES AND ALL SUB-ITEMS OF THE INVOICE ARE SUBSU MED IN THIS HEAD. B) FLIPKART (FLIPKART INTERNET PVT. LTD.) IN RESPONSE, THE OPERATOR HAS PROVIDED DETAILS OF A LL THE FEES CHARGED SUCH AS TRANSACTION FEES, SHIPPING FEE S, CASH COLLECTION CHARGES, CANCELLATION FEES. THE SUBMISSION OF THE OPERATOR SHOWS THAT THE TOTAL AMOUNT CHARGED FROM THE ASSESSEE IS RS 12,21,752/- ITA NO. 7649/DEL/2019 SHITIZ SALUJA 4 TOWARDS TOTAL FEES AND .RS 173,209/- TOWARDS SERVIC E TAX AND CESS. THE TOTAL AMOUNT COMES TO RS 13,94,961/-. THE AO HAS IGNORED THE SERVICE TAX AMOUNT AND ONLY CONSIDERED THE BASIC AMOUNT I.E. RS 12,21,752/- TO CONCLUDE THAT THERE IS A DIFFERENCE OF RS 110,918/- . ON THE OTHER HAND, THE ASSESSEE HAS ONLY CLAIMED RS 13,32,670/- IN THE P&L ACCOUNT AS PER THE INVOICES RECEIVED FROM M/S FLIPKART. THIS AMOUNT IS LESS THA N THE AMOUNT MENTIONED BY M/S FLIPKART IN ITS SUBMISSION TO THE LD AO. ACCORDINGLY, THERE IS NO BASIS FOR ANY ADDITION. C) AMAZON SELLER SERVICES PVT. LTD. IN RESPONSE, THE OPERATOR HAS SUBMITTED THAT IT IS UNABLE TO COLLATE INFORMATION BASED ON THE PAN PROVIDED BY THE LD AO. THE OPERATOR HAS REQUESTED THE AO TO VERIFY/ CONFIR M THE PAN. HOWEVER, NO SUCH CONFIRMATION HAS BEEN PROVIDE D BY THE AO. INSTEAD, HE HAS MENTIONED IN THE ASSESSMENT ORDER THAT THE BALANCE AS PER PARTY ACCOUNT IS NIL, WHICH IS FACTUALLY INCORRECT. THE ASSESSEE HAS CLAIMED THE EXPENSES AS PER THE IN VOICES ISSUED BY THE OPERATOR AND THERE IS NO BASIS FOR AN Y ADDITION. 7. COPIES OF ALL INVOICES WERE PROVIDED TO THE LD. CIT(A). HOWEVER, THE LD. CIT(A) HAS MERELY HELD IN HIS ORDE R THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE GENU INENESS OF THE EXPENSES. ITA NO. 7649/DEL/2019 SHITIZ SALUJA 5 8. WE HAVE GONE THROUGH THE RECORD BEFORE US AND FI ND THAT THE CONFUSION AROSE OWING TO THE DEDUCTION OF TDS B Y THE ASSESSEE U/S 194H AND DISSIMILAR APPROACHES TAKEN B Y THE ASSESSEE IN RECORDING THE FACT AND THE INTERPRETATI ON OF THE SAME BY THE REVENUE. HENCE, WE HOLD THAT THE INTERE ST OF JUSTICE WOULD BE WELL SERVED IF THE MATTER IS REMANDED BACK TO THE FILE OF THE AO WITH DIRECTION TO THE ASSESSEE TO FILE PR OPER RECONCILIATION STATEMENTS. THE AO WOULD GO THROUGH THE SAME AND DEAL WITH IT IN ACCORDANCE WITH THE APPROVED AC COUNTING STANDARDS AND PROVISIONS OF THE INCOME TAX ACT. 9. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/06/2021. SD/- SD/- (SUCHITRA KAMBLE) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 29/06/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR