Appeal details
Counselvise Citation
[2022] 104 COUNSELVISE.COM (IT) 9654 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 7 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-09-2022
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
G
Assessment Year
2010-2011
Appeal Filed On
17-02-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘H’ : NEW DELHI) BEFORE DR. B.R.R.KUMAR, ACCOUNTANT MEMBER AND SH. ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.306/Del/2020 (Assessment Year : 2010-11) M/s. Toshiba Water Solutions Pvt. Ltd. Formerly known as M/s. UEM India Pvt. Ltd. D-19, Kalkaji, New Delhi- 110019 PAN : AAACU0043Q Vs. The Addl. CIT Range-18, New Delhi ITA No.837/Del/2020 (Assessment Year : 2010-11) ACIT, Circle-27(1) New Delhi Vs. UEM India Pvt. Ltd. D-19, Kalka Ji, New Delhi-110019 PAN: AAACU0043Q (APPELLANT) (RESPONDENT) Assessee by Sh. Manish Malik, Adv. & Shri Vinod Gupta, Adv. Revenue by Shri M. Baranwal, Sr. DR Date of hearing: 23.09.2022 Date of Pronouncement: 29.09.2022 ITA No.306 & Ors. 2 ORDER PER ANUBHAV SHARMA, JM: The appeals have been filed by both the Assessee & Revenue against order dated 28.10.2019 in appeal no. 101/14-15/CIT(A)-22, New Delhi in assessment year 2010-11 passed by Commissioner of Income Tax (Appeals)-22, New Delhi (hereinafter referred to as the First Appellate Authority in short ‘Ld. F.A.A.’) in regard to the appeal before it arising out of assessment order dated 28/03/2013 u/s 143(3) of the Income Tax Act, 1961 passed by ACIT, New Delhi (hereinafter referred to as the Assessing Officer ‘AO’). 2. The facts in brief are the appellant/ assessee filed return of income declaring total income of Rs. 5,64,34,442/- which was processed u/s 143(1) on 13.04.2011. The case was selected for scrutiny and notice u/s 143(2) was issued. The Ld. AO observed that the assessee did not deduct tax at all in respect of expenses totaling to Rs. 19,63,146/-. The assessee has claimed that due date of filing return was extended up to 15.10.2010 and assessee had deposited the TDS amounting to Rs. 1,51,671/- on the expenditure of Rs. 19,63,146 with the Government on 05.10.2010. However, Ld. AO held that as the tax has not been deducted, no deduction is allowed in the current previous year and the tax is deducted in a subsequent year, the expenditure will be deducted in the year in which TDS will be deposited by the assessee, accordingly the expenditure of Rs. 19,63,146/- was disallowed. 2.1. Further, the Ld AO had issued notice u/s 133(6) to various sundry creditors, however in regard to M/s. Steel Grace India Pvt. Ltd. the balance ITA No.306 & Ors. 3 as per the assessee was 20,99,479/- were balanced as per the party was Rs. 51,28,475/- the difference Rs. 30,28,996/- being found not confirmed. Ld. AO relied Explanation 1 of Section 41 and added the difference amount to the total income and the same were sustained by the ld. CIT(A). Therefore, assessee has come in appeal raising following grounds :- “1. That on the facts and circumstances of the case and in law, the Ld. CIT(A)-22, Delhi erred in confirming the order of the Assessing Officer making a disallowance of Rs. 19,63,146/- being expenditure claimed u/s. 37(1) of the I.T. Act, under the provision of section 40(a)(ia) of the I.T. Act, 1961, on account of non deduction of tax at source. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A)-22, Delhi erred in confirming the order of the Assessing Officer in making addition of Rs.30,28,996/- being the difference between balance as per the assessee and balance as per confirmation by the parties u/s. 41(1) of the I.T. Act, 1961. 3. That the Ld. CIT(A)-22, Delhi is sustaining the above disallowance/addition has not appreciated the submission/evidence filed by the appellant before the assessing officer and in appellate proceeding. The order on this count in vitiated and the addition are liable to be deleted. 4. That the assessee prays for leave to add, amend, alter or withdraw any of the Grounds of Appeal either before or at the time of hearing of the appeal” 3. At the same time, the Ld. AO had inquired into the unsecured loan of Rs. 30,00,000/- received by the assessee from Sh. K.M.Kshetry for which the assessee claimed that it had received a tender from HUDA Gurugram, for which Rs. 35 lakhs earnest money was deposited directly by the Director by issuance of FDR from his savings bank account no. 17025 and the assessee booked the same as loan in its account. However, Ld. AO found same not supported with documentary evidence and added the same u/s 68 of the Income Tax Act but in appeal the ld. CIT(A) had deleted the same. ITA No.306 & Ors. 4 3.1 Further the Ld. AO had issued notices u/s 133(c)(6) to various sundry creditors and based upon their responses as the assessee could not furnish the ITR details of their parties or bank statements to prove the genuineness of these parties. The AO invoked Explanation 1 of Section 41 of the Act considering them to be remission of trading liability added sum of Rs. 1,52,47,641/- by way of disallowance. 4. However, in appeal, Ld. CIT(A) had taken into consideration the evidence submitted by the assessee and deleted the addition. The revenue has come in appeal raising following grounds :- “1. Whether on facts and in the circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 35,00,000/- u/s 68 of the Income Tax Act, 1961 2. Whether on the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 1,52,47,641/- u/s 41(1) of the Income Tax Act, 1961 in respect of various sundry creditors. 3. The appellant craves, leave or reserving the right to amend, modify, alter, add or forego any ground (s) of appeal at any time before or during the hearing of this appeal.” 5. Heard and perused the record. 6. Ground no. 1 in appeal of assessee ITA No.306/Del/2020. It can be observed that Ld. CIT(A) while referring to Section 40(a)(ia) of the Act has held that if the tax is deducted in any subsequent year, the expenditure will be deducted in the year in which TDS will be deposited by the assessee. As admittedly assessee could not establish that tax was not deducted in the relevant previous year and merely claimed that it was deposited on 05.10.2010 i.e. before extended due date of filing return on 15.10.2010. The assessee will be entitled to deduction of expenditure in the subsequent year in ITA No.306 & Ors. 5 which TDS is deposited. Accordingly, no interference is required in the findings of Ld. CIT(A). The issue is decided against the assessee. 7. Ground no. 2 in appeal of assessee ITA No.306/Del/2020. It can be observed that Ld. AO had invoked Explanation 1 of Section 41 of the Act on presumed remission of trading liability of Rs. 30,28,996/-. However, Ld. CIT(A) confirmed the same on the basis that there is nothing in the form of evidence to substantiate the claim of assessee. What is relevant is that while determining this ground of addition of Rs. 30,28,996/-. The Ld. CIT(A) in para 9.1 as observed. “9.1 In appeal it is submitted that this addition has been made purely on the basis of the enquiries made behind the back of the appellant. The appellant has again relied on its submissions dated 18.03.2013 in support of its case that the provisions of section 41(1) of the I.T. Act, 1961 cannot be applied. The finding of the AO on this issue in the remand report is as follows: 6. As regard to the addition on account of sundry creditors to the tune of Rs.1,52,47,641/- & Rs.30,28,996/-,during the course assessment proceedings notice u/s 133(6) were issued to various to sundry creditors, some of the parties responded and submitted their confirmation and some of the notices were returned back by the postal department. However, AO had given an opportunity to the assessee to file the confirmations of the defaulter parties. The assessee had filed its submission vide letter dated 18.03.2013 and stated that they are genuine business transaction, but failed to substantiate the addressee or other details of the parties for confirmation. Thereafter, L. AO had added back the amount to the total income of the assessee. Even at the stage of appellate proceedings the assessee has produced only Ledger account and no authenticity of the same can be examined without ITA No.306 & Ors. 6 supporting evidentiary document. The assessee has not submitted the any other details to substantiate the genuineness and creditworthiness of the transaction. Therefore, the Ledgers given by the assessee on account of sundry creditors are also liable to be rejected. ” 8. Now as a matter of fact Ld. CIT(A) while dealing with other additions made by Ld. AO for a sum of Rs. 1,52,47,641/- u/s 41(1) of the IT Act has deleted the addition while observing that there was evidence on record by virtue of letter dated 18.03.2013 submitted before the Ld AO. However, Ld. CIT(A) had failed to consider relevant matter to decide this addition. 9. In this context it was submitted on behalf of the assessee that the balance as per the assessee was not Rs. 20,99,479/- but Rs. 51,28,475/- only and without any evidence the balance as per the assessee has been shown to be Rs. 20,99,479/-. Relying copy of letter dated 18.03.2013 placed on record it was submitted that in regard to confirmation from M/s. Steel Grace India Pvt. Ltd. Annexure 1, balance confirmation as on 31.03.2010 to the tune of Rs. 51,28,475/- was placed. The assessment order however, mentions that the difference in confirmation was confronted to the assessee on 28.12.2010 and the authorized representative of the assessee had offered the same taxation. This fact is not otherwise established from any matter. Thus, the issue needs to be restored to the files of Ld. AO to take into consideration the confirmation submitted by the assessee from M/s. Steel Grace India Pvt. Ltd. and tendered along with the letter dated 18.03.2013 and thereupon decided the disputed addition of Rs. 35,00,000/- afresh. Accordingly, ground no. 2 and 3 are decided in favour of the assessee for statistical purposes. 10. In regard to ground no. 1 in appeal of revenue ITA no. 837/Del/2020. It was submitted on behalf of the Revenue that Ld. CIT(A) has ITA No.306 & Ors. 7 fallen in error in deleting the addition. It was submitted that Ld. CIT(A) failed to appreciate that in regard to the amount deposited with HUDA in 2005, the assessee introduced it as a loan only year, 2010. It was submitted that the information available in the impugned order does not show if Ld. CIT(A) had taken into consideration the fact as to in whose name the draft was prepared and tendered with HUDA and what was the source of Sh. K.M. Kshetry. It was submitted even the question of payment of interest on the fixed deposited required indulgence of the Tax Authorities and therefore the issue having loose ends should be restored for verification. 11. On behalf of the assessee it was submitted that the amount of Rs. 35,00,000/- was deposited by one of the Directors Sh. K.M. Kshetry directly with HUDA, though on behalf of the company however, due to inadvertence it could not be reflected in the accounts and only when the letter dated 22.03.2010 was received from HUDA informing that the earnest money Rs.35,00,000/- deposited by way of draft by Director Mr. K. M. Kshetry has been adjusted against the security deposit. The assessee company acknowledged its liability of loan in the books. It was also submitted that this loan was repaid immediately on 24.12.2010 in the next financial year. 12. Appreciating the matter on record it can be observed that the fact of repayment of loan to the Director on 24.12.2010 is not disputed as is also reflected in para no. 7.4 of the order of ld. CIT(A). On behalf of the assessee a copy of ledger account of the Director is placed on record which shows repayment of loan to the extent of Rs. 42,09,601/-. Thus, assessee justifies the entry of loan made on 31.03.2010 by general voucher entry after receiving letter dated 22.03.2010 form HUDA. The Ld. AO had made the addition primarily on the basis of lack of documentary evidence which were sufficiently produced before Ld. CIT(A) and where rightly taken into ITA No.306 & Ors. 8 consideration to delete the addition. The submissions raised before this Bench on behalf of the Revenue have no substance as Ld. CIT(A) having co- terminus powers with Ld. AO had duly considered the evidence of assessee. Accordingly, this ground is decided against the Revenue. 13. In regard to ground no. 2 in appeal of revenue ITA no. 837/Del/2020. It can be observed that in para no. 8.1. Ld. CIT(A) mentions that relevant information was submitted by the assessee vide letter dated 18.03.2013 but same were not taken into consideration by Ld. AO. He has specifically mentioned that assessment record was called and it was found that confirmation from four creditors in which additions were made were submitted by the appellant before Ld. AO vide letter dated 18.03.2013. The letter dated 18.03.2013 has also been placed before this bench and it shows that annexure 2 to 5 being letters of confirmations were submitted before the Ld AO also but he did not take them into consideration. The subsequent payment to these creditors add genuineness to them and Ld. CIT(A) has rightly deleted the addition and there is no substance in the ground raised by the Revenue. Consequently, the same is decided against the assessee. 14. In the light of aforesaid, the appeal of revenue is dismissed and the appeal of assessee is allowed partly with consequential effects to be given by Ld. AO, in regard to findings on ground no. 2 in appeal of the assessee. Order pronounced in the open court on 29 th September, 2022. Sd/- Sd/- (DR. B.R.R.KUMAR) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 29 th .09.2022 *Binita, SR.P.S* Copy forwarded to: 1. Appellant ITA No.306 & Ors. 9 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI
