ITO, New Delhi V. M/s Rajasthan Iron Traders, New Delhi

ITA 956/DEL/2013

• Counselvise Citation: 95620114 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 13-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 15-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F, NEW DELHI) BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 956/DEL/2013 ASSESSMENT YEAR : 2009-10 ITO, WARD 27(1), VS. M/S. RAJASTHAN IRON TRADERS , NEW DELHI Y-175, LOHA MANID, NARAINA, NEW DELHI-110 028 GIR / PAN:AAAFR8914N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIKRAM SAHAY SR. DR RESPONDENT BY : SHRI RANJAN CHOPRA, CA ORDER PER T.S. KAPOOR, AM: 1. THIS IS REVENUES APPEAL AGAINST THE ORDER OF LD . CIT(A) DATED 05.12.2012. THE ONLY GROUND TAKEN BY REVENUE IS TH E ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED ADDITION OFRS.37.80 LACS MADE BY A.O. ON ACCOUNT OF REBATE AND DISCOUNTS. 2. AT THE OUTSET, LD. D.R. SUBMITTED THAT LD. CIT(A ) HAS DELETED THE ADDITION MADE BY A.O. BY REFERRING TO SOME MEETING HELD ON 12.04.2008 AT A-26, UDYOG NAGAR, NEW DELHI. HOWEVE R ASSESSMENT ORDER DOES NOT CONTAIN ANYTHING REGARDING THIS AND NEITHER ASSESSEE HAD FILED ANY PAPER BOOK TO SUPPORT HIS CASE. 3. LD. A.R. ON THE OTHER HAND SUBMITTED THAT ALL DE TAILS WERE FILED WITH THE A.O. BUT HE DID NOT MENTION THE SAME IN THE ASS ESSMENT ORDER AND IN THIS RESPECT, HE FILED A COPY OF LETTER DATED 14 .04.2008 WRITTEN BY ITA NO.956/DEL/2013 2 ASSESSEE TO M/S. GLOBE ENGINEERS WHICH WAS OBTAINED FROM THE RECORDS OF A.O. THEREFORE, LD. A.R. SUBMITTED THAT ASSESSEE HAD ALLOWED REBATE AND DISCOUNTS TO ONE OF ITS DEALER A FTER HAVING DISCUSSION REGARDING DEFECTIVE SALES IN AN EARLIER YEAR. IT WAS SUBMITTED THAT AMOUNT WAS DEBITED IN THE YEAR UNDER CONSIDERATION AS THE LIABILITY CRYSTALLIZED IN THE YEAR ONLY.. 4. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEELS. DURING THE YEAR, THE A SSESSEE HAD DEBITED TO ITS P & L ACCOUNTS AMOUNTING TO RS.37.80 LACS FO R REBATE AND DISCOUNTS ALLOWED TO M/S. GLOBAL ENGINEERS FOR DEFE CTIVE MATERIAL SUPPLIED DURING FINANCIAL YEAR 2007-08. THE A.O. D ID NOT ALLOW THE EXPENSES HOLDING THAT THE SAME WERE PRIOR PERIOD EX PENSES AND WAS NOT ALLOWABLE AS THE ASSESSEE WAS FOLLOWING MERCANT ILE SYSTEM OF ACCOUNTING. THE OPERATIVE PART OF THE ASSESSMENT O RDER IS REPRODUCED BELOW: 4. FURTHER ON PERUSAL OF REBATE & DISCOUNT IT WAS OBSERVED THAT THE ASSESSEE HAS DEBITED A SUM OF RS. 37,80,000/- O N 21.05.2008 TO M/S GLOBAL ENGINEERS FOR COMPENSATION AGAINST DEFEC TIVE MATERIAL SUPPLIED DURING THE F.Y. 2007-08. NO, EVIDENCES & J USTIFICATION HAS BEEN FILED BY THE ASSESSEE REGARDING THAT. OTHERWIS E ALSO ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND THE E XPENSES PERTAINED TO F Y 2007-08 WHICH IS PRIOR PERIOD EXPENSES. THE ASSESSEE HAS FILED A LETTER DATED 28.12.2011WNLCH IS NOT ACCEPTABLE ON THE MERITS AS DISCUSSED ABOVE. SINCE ASSESSEE HAS FURNISHED INACC URATE PARTICULARS, PENALTY PROCEEDINGS U/S 271 (1 )(C) ARE INITIATED S EPARATELY. (ADDITION RS. 37,80,000/-) . ITA NO.956/DEL/2013 3 5. BEFORE LD. CIT(A), THE ASSESSEE SUBMITTED COMPLE TE DETAILS REGARDING REBATE AND DISCOUNTS ALLOWED TO M/S. GLOBAL ENGINEE RS. IT WAS SUBMITTED THAT THE CREDIT NOTE TO M/S. GLOBAL ENGIN EERS WAS ALLOWED IN THE YEAR UNDER CONSIDERATION AND THE SAME WAS ISSUE D ON ACCOUNT OF SUPPLIES OF DEFECTIVE MATERIAL IN THE EARLIER YEAR AFTER A LONG CORRESPONDENCE TOOK PLACE BETWEEN THE PARTIES, THE ISSUE WAS FINALLY SETTLED IN A MEETING HELD ON 12.04.2008. SINCE THE ISSUE WAS SETTLED IN THE YEAR UNDER CONSIDERATION, THEREFORE, THE SAME C ERTAINLY RELATES TO THE YEAR UNDER CONSIDERATION. IT WAS FURTHER SUBMI TTED THAT THE ASSESSEE HAD BEEN FOLLOWING ACCOUNTING STANDARD AS- 5 WHICH DEALS WITH PRIOR PERIOD INCOME AND EXPENSES AND WHICH DEF INES PRIOR PERIOD ITEMS AS THOSE ITEMS WHICH ARE BOOKED IN A CURRENT YEAR AS A RESULT OF ERROR COMMITTED IN THE PREPARATION OF FINAL STATEME NT OF EARLIER YEAR. IT WAS SUBMITTED THAT IN THE PRESENT YEAR, THE LIABILI TY HAD CRYSTALLIZED. THE LD. CIT(A) HAS ALLOWED RELIEF TO ASSESSEE BY HO LDING AS UNDER: 6. AFTER HAVING CAREFULLY CONSIDERED THE ASSESSMEN T ORDER, THE SUBMISSIONS MADE BY THE APPELLANT AS WELL AS THE CA SE LAWS CITED BY IT, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT I S ENTITLED TO EXPENDITURE OF RS.37,80,0001- UNDER THE HEAD REBATE & DISCOUNT DURING THE CURRENT ASSESSMENT YEAR I.E. A.Y. 2009-1 0, ALTHOUGH, THE MATTER WAS PERTAINING TO A.Y. 2008-09, BUT THE DISP UTE REGARDING THE SAME GOT SETTLED DURING A.Y. 2009-10 AND THE LIABIL ITY OF THE APPELLANT GOT CRYSTALLIZED DURING A.Y. 2009-10. THEREFORE, RE SPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CAS E OF TRIVENI ENGINEERING (SUPRA) AND IN VIEW OF THE FACTS AND CI RCUMSTANCES OF THE CASE, THE GROUND OF APPEAL IS ALLOWED. ITA NO.956/DEL/2013 4 6. WE FIND THAT LD. CIT(A) HAS ALLOWED RELIEF ON TH E BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE AND WE DO NOT FIND ANY IN FIRMITY IN THE SAME. 7. IN VIEW OF ABOVE, APPEAL FILED BY REVENUE IS DIS MISSED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JAN., 2015. SD./- SD./- (H. S. SIDHU ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 16 TH JAN., 2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 14/1 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 14, SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 16/1 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 16/1 SR. PS/PS 7 FILE SENT TO BENCH CLERK 16/1/15 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER