JIGSAW PICTURES P.LTD, MUMBAI V. ITO 8(2)(3), MUMBAI

ITA 956/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3077 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2007-2008
• Appeal Filed On: 10-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 956/MUM/2014 (ASSESSMENT YEAR : 2007-08) JIGSAW PICTURES P. LTD. 28, AAEARM NAGAR, PHASE- II, J.P.ROAD, MUMBAI VERSOVA, ANDHERI (W), MUMBAI 400 061. PAN: AABCJ 5158J ... APPELLANT VS. THE I.T.O 8(2)(1), AAYKAR BHAVAN, MK ROAD, MUMBAI 400 038 .... RESPONDENT APPELLANT BY : SHRI NITESH JOSHI RESPONDENT BY : SHRI ABANI KANTA NAYA K, DATE OF HEARING : 23/07/2015 DATE OF PRONOUNCEMENT : 23/10/2015 ORDER PER G.S. PANNU,AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS DI RECTED AGAINST THE ORDER OF THE CIT(A)-17, MUMBAI DATED 04/11/2013, P ERTAINING TO THE ASSESSMENT YEAR 2007-08, WHICH IN TURN HAS ARISEN F ROM AN ORDER PASSED BY THE ASSESSING OFFICER DATED 28/10/20 12 UNDER SECTION 143(3) R.W.S 147 OF THE INCOME TAX ACT 1961 ( IN SHORT THE ACT). 2 ITA NO. 956/MUM/2014 (ASSESSMENT YEAR : 2007-08) 2. IN THIS APPEAL, ALTHOUGH ASSESSEE HAS RAISED MUL TIPLE GROUNDS OF APPEAL, BUT THE SOLITARY DISPUTE IS WITH REGARD TO AN ADDITION OF RS.12,10,173/- MADE TO THE RETURNED INCOME ON ACCOU NT OF PROFESSIONAL RECEIPTS. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE APPELLANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE CO MPANIES ACT, 1956 AND IS, INTER-ALIA, ENGAGED IN THE PRODUCTION OF AD VERTISING FILMS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE F URNISHED A RETURN OF INCOME DECLARING TOTAL INCOME AT NIL, WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE ASSES SMENT WAS RE-OPENED UNDER SECTION 147/148 ON 27/3/2012 IN ORDER TO BRIN G TO TAX CERTAIN INCOME CHARGEABLE TO TAX WHICH HAD ESCAPED ASSESSME NT. AS PER THE AO THE TOTAL RECEIPTS CREDITED IN THE P&L ACCOUNT W AS RS.1,10,68,817/-, WHEREAS THE TDS CERTIFICATE IN RESPECT OF WHICH CR EDIT FOR RS.4,63,376/- WAS CLAIMED, SHOWED THE CORRESPONDING RECEIPTS OF R S.1,22,78,990/-, THEREBY REFLECTING A DIFFERENCE OF RS.12,10,173/- V IS-A-VIS THE RECEIPTS CREDITED IN THE P&L ACCOUNT. IN THE IMPUGNED ASSES SMENT PROCEEDINGS, THE ASSESSEE EXPLAINED THE DIFFERENCE WITH REGARD T O THE PROFESSIONAL RECEIPTS FROM TWO CONCERNS NAMELY, MULTI SCREEN ME DIA P LTD.(FORMERLY KNOWN AS SET INDIA P LTD) AND THE INDIAN HOTEL COMP ANY LTD. THE EXPLANATION WAS THAT IN THE CASE OF THE SAID CON CERNS, THE ASSESSEE HAD CREDITED THE DIFFERENTIAL RECEIPTS IN THE P&L A CCOUNT PERTAINING TO THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, WHEREAS THE SAID CONCERNS DEDUCTED TAX SOURCE IN THE SUBSEQUENT PERIOD I.E. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDER ATION AND ACCORDINGLY, THE TDS CERTIFICATES WERE ISSUED IN TH E INSTANT ASSESSMENT YEAR. IN FACT, THE PLEA OF THE ASSESSEE WAS THAT I NCOME CORRESPONDING TO 3 ITA NO. 956/MUM/2014 (ASSESSMENT YEAR : 2007-08) THE TDS CERTIFICATES WAS INDEED OFFERED FOR TAX, ALBEIT IN THE PRECEDING ASSESSMENT YEAR IN RELATION TO THE DIFFERENTIAL WIT H RESPECT TO THE TWO CONCERNS I.E. MULTI SCREEN MEDIA P LTD. AND THE INDIAN HOTEL COMPANY LTD. AS PER THE ASSESSEE, AFTER CONSIDERIN G THE AFORESAID, THERE WOULD NOT REMAIN ANY DIFFERENCE BETWEEN THE P ROFESSIONAL RECEIPTS CREDITED TO P&L ACCOUNT AND THE PROFESSION AL RECEIPTS RELATABLE TO THE TDS CERTIFICATE FOR WHICH CREDIT WAS CLAIM ED IN THE RETURN OF INCOME. THE EXPLANATION OF THE ASSESSEE HAS BEEN NO TICED BY THE ASSESSING OFFICER AND IS FOUND TABULATED IN PARA-4. 3 OF THE ORDER. 3. THE EXPLANATION FURNISHED BY THE ASSESSEE DID NO T FIND FAVOUR WITH THE ASSESSING OFFICER AND EVEN THE CIT(A) AND, THEREFORE, THE DIFFERENCE OF RS.12,10,173/- HAS BEEN ADDED TO THE RETURNED INCOME OF THE ASSESSEE. AGAINST SUCH AN ACTION OF THE INCOME TAX AUTHORITIES, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSES SEE HAS REFERRED TO THE MATERIAL FURNISHED BEFORE THE LOWER AUTHORIT IES, COPIES OF WHICH HAVE BEEN PLACED IN THE PAPER BOOK FILED BEFORE US. ON THE SAID BASIS, IT IS SOUGHT TO BE POINTED OUT THAT THE OTHER TWO CONC ERNS, NAMELY, MULTI SCREEN MEDIA (P) LTD. AND THE INDIAN HOTEL COMPA NY LTD. HAVE DEDUCTED THE TAX AT SOURCE AT THE TIME OF PAYMENTS TO THE ASSESSEE AND ACCORDINGLY, ISSUED THE TDS CERTIFICATES, WHEREAS T HE ASSESSEE HAD ACCOUNTED FOR SUCH INCOME IN THE IMMEDIATELY PRECED ING ASSESSMENT YEAR AS PER ITS METHOD OF ACCOUNTING. IN THIS CO NTEXT, REFERENCE HAS BEEN MADE TO THE COMPUTATION OF INCOME FILED FOR TH E IMMEDIATELY PRECEDING ASSESSMENT YEAR AS WELL AS THE LEDGER ACC OUNT OF THE TWO CONCERNS FOR THE PRECEDING AS WELL AS THE INSTANT A SSESSMENT YEAR. IT 4 ITA NO. 956/MUM/2014 (ASSESSMENT YEAR : 2007-08) HAS ALSO BEEN POINTED OUT THAT THE RUNNING ACCOUNT OF THE TWO CONCERNS WOULD SHOW THAT THE INCOME CORRESPONDING TO THE TDS CERTIFICATES IN QUESTION HAVE BEEN CREDITED TO P&L ACCOUNT OF THE I MMEDIATELY PRECEDING ASSESSMENT YEAR . 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE APPEARING FOR THE REVENUE HAS REITERATED THE STAND OF THE LOWER AUTHORITIES AND, IN PARTICULAR THE DISCUSSION MADE BY THE CIT(A) IN PARA 1.3.1 OF HIS ORDER, WHEREBY IT IS POINTED OUT THAT THERE WERE TWO ENTRIES OF RS.3,30,600/- EACH ON 28/2/2006 AND 18/04/2006 I N THE CASE OF INDIAN HOTEL COMPANY LTD. AND, THEREFORE, IT COULD NOT BE SAID THAT THE INCOME WAS ALREADY OFFERED BY THE ASSESSEE IN PREC EDING ASSESSMENT YEAR. IT WAS, THEREFORE, CONTENDED THAT THE DISCRE PANCY COULD NOT BE APPROPRIATELY RECONCILED BY THE ASSESSEE AND, THER EFORE, THE LOWER AUTHORITIES WERE JUSTIFIED IN ADDING THE DIFFEREN TIAL OF RS.12,09,173/- TO THE RETURNED INCOME. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. OSTENSIBLY, THE PLEA OF THE ASSESSEE WAS THAT THE DIFFERENCE O F RS.12,09,173/- SHOULD NOT BE ADDED TO THE RETURNED INCOME AS IT WO ULD AMOUNT TO DOUBLE TAXATION, SINCE SUCH SUM HAS ALREADY BEEN OF FERED FOR TAX IN THE RETURN OF INCOME FILED FOR THE IMMEDIATELY PRECEDIN G ASSESSMENT YEAR OF 2006-07. IN THIS CONTEXT, WE HAVE PERUSED THE M ATERIAL RELIED UPON BY THE ASSESSEE, COPIES OF WHICH HAS BEEN PLACED I N THE PAPER BOOK FILED BEFORE US. THE MATERIAL CLEARLY ESTABLISHES THAT THE DIFFERENTIAL OF RS.12,09,173/- NOTED BY THE ASSESSING OFFICER HAS I NDEED BEEN OFFERED TO TAX ON ACCOUNT OF PROFESSIONAL RECEIPTS FROM MULTI SCREEN MEDIA (P) LTD. AND INDIAN HOTEL COMPANY LTD. THE DISCREPANC Y NOTED BY THE 5 ITA NO. 956/MUM/2014 (ASSESSMENT YEAR : 2007-08) CIT(A) AND ALSO CANVASSED BY THE LD. DEPARTMENTAL R EPRESENTATIVE BEFORE US ON ACCOUNT OF TWO ENTRIES OF RS.3,30,600/ - EACH ON 28/2/2006 AND 18/4/2006 IS ALSO UNFOUNDED IN AS MUCH AS THEY ARE SEPARATE AMOUNTS RECEIVED BY THE ASSESSEE, WHICH IS CLEARLY EMERGING FROM THE LEDGER ACCOUNT OF THE INDIAN HOTEL COMPANY LTD., PE RTAINING TO THE PRECEDING ASSESSMENT YEAR AND THE CURRENT ASSESSME NT YEAR. AT PAGE- 11 OF THE PAPER BOOK, WHEREIN IS PLACED PARTY WISE DETAILS OF THE TOTAL PROFESSIONAL RECEIPTS CREDITED TO THE P&L ACCOUNT O F THE PRECEDING ASSESSMENT YEAR, WHICH ALSO SUPPORTS THE ASSERTIO NS OF THE ASSESSEE. THEREFORE, CONSIDERING THE MATERIAL ON RECORD, IN O UR VIEW, THE LOWER AUTHORITIES HAVE MISDIRECTED THEMSELVES IN MAKING A DDITION OF RS.12,10,173/- TO THE RETURNED INCOME, WHICH IS H EREBY DIRECTED TO BE DELETED. 7. SINCE THE ASSESSEE HAS SUCCEEDED ON THE MERITS O F THE DISPUTE, THE OTHER PLEA RELATING TO THE VALIDITY OF THE PROC EEDINGS INITIATED BY ISSUANCE OF NOTICE UNDER SECTION 147/148 OF THE ACT IS RENDERED ACADEMIC AND, THEREFORE, DOES NOT REQUIRE ANY ADJUD ICATION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/ 10/2015. SD/- SD/- (SANJAY GARG) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 23/10/2015 6 ITA NO. 956/MUM/2014 (ASSESSMENT YEAR : 2007-08) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS