ACIT, Chandigarh V. M/s Delta Information Service (P) Ltd., Chandigarh

MA 54/CHANDI/2007

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7970 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 5 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-05-2012
• Assessment Year: 1997-1998
• Appeal Filed On: 09-12-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AHKILESH GUPTA
• Assessee Lawyers: RAVINDER BINDLISH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI T.R.SOOD, ACCOUNTANT MEMBER M.A NO. 54/CHD/2007 (IN ITA NO. 31/CHD/2002) ASSESSMENT YEAR: 1997-98 THE ACIT, VS M/S DELTA INTERNATIONAL SERVICE(P) LTD, CIRCLE 4(1), CHANDIGARH CHANDIGARH PAN NO. AABCD2944EV (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AHKILESH GUPTA RESPONDENT BY : SHRI RAVINDER BINDLISH DATE OF HEARING : 18.05.2012 DATE OF PRONOUNCEMENT : 22.05.2012 ORDER PER H.L.KARWA, VP THIS MISC. APPLICATION BY THE REVENUE ARISES OUT OF THE ORDER OF THE TRIBUNAL DATED 23.3.2005 PASSED IN ITA NO. 31/CHD/2 002 RELATING TO ASSESSMENT YEAR 1997-98. 2. THE ASSTT. CIT, CIRCLE-4(1) CHANDIGARH VIDE HIS APPLICATION DATED 8.12.2005 HAS STATED AS UNDER:- 1. THE HON'BLE ITAT HAVE PASSED ORDER DATED 23.3.05 IN ITA NO.31/CHD/2002 IN THE CASE OF M/S DELTA INFORMATION SERVICE (P) LTD FOR THE 2 A.Y 1997-98.THE REVENUE HAD TAKEN THE FOLLOWING GRO UNDS OF APPEAL IN RESPECT OF FEES RECEIVED FROM STUDENTS WHICH IS REP RODUCED AS UNDER :- ' ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) VIDE ORDER DATED 10.10.2001 IN APPEAL NO. 7091/2000-01 HAD ERR ED IN DELETING ADDITION OF RS.26,00,890/- REPRESENTING FEES RECEIV ED FROM STUDENTS' 2. THE HON'BLE ITAT HAVE DECIDED THE ISSUE AGAINST THE REVENUE. THE OBSERVATIONS OF THE HON'BLE ITAT IN PARA 7 OF T HEIR ORDER ARE REPRODUCED AS UNDER :- ' 7. CONSIDERING THE FACTS OF THE CASE, IT IS CLEAR THAT ASSESSEE ENTERED INTO AN AGREEMENT WITH M/S NIIT THROUGH WHICH FEES ARE RECEIVED FROM THE STUDENTS IN ESCROW A/C WHICH IS DISBURSED BY M/ S NIIT TO THE ASSESSEE ON THE BASIS OF SERVICES PROVIDED BY ASSES SEE TO THE STUDENTS. THEREFORE, THE RECEIPT OF THE FEES CANNOT BE TREATE D AS INCOME OF THE ASSESSEE. THE DISBURSEMENT OF FEES IS SUBJECT TO TH E SERVICES PROVIDED BY THE ASSESSEE TO THE STUDENTS. THE ACCOUNT IS THUS N OT CONTROLLED BY ASSESSEE AND THE SAME ACCOUNTING SYSTEM WAS ACCEPTE D IN EARLIER YEARS AS IS ADMITTED BY BOTH THE PARTIES. THEREFORE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ENTIRE ADDITION AS THERE WAS NO ACCRUA L OF INCOME IN FAVOUR OF THE ASSESSEE ON THE BASIS OF MERE RECEIPT OF THE FEES IN THE ESCROW A/C. WE ACCORDINGLY, DO NOT FIND ANY INFIRMITY IN T HE ORDER OF THE CIT(A). WE CONFIRM THE SAME AND DISMISS THE APPEAL OF THE REVENUE' 3. IT HAS BEEN OBSERVED BY THE HON'BLE ITAT, VIDE PARA 7 OF THE ORDER, AS REPRODUCED ABOVE, THAT 'SAME ACCOUNTING SYSTEM WAS ACCEPTED IN EARLIER YEARS AS IS ADMITTED BY BOTH THE PARTIES'. 4. THIS OBSERVATION OF THE HON'BLE ITAT IS RESPECTF ULLY NOT CORRECT LOOKING TO THE FACTS OF THE CASE. THE CORRECT FACTS OF THE CASE ARE THAT THE ASSESSMENT FOR THE A.Y 1994-95 WAS FRAMED U/S 143(3) READ WITH SEC TION 147/148 AND THE ACCOUNTING SYSTEMS OF THE ASSESSEE WAS NOT ACCEPTED /NOT ONLY FOR THIS YEAR, BUT FOR THE ASSESSMENT YEAR 1993- 94, 1995-96 AND 1996- 97 THE ACCOUNTING SYSTEM OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO AND ASSE SSMENT WAS FRAMED US 143(3) READ WITH SECTION 147/148 IN EACH OF THESE Y EARS. SIMILARLY, FOR THE ASSESSMENT YEAR 1998-9, ASSESSMENT WAS MADE US 143( 3) AND ACCOUNTING SYSTEMS WAS NOT ACCEPTED. 5. THE HON'BLE ITAT IS. THEREFORE, REQUESTED TO PASS NECESSARY ORDERS US 254(2) OF THE INCOME-TAX ACT 1961 TO RECTIFY THE MI STAKE APPARENT FROM RECORDS. 3 6. THIS PETITION IS FILED WITH THE APPROVAL/AS PER DIRECTIONS OF THE WORTHY CIT-II, CHANDIGARH VIDE HIS OFFICE LETTER NO. CIT-II/CHD/MI SC.PET./761/2859 DATED 28.11.2005. THE ORDER OF THE HON'BLE ITAT WAS RECEI VED IN THE OFFICE OF THE CIT-II, CHANDIGARH ON 4 TH MAY 2005. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI RAVINDER BINDL ISH, LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE AVERMENTS MADE IN PA RA 4 OF THE APPLICATION FILED U/S 254(2) OF THE INCOME TAX ACT, 1961 (IN SH ORT 'THE ACT') ARE FACTUALLY WRONG AND, THEREFORE, THE APPLICATION OF THE REVENU E DESERVES TO BE DISMISSED. HE FURTHER SUBMITTED THAT THE ASSESSEE ENTERED INTO AN AGREEMENT WITH M/S NIIT THROUGH WHICH FEES RECEIVED FROM THE STUDENTS IN ESCROW A/C WHICH IS DISBURSED BY M/S NIIT TO THE ASSESSEE ON THE BASIS OF SERVICES PROVIDED BY ASSESSEE TO THE STUDENTS. THE DISBURSE MENT OF FEE IS SUBJECT TO THE SERVICES PROVIDED BY THE ASSESSEE TO THE STUDEN TS. THE ACCOUNT IS THUS NOT CONTROLLED BY THE ASSESSEE AND THE SAME ACCOUNTING SYSTEM WAS ACCEPTED FROM ASSESSMENT YEARS 1993-94 TO 1998-99. IN ALL THE AB OVE YEARS, THE CIT(A) AFTER APPRECIATING THE FACTS AND GENUINENESS OF THE CHANGE OF ACCOUNTING SYSTEM ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETED THE ENTIRE ADDITION. THE TRIBUNAL VIDE ITS ORDER DATED 24.6.2 005 IN ITA NOS. 230, 231 & 232/CHANDI/2003 RELATING TO ASSESSMENT YEARS 1993 -94, 1995-96 AND 1996- 97 CONFIRMED THE ORDERS OF CIT(A). IN THE YEAR UND ER CONSIDERATION ALSO, THE TRIBUNAL HAS CONFIRMED THE ORDER OF CIT(A) IN ITA N O. 31/CHANDI/2002 VIDE ITS ORDER DATED 23.3.2005. 4. SHRI RAVINDER BINDLISH, LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE REVENUE HAS NOT CHALLENGED THE ABOVE ORDERS OF THE TRIBUNAL IN APPEAL BEFORE 4 THE HON'BLE JURISDICTIONAL HIGH COURT. HE, THEREFOR E, SUBMITTED THAT THE ORDERS OF THE TRIBUNAL REFERRED TO ABOVE HAVE ATTAI NED FINALITY AND, THEREFORE, THE PRESENT APPLICATION OF THE REVENUE DESERVES TO BE DISMISSED. 5. IN OUR VIEW THERE IS A SUBSTANCE IN THE ABOVE SU BMISSIONS OF SHRI RAVINDER BINDLISH, LD. COUNSEL FOR THE ASSESSEE AND , THEREFORE, WE HOLD THAT THE MISC. APPLICATION IS WITHOUT ANY MERIT AND DESE RVES REJECTION. ACCORDINGLY, WE DISMISS THE MISC. APPLICATION FILED BY THE REVENUE. 6. IN THE RESULT, MISC. APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF MAY, 2012 SD/- SD/- (T.R.SOOD) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 22 ND MAY, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR 5