Income Tax Appellate Tribunal - Delhi
Veenu Kapoor, Prop., New Delhi vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "D" NEW DELHI
BEFORE SHRI D.K. TYAGI AND SHRI B.C. MEENA
ITA No. 4841/Del/11
A.Y. 2001-02
DCIT Cir. 26(1), Vs. Smt. Venu Kapoor,
New Delhi. Prop. M/s Shirdi Exports,
J-114, Rajouri Garden,
New Delhi-110027.
PAN/ GIR No. AAOPK0213F
C.O. No. 15/Del/2012
( In ITA No. 4841/Del/11)
A.Y. 2001-02
Smt. Venu Kapoor, Vs. DCIT Cir. 26(1),
Prop. M/s Shirdi Exports, New Delhi.
J-114, Rajouri Garden,
New Delhi-110027.
( Appellant ) ( Respondent )
Department by : Ms. Veena Joshi DR
Assessee by : Shri Ashwani Taneja Adv.
ORDER
PER D.K. TYAGI, J.M::
These are revenue's appeal and assessee's cross objections assailing CIT(A)'s order dated 29-8-2011, relating to A.Y. 2001-02.
2. At the hearing learned counsel for the assessee did not press cross objections filed by the assessee. Accordingly, assessee's cross objections stand dismissed, being not pressed.
3. Effective ground raised by the Revenue's in its appeal is as under:
"On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made by the 2 Assessing Officer on account of local sales made to M/s AIM Concepts amounting to Rs. 22,14,385/-.
4. Facts, in brief, are: The assessee is a proprietor of an export oriented concern named M/s Shirdi Exports. For A.Y. 2001-02 she filed her return disclosing income of Rs. 6,84,885/-. During assessment proceedings Assessing Officer noticed that one M/s Aim Concepts in its P&L A/c had debited Rs. 22,14,385/- in the name of M/s Shirdi Exports, whereas this amount was not disclosed in sales by M/s Shirdi Exports in its P&L A/c. On being confronted, the assessee submitted revised P&L A/c disclosing sales of Rs. 22,14,835/- to M/s Aim concepts and debited corresponding amounting in the purchase Assessing Officer. The Assessing Officer did not accept the contention and made an addition of Rs. 22,14,835/- to the income of the assessee. In first appeal the CIT(A) confirmed the action of Assessing Officer. In second appeal, the ITAT set aside the mater to the file of Assessing Officer to examine the matter afresh.
4. In set aside proceedings the Assessing Officer observed that assessee had not shown sales of Rs. 22,14,385/- in her books of a/cs and added the same to her income. In appeal before CIT(A) the assessee explained that M/s Shirdi Exports had received order of export of a particular category of garments from M/s Bubbles Inc.; assessee did not have requisite quota allotted by AEPC for that particular category of garments, therefore, to complete the export order, they had to buy the quota from open market. On inquiry, it revealed that M/s Aim Concepts was having quota allotted by AEPC for that particular category. However, such quota available was non- transferable, therefore, M/s Shirdi Exports, as per standard commercial practice in the garmnent export industry, prepaed the document of export in 3 the name of M/s Aim Concepts and shift the goods to the importer M/s Bubbles Inc. in the name of M/s Aim Concepts. Ld. counsel submitted that M/s Shirdi Exports had not given any delivery of goods to M/s Aim Concepts and the goods were directly exported to M/s Bubbles Inc. from the factory of M/s Shirdi Exports. All purchases of fabric and other items were made by M/s Shirdi Export and the amount was debited to purchase A/c. and the revenue received on a/c of above export order was credited to the purchase and respective expenses a/cs. The revenue received was Rs. 22,14,385/- by raising a debit note on M/s Aim Concepts and this included the profit element. According to ld. counsel even by this method of accounting there was no loss of revenue to the ex-chequer and there was no double claim of purchases or expenses.
6. CIT(A) deleted the addition, inter alia, observing as under:
"4.2. It is common knowledge in the export market that Quota for export of garments allocated by AEPC, based on the past performance of the exporter, is available openly and also that there ae specialized brokers who del exclusively in AEPC Quota. Therefore, the statement of facts made by the appellant is neither an unbelievable store, nor a colourable device. The AO made the addition of Rs. 22,14,885/- to the income of the appellant in the first place because he could not find this amount in the name of M/s Aim Concepts in the sales list of the appellant. This ws primarily because of the accounting method adopted by the appellant. Even this method of accounting followed by the appellant was revnue neutral. The appellant haas submitted both the original P&L A/c. (where purchases and expenes were adjusted) and the revised P&L A/c. (wher the sales have been shown and the corresponding purchaes and expenses have also been shown). By booth the above mehod, the gross profit remains the same. The only difference that occurs is in the calculation of deduction u/s 88HHC of the Act, after taking into consideration the sales made through M/s Aim Concepts. The appellant has submitted the original calculation 4 u/s 80-HHC, a per which the deduction claimed came to Rs. 24,07,957/-. She has even submitted the revised calculation of 80HHC after taking into account the sale made throug M/s Aim Concepts, as per which the deduction claimed comes to Rs. 23,07,499/-. The difference between the two is Rs. 1,00,458/-, which is required to be disallowed and added back to the income of the appellant. After having carefully perused the ledger extracts of exports through M/s Aim Concepts and the copies of the debit notes and their accounting and the books by the appellant, it is clear that double claim of expenses has been made. Thus, the addition of Rs. 22,14,385/- is not justified in my opinion and, therefore, deleted. The only disallowance required to be made amounts to Rs. 1,00,458/- out of the claim of deduction u/s 80HHC made by the appellant."
7. Aggrieved, Revenue is in appeal before us.
8. Ld. DR relied on the order of Assessing Officer .
9. Learned counsel for the assessee, on the other hand, contended that Assessing Officer made the addition to the income of the assessee because in first place he could not find the impugned amount in the name of M/s Aim Concepts in the sales list of the assessee. This was because of the accounting method adopted by the assessee. More over by adopting this method there was no loss to the Revenue. The only difference in calculation of deduction u/s 80-HHC amounting to Rs. 1,00,458/- has been retained by the CIT(A). He relied on the order of CIT(A), deleting the addition in question.
10. We have heard rival contentions and gone through the relevant material available on record. CIT(A) while deleting the addition in question has observed that assessee had not claimed double expenses and there was no loss to the revenue by the method of accounting followed by the assessee. The addition on account of difference in calculation of deduction u/s 80- HHC has been retained by the CIT(A). Thus we see no flaw or infirmity in 5 the order of CIT(A) to take a different view in the matter. Accordingly, order of CIT(A) on the issue in question is upheld.
11. In the result, revenue's appeal as well as assessee's cross objection are dismissed.
Order pronounced in open court on 27-7-2012.
Sd/- Sd/- ( B.C. MEENA ) ( D.K. TYAGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27-7-2012. MP Copy to : 1. Assessee 2. AO 3. CIT 4. CIT(A) 5. DR