Income Tax Appellate Tribunal - Delhi
Skipper Overseas Pvt. Ltd , New Delhi vs Assessee
ITA NO. 4392/Del/2009
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "G", NEW DELHI
BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 4392/Del/2009
A.Y. : 2006-07
M/s Skipper Overseas Pvt. Ltd., vs. ITO, Ward-8(4), New Delhi
4284, Street No. 3,
Ansari Road, Daryaganj,
New Delhi - 110 002
(PAN/GIR NO. : AAACS2469N)
(Appellant ) (Respondent )
Assessee by : Sh. Salil Aggarwal, Sh. A.K.
Makhija, Sh. R.P. Mall, Advocates
& Sh. Shailesh Gupta, CA
Department by : Sh. Prabha Kant, Sr. D.R.
ORDER
PER SHAMIM YAHYA: AM This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XI, New Delhi dated 27.10.2009 pertaining to assessment year 2006-07.
2. The grounds raised read as under:-
1. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in sustaining an order of assessment under section 143(3) of the Act at an income of Rs.23,59,560/- as against returned income of Rs. 4, 74, 406/-.1
ITA NO. 4392/Del/2009
2. That the learned Commissioner of Income Tax (Appeals) further erred in law and on facts in sustaining an addition of Rs. 5,05, 835/- on account of difference in TDS certificates and the amount credited in P&L Account.
2.1 That the learned Commissioner of Income Tax (Appeals) ignored the basic fact that the appellant was maintaining its books of accounts on the basis of mercantile system of accounting and had offered the said income to tax in the previous financial year, however, TDS was deducted by the payer in the impugned financial year. Thus, the sustaining of said addition amounted to double addition of same income twice in two separate financial years, which is contrary to law and as such is liable to be deleted.
3. That the learned Commissioner of Income Tax (Appeals) further erred in law and on facts in sustaining an addition of Rs. 13,64,000/- on account of rent being claimed in P&L Account.
3.1 That the learned Commissioner of Income Tax (Appeals) ignored the basic fact that the Appellant company had correctly deducted TDS on payments of rents as envisaged under section 194 I of the Act and all the proofs regarding deposit of TDS was filed before him as additional evidences, which were duly accepted by the learned CIT (A) after calling the remand report from the learned assessing officer.
2ITA NO. 4392/Del/2009 Thus, the addition so sustained was contrary to material available on record.
3.2 That the learned Commissioner of Income Tax (Appeals) has further erred in concluding that the appellant had taken a different stand in the remand proceedings and assessment proceedings. In doing so, the learned CIT (A) ignored the fact that all the materials were placed on record by the appellant company, that too substantiated by documentary evidences. Thus, the finding of the learned CIT (A) that the appellant company has taken different stands at different stages is contrary to record and based on suspicion, surmises and conjectures.
3.3 That the learned Commissioner of Income Tax (Appeals) has further erred in not appreciating the additional evidences filed before him, which clearly brought correct facts on record and thus, as a fact finding authority the learned CIT (A) should have considered and have deleted the said addition.
3. Apropos issue of addition of ` 5,05,835/-.
The assessee company carries on the business of carrying and forwarding in the entire state in Jammu and Kashmir. The company is C&F agent for Pepsico Holdings Pvt. Ltd., Parle Products Ltd., Parle Biscuits Pvt. Ltd. and Joyco India Pvt. Ltd. During the course of assessment, Assessing Officer observed that on perusal of the P&L account, it reveals that assessee has declared the total turnover from C&F at ` 1,79,69,416/- whereas the total turnover as per TDS 3 ITA NO. 4392/Del/2009 certificates furnished came to ` 1,84,75,251/-. Thus, there was a difference of ` 5,05,835/-. The difference was explained by the assessee as under:-
"As explained the reason for difference in the above said figures during our last meeting. The assessee books income as due to it as per understanding entered between the clients and assessee during the period when it becomes due. However, the clients keep certain amounts pending for payments and make the payments after necessary clarifications and approval of its concerned officials. This results into above said difference."
However, Assessing Officer was not convinced with the above explanation. He held that since the assessee is maintaining its books of accounts on mercantile basis and the copies of TDS certificates are with the assessee company, there appears no reasons for not accounting for the total receipts in the profit and loss account. Accordingly, Assessing Officer made the addition of ` 5,05,835/-.
4. Upon assessee's appeal Ld. Commissioner of Income Tax (A) considered the issue. He also obtained the remand report from the Assessing Officer. Ld. Commissioner of Income Tax (A) has further mentioned that additional evidences were furnished and were sent to the Assessing Officer. The Assessing Officer objected the admission of the additional evidences. Ld. Commissioner of Income Tax (A) did not agree with the contention of the assessee and he held that he was of the opinion that Assessing Officer has rightly brought on record that 4 ITA NO. 4392/Del/2009 the total turnover as per the TDS certificate was much more than the total turnover disclosed by the assessee.
5. We have heard both the counsel and perused the records. We find that assessee has explained that the difference between the income shown by the assessee in the profit and loss account and as per the TDS certificate has arisen due to the fact that the income as accrued in the financial year 2004-05 relating to assessment year 2005-06 was booked by the assessee in the assessment year 2005-06. Different parties to whom assessee company is C&F agent, booked the same only in F.Y. 2005-06 relating to A.Y. 2006-07. In this regard, assessee submitted that alongwith the copies of TDS certificates, assessee also enclosed copy of ledger account of the Pepsico Holding Ltd.
6. We find that assessee's claim in this regard is that assessee is maintaining the books on mercantile system of accounting and assessee's accounts showed receivable when they are accrued. However, the parties who had to issue the TDS certificates make the payment after some time, the same becomes due, and this leads to difference between the amount credited in the profit and loss account, as per TDS certificate. In this regard, we find that ld. Counsel of the assessee has pointed out that proper explanation in this regard were given to the Assessing Officer and Ld. Commissioner of Income Tax (A). Further, ld. Counsel of the assessee referred to Paper Book Page no. 13, wherein assessee has duly given the reconciliation of year-wise income declared by the assessee for assessment year 2005-06, 2006- 07 and 2007-08. However, we find that there is no reference to the 5 ITA NO. 4392/Del/2009 reconciliation statement submitted by the assessee in order of authorities below.
7. In our considered opinion, lower authorities were not justified in making this addition. Assessee has duly explained that assessee company had booked the income in the financial year 2004-05 relating to assessment year 2005-06, but the party of whom the assessee company is C&F agent booked the same only in financial year 2005-06 relating to assessment year 2006-07. The matter was explained before the Assessing Officer and Ld. Commissioner of Income Tax (A) and assessee's reconciliation was also given. Under the circumstances, in our considered opinion, there is no justification for making this disallowance. Hence, we set aside the orders of the authorities below and decide the issue in favour of the assessee.
8. Apropos issue of addition of ` 13,64,000/- on account of rent claimed in P&L account.
On this issue assessee claimed rent of ` 13,64,000/- paid to different parties for hiring the godowns in different parts of Jammu & Kashmir. The details of the rent paid were as under:-
a) Mrs. Charanjeet Kaur ` 3,47,000/-
b) Mrs. Neekashi Bama ` 1,74,000/-
c) Sh. Ashok Bama ` 1,08,000/-
d) Sh. Joginder Singh ` 2,52,000/-
e) Sh. Arun Kumar ` 1,02,000/-
f) Mrs. Kavita Sharma ` 96,000/-
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ITA NO. 4392/Del/2009
g) Sh. V.D. Sharma ` 1,08,000/-
h) Sh. Tara Chand ` 70,000/-
i) Sh. Raj Kumar ` 70,000/-
j) Misc. Rentals ` 37,000/-
Assessing Officer disallowed the entire rent as above on various grounds including that proper TDS certificates were not submitted and the payments were hit by the rigors of section 40a(ia). In some of the payments Assessing Officer contended that no proof of rent was submitted by the assessee company. Assessing Officer opined that the payment of rent by the assessee was bogus and disallowed the entire amount.
9. Before the Ld. Commissioner of Income Tax (A) assessee submitted that there are 14 different properties. It was further submitted that among 14 properties there were certain properties where rent payment was less than ` 1,20,000/- and as per section 194I no TDS is to be deducted for the relevant period of time.
10. As regards the Assessing Officer's claim that for rent payment, no proof was given by the assessee, assessee contended before the Ld. Commissioner of Income Tax (A) that the same was not asked by the Assessing Officer during the course of assessment and the same were duly available. However, Ld. Commissioner of Income Tax (A) was not convinced. He observed that in this case assessee failed to file the proof of evidence before the Assessing Officer at the stage of assessment. Further, he held that assessee filed manufactured /wrong documents before the Assessing Officer. When the matter was remanded to the Assessing Officer, there also, another set of 7 ITA NO. 4392/Del/2009 documents were filed. Ld. Commissioner of Income Tax (A) further observed that a new group of persons were now shown to have received the rent much deviation to details filed before the Assessing Officer. He observed that in the new group of cases again the relevant details although asked for, was not filed before the Assessing Officer to his satisfaction. Ld. Commissioner of Income Tax (A) held that it was not clear what further opportunity the assessee wants from the Department to file the true and correct details. Accordingly, Ld. Commissioner of Income Tax (A) confirmed the addition made by the Assessing Officer.
11. Against the above order the Assessee is in appeal before us.
12. We have heard the rival contentions and perused the records.
We find that assessee's submissions before the Assessing Officer and Ld. Commissioner of Income Tax (A) has not been properly appreciated. Assessee has given certain documents as additional evidences which were not entertained by the authorities below.
Assessee has contended that in certain cases, rent payment were less than ` 1,20,000/-, hence, no TDS was required to be deducted.
Further in some cases, where disallowance was made on account of no proof of payment of rent, assessee's claim is that the Assessing Officer never asked for the proof of payment at the assessment stage. In our considered opinion, under the facts and circumstances of the case, interest of justice will be served, if the matter is remitted to the file of 8 ITA NO. 4392/Del/2009 the Assessing Officer. Assessing Officer is directed to go through the submissions and evidences being filed by the assessee and accordingly, adjudicate the issue. We hold and direct accordingly.
13. In the result, the appeal filed by the Assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 28/9/2012.
Sd/- Sd/-
[I.C. SUDHIR] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 28/9/2012
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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