Income Tax Appellate Tribunal - Delhi
Lepide Software Pvt. Ltd.,, New Delhi vs Department Of Income Tax
ITA NO. 5455/Del/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "D", NEW DELHI
BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 5455/Del/2012
A.Y. : 2009-10
INCOMETAX OFFICER, VS. M/S LEPIDE
WARD 13(3), R.NO. SOFTWARE PVT. LTD.,
338, FORMERLY KNOWN
C.R. BUILDING, NEW AS NUCLEUS DATA
DELHI RECOVERY. COM PVT
LTD.,
R/O 325, GARG
PLAZA, ROAD NO. 44,
PITAMPURA, NEAR
RANI BAGH, DELHI -
110 034
(PAN AACCN2139C)
(APPELLANT) (RESPONDENT)
Assessee by : Sh. S.K. Gupta, CA
Department by : Sh. Madhukar Kumar Bhagat,
D.R.
ORDER
PER SHAMIM YAHYA: AM This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XVI, New Delhi dated 29.6.2012 pertaining to assessment year 2009-10.
2. The grounds raised read as under:-
i) Whether on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (A) has erred in allowing the deduction claimed u/s.1
ITA NO. 5455/Del/2012 10A amounting to Rs. 3,80,12,969/- without submitting the Form 56F by the assessee even after sufficient time and opportunity was given to the assessee to furnish the report in Form 56F from an accountant.
ii) Whether on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (A) has erred in deleting the addition made on account of depreciation of Rs. 16,62,525/- held that depreciation on the assets cannot be disallowed merely because the running bills could not be furnished.
iii) Whether on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (A) has erred in deleting addition of Rs. 6,68,351/- on account of unexplained sundry creditors without appreciating the facts produced by the Assessing Officer in his assessment order.
iv) The appellant craves to be allowed to add any fresh grounds of appeal and / or delete or amend any of the grounds of appeal.
3. Apropos deduction claimed u/s. 10A In this case Assessing Officer had made the disallowance u/s. 10A of the Act on the ground that Form No. 56F was not furnished by the assessee before the Assessing Officer.
4. Before the Ld. Commissioner of Income Tax (A) assessee made elaborate submissions. Ld. Commissioner of Income Tax (A) noted that although hearing before the Assessing Officer in the present 2 ITA NO. 5455/Del/2012 case took place a number of times, assessing officer did not ask the assessee to file Form 56-F except on 20.10.2011. Ld. Commissioner of Income Tax (A) noted that other than this form, the assessee has furnished before the Assessing Officer all the details to support its claim of deduction u/s. 10A. Ld. Commissioner of Income Tax (A) further referred to the decision of the Hon'ble Jurisdictional High Court in the case of C.I.T. vs. Mantec Consultants (P) Ltd. in I.T.A. No. 1295/2008. Ld. Commissioner of Income Tax (A) further noted that Form No. 56-F was not filed before the Assessing Officer and copy of this Form was filed before the Ld. Commissioner of Income Tax (A) during the course of appellate proceedings. Ld. Commissioner of Income Tax (A) admitted the same in the interest of natural justice. Ld. Commissioner of Income Tax (A) further noted that for the immediately two preceding assessments years, assessment was completed u/s. 143(3) of the I.T. Act and the assessee was allowed deduction u/s. 10A by the Assessing Officer. Hence, Ld. Commissioner of Income Tax (A) directed the Assessing Officer to allow the benefit of deduction u/s. 10A of the Act.
5. Against the above order the Revenue is in appeal before us.
6. We have heard both the counsel and perused the records. We note that assessee has furnished all the details in support of its claim of deduction u/s. 10A before the Assessing Officer and the only reason given by the Assessing Officer in the assessment order for non-allowing of the claim was the non-furnishing of Form 56F. The same Form was admitted by the Ld. Commissioner of Income Tax (A) in the appellate proceedings. In view of these facts, we do not find any infirmity in the order of the Ld. Commissioner of Income Tax (A). Hence, we affirm the same.
3ITA NO. 5455/Del/2012
7. Apropos Addition made on account of depreciation 7.1 On this issue Assessing Officer noted that in the depreciation chart submitted by the assessee, it was found that addition of Rs. 1,66,46,090/- was made in the building account. Assessee was asked by the Assessing Officer to give details of the addition made. From the details filed of addition made, it was observed the assessee has constructed / renovated the commercial building at B- 57, Sector-57, Noida during the year which was put to use on different dates mentioned in the chart. Assessee was asked to explain with the evidence alongwith the Certificate of completion of building. It was also asked to furnish the copy of the agreement with the contractors alongwith bills raised by them for payment on different stages of the work done. Ld. Counsel of the assessee submitted that the assessee cannot produce the copy of the bills raised by the contractors who constructed / renovated the building as the same were in the possession of the architect. Further, it was also submitted that no completion certificate was issued by the NOIDA Authority in this case and the completion certificate was issued by the Architect, basis on which, the assessee has shown the building ready to put to use on different dates and claimed the depreciation accordingly.
7.2 In this regard, in order to verify the genuineness of the transactions and submissions of the assessee, notice u/s. 133(6) of the Act were issued to the contractors and Architect. On the basis of statement obtained in this regard, Assessing Officer noted that the Architect has not given any completion certificate to the assessee. Further, Assessing Officer noted that the claim of the assessee that bills raised by the contractor were in possession of Architect and 4 ITA NO. 5455/Del/2012 cannot be produced by him, were found in correct. In light of the above, Assessing Officer held that it is established that the property was not ready to put to use on different dates as claimed by the assessee. Therefore, the claim of the assessee for depreciation of Rs. 16,62,525/- was disallowed and added back to its total income for taxation.
8. Before the Ld. Commissioner of Income Tax (A) assessee inter- alia submitted that all the contractors bills were submitted during the assessment proceedings. Considering the above, Ld. Commissioner of Income Tax (A) held that he was inclined to agree with the assessee that since the bills in regard to the building were furnished by the counsel of the assessee, the depreciation on the assets cannot be disallowed merely because the running bills could not be furnished. Ld. Commissioner of Income Tax (A) further noted that the existing building had been renovated and a new building had not been constructed and that is why completion certificate could not be produced. Moreover, the business has been shown to have been conducted from this building, which implies that the building must have been complete/ ready for use during the year. That in any case, the effect of this addition would be revenue neutral since the assessee is entitled to deduction u/s. 10A and any disallowance of depreciation would not result in increase in taxable income of the assessee. Accordingly, Ld. Commissioner of Income Tax (A) allowed this ground of appeal.
9. Against the above order the Revenue is in appeal before us.
10. We have heard both the counsel and perused the records. We find that in this case Assessing Officer has inter-alia noted that the bills of contractors for the construction were not produced before him. However, the assessee has submitted before Ld. 5 ITA NO. 5455/Del/2012 Commissioner of Income Tax (A) that assessee has duly submitted the bills before the Assessing Officer. Ld. Commissioner of Income Tax (A) has accepted this. There is nothing on record to show that these submissions of the assessee were put before the Assessing Officer. Thus we find that in the assessment order, Assessing Officer has noted that assessee has not produced any bill of contractor for construction. However, Ld. Commissioner of Income Tax (A) has accepted the assessee's submissions that the same were produced during the assessment proceedings. In our considered opinion, interest of justice demands in this case that Assessing Officer be given an opportunity to go through these bills and satisfy himself about the veracity of the same. Accordingly, we remit this issue to the file of the Assessing Officer. Needless to add that the assessee should be given adequate opportunity of being heard.
11. Apropos deletion of addition on account of unexplained sundry creditors 11.1 On this issue Assessing Officer noted that assessee has shown sundry creditors as on 31.3.2009 of Rs. 6,88,351/-. The details of such parties are as under:-
1. M/s Foretech Computer Systems Rs. 84,000/-
Pvt. Ltd.
2. M/s ICICI Bank Card Anil Verma Rs. 1,293/-
3. M/s Infinity Electrical Rs. 2,38,977/-
4. M/s Miracle Credit Card Rupesh Rs. 17,316/-
5. M/s Parwani & Co. Rs. 4,810/-
6. M/s Reliance - 9313558458 Rs. 404/-
7. M/s Singla Fabrication and Glass Rs. 35,5,48/-
Home
8. M/s Supreme Aircon Rs. 63,572/-
9. M/s United Concepts and Solutions Rs. 2,42,431/-
Pvt. Ltd.
6
ITA NO. 5455/Del/2012
Total Rs. 6,88,351/-
6,88,351/-
11.2 Assessing Officer asked the assessee to submit the
confirmations from the above mentioned parties. Assessing Officer noted that in spite of giving sufficient time, the assessee failed to furnish the confirmation certificate from the creditors. Assessing Officer noted that in view of the failure of the assessee in furnishing the desired confirmation certificate from sundry creditors the genuineness, the creditworthiness and identity of the creditors has not been established. Therefore, Assessing Officer held that unexplained sundry creditors of Rs. 6,68,351/- were disallowed and added to the income of the assessee u/s. 68 of the I.T. Act.
12. Ld. Commissioner of Income Tax (A) in this regard noted that the Assessing Officer had required the assessee to provide details of sundry creditors exceeding Rs. 50,000/- but has proceeded to make addition on account of sundry creditors, most of whom are below that amount. Ld. Commissioner of Income Tax (A) further observed that not only this, the sundry creditors represent amounts outstanding on account of credit cards, expenses like legal bills, etc. That if the Assessing Officer has accepted such expenses claimed by the assessee in its profit and loss account, he could not have made addition on account of such expenses remaining outstanding at the end of the year. That moreover, the effect of this addition to income would also be revenue neutral because the assessee is claiming deduction u/s. 10A. Accordingly, the addition so made was also directed to be deleted.
13. Against the above order the Revenue is in appeal before us.
14. We have heard both the counsel and perused the records. We find that Assessing Officer in this regard has noted that assessee 7 ITA NO. 5455/Del/2012 has failed to produce the confirmation certificate from sundry creditors. The same was also not produced before the Ld. Commissioner of Income Tax (A). However, the Ld. Commissioner of Income Tax (A) has accepted the assessee's submission that since the expenses in this regard have been admitted, the addition on account of sundry creditors was unjustified. In our considered opinion, Ld. Commissioner of Income Tax (A) has erred in this regard. Assessing Officer wanted to examine the sundry creditors. But the assessee did not provide the confirmation certificate. Ld. Commissioner of Income Tax (A) has not himself made the verification. Hence, in our considered opinion, the veracity of sundry creditors is not established. Hence, in the interest of justice, we remit this issue to the file of the Assessing Officer. The Assessing Officer shall examine the issue afresh by giving the assessee adequate opportunity of being heard.
15. In the result, the appeal filed by the Revenue stands allowed for statistical purposes.
Order pronounced in the open court on 08/8/2013.
Sd/- Sd/-
[R.P. TOLANI]
TOLANI] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 08/8/2013
"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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ITA NO. 5455/Del/2012
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