Income Tax Appellate Tribunal - Delhi
Ito, Ward-7(1), New Delhi vs Delta Foods P.Ltd, Delhi on 30 May, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'B', NEW DELHI
Before Sh. Kul Bharat, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
ITA No. 4619/Del/2018 : Asstt. Year : 2014-15
Income Tax Officer, Vs. Delta Foods Pvt. Ltd.,
Ward-7(1), 17, Alipur Road, Civil Lines,
New Delhi-110002 New Delhi-110054
(APPELLANT) (RESPONDENT)
PAN No. AAACD1024E
Assessee by : Ms. Lalita Krishnamurthy, CA
Revenue by : Sh. Vivek Kr. Upadhyay, Sr. DR
Date of Hearing: 14.03.2024 Date of Pronouncement: 30.05.2024
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the Re venue against the order of ld. CIT(A)-3, New Delhi dated 02.04.2018.
2. Following grounds have been raised by the Revenue:
"1. "The Ld. Com missioner of Inco me Tax (Appeals) erred in law and on the facts of the case in deleting the additio n of Rs. 1,83,05,853/- made by the AO u/s 68 of the Income Tax Ac t, 1961.
2. "T he Ld. Commissioner of Inco me Tax (Appeals) erred in law and on the facts of the case in deleting the additio n of Rs. 58,65,646/- made by the AO on account of salary/Wages u/s 37.
3. "T he Ld. Commissioner of Inco me Tax (Appeals) erred in law and on the facts of the case in de leting the disallo wance of Rs. 14,83,607/- made by the AO u/s 14A of the Income Tax Act 1961 read with Rule 8D of the Income Tax Rules, 1962."2 ITA No. 4619/Del/2018
Delta Foods Pvt. Ltd.
3. The assessee company engaged in the busine ss of manufacturing of biscuits, cakes & other bakery produc ts on behalf of Britannia Industries on job work basis. For the purpose of manufacturing the raw material, pa cking ma terial and other ne cessary items were provided by the Britannia Industries Ltd.
Addition u/s 68:
4. The addition u/s 68 of the Income Tax Act, 1961 has been made by the Assessing Officer owing to the difference in the Form 26AS and the income in the retur n of inco me of various parties.
5. The relevant part of the Assessment Order is as under:
S. Name of Section In co me in B o o ks an d retu r n Income in Diffe rence Remarks No. Party 26AS Part icu la rs Amou nt (Rs.)
1. Br itann ia 194C Con version 13,73,31,500 19,65,10,801 Industries income Ltd.
2. Excise 5,80,38,083 reimbursement Total-A 19,65,10,801 19,65,10,801 Reconciled
2. Dharmpal 194A Interest on 74,38,583 74,38,583 Satyapal Ltd. capex In vestment 194A Compensation 1,00,00,000 1,00,00,000 on pre ter minat ion 194C Expenses 11,54,606 11,54,606 reimbursement income Project 24,45,332 expenses reimbursement income Con version 8,45,957 2,77,93,801 income 3 ITA No. 4619/Del/2018 Delta Foods Pvt. Ltd.
Re ce ive d from 3,34,745
Dharmpal
Satyapal
Total-B 2,22,19,493 4,63,87,260
Less: Taken as 1,83,08,508
income in FY
2012-13
Less: Received 58,59,255
from Dh armpal
Satyapal
2,22,19,493 2,22,19,497 Reconciled
3. Punjab 194A 21,29,940 21,31,066 Reconciled
National Bank
Total-C 21,31,066 21,31,066 Reconciled
4. Honey 193 2,12,806
Builders Ltd.
5. TDI Realcon 193 54,519
Pvt. Ltd.
6. Orris 193 1,05,974
In frastru cture
Pvt.
7. Transcon 193 1,63,053
Developers
Pvt. Ltd.
Total-D 5,36,352 5,36,352 Reconciled
8. Reliance 194IB Total-D - 2,55,571 2,55,571 This TDS
In frateel Ltd. is wrongly
deducted
by
Reliance
in the PAN
of the
assessee
Total- 22,13,97,712 24,58,21,050
A+B+C +D+E
Th e a n a l y si s o f a b ov e m ent i on e d d a t a a t s er ia l n o . 2 , pr od u ced b y th e as s e ss e e d u ri ng t he a s s e s sm ent p r o c e edin g s , w i th r eg a r d to M /s D h a ram p al S aty ap a l Lt d ., po st u l a t e s t ha t re cei pt s of R s. 1 , 8 3 ,0 8 ,5 08 /-
w er e a cc oun t ed f o r i n th e t ota l r ec eip ts o f a s s e s sm en t y ea r 2 0 1 3- 14 r el e va n t to fi n a n c ia l y ea r 2 0 1 2 - 1 3 . A s pe r i n pu t s, a va i l a b l e on r e c o rd , th e 4 ITA No. 4619/Del/2018 Delta Foods Pvt. Ltd.
TD S of th e in st a n t a m ou nt was cl a i me d in a ss e s sm en t ye a r 2 0 1 4- 1 5 r el e va n t t o fin an ci a l ye a r 2 0 1 3 - 1 4 . Th e A R o f th e a s s es s e e c ont en d ed t h a t in st an t r e c ei pt s sh ow n in f o rm 26 A S i n a s s es s m en t y e a r 20 1 4- 1 5 h a v e be en b r o ug ht t o t a x in p r ec e di ng a s ses s men t y ea r v iz . 2 01 3 -1 4 .
E xa mi nat io n of f o r m 2 6 A S i n t er m o f a ss e s sm en t y ea r 2 0 1 3- 14 wh i ch wa s do wn l oa d ed fr o m th e s y st e m t ra n sp ir e s th a t r e c ei pt s o f R s .2 ,1 6 ,0 2 , 7 12 /- w er e r e c ei v ed f r o m M/ s D h a ra m pa l Sa t ya p a l L t d . a n d a l s o du ly a c c oun t ed f or in t h e t ot al r e c e ip ts of a ss e s sm en t y ea r 2 01 3 -1 4 . Th e c on t en t i on of th e as s e ss e e c ou l d n ot su c c e e d . Th e a ss e s se e , v id e o rd e r s he et r e c o rd in g s da t ed 2 1 .1 0 . 2 01 6 w a s a s k ed t o con t ro v e rt t h e fin d in g s .
Vi d e n o t i c e u /s 1 33 ( 6) o f t h e I .T . A c t , 19 61 , M/ s D h a r a m p a l Sa t ya p a l Lt d . w a s m a n d a t ed t o f urn i sh th e d et a il s o f b u si n e ss t r a ns a c ti on s w i th th e as s e ss e e c om p an y d uri ng t h e y e a r un d e r r e f e r en ce. In c om p li a n c e , cop y o f led g er a c cou n t o f t h e a s s e s s e e c omp a n y b ei n g m a in ta in e d i n it s b oo ks of ac c oun t s al on g w it h TD S c e rti fi c a t e s w er e fu rni sh ed w hi c h in c o rp o ra t e s th a t a s se s s e e c omp a ny w a s c r ed i t ed a sum of R s. 4 ,6 3 ,8 7 , 26 0 /- a n d T DS w a s m a d e a s p e r e x is ti n g p r ovi s i on s a s w ell . Th e a ss e s s e e w a s co nf r on t ed w it h t h e fin d in g s a n d co p y of l edg e r a c c o un t w a s p r ov i d ed to th e a s s e s s e e c omp a ny a s w e ll . Th e a ss e s s e e c om p a n y vi d e n o . SR A - L K/ 2 01 6 - 1 7 / 7 0 6 da t ed 0 6 .1 2 . 2 01 6 w hi ch i s r ep r o du c e d a s u n d e r:
Re c o nc il i at io n o f D SL a m o u nt Tw o y ea r a ccou n ts o f a s s es s e e in th e b o ok s o f D S L h a v e be en p r ovi d ed t o u s fo r r e c o nc i liat i on wi th t h ei r a c c oun t i n t h e b o ok s o f a ss e s se e co mp a ny . Th e d eb it s a n d c r edi t s a r e ful ly m a t c h ed . Th e on ly d i ff e r en c e is th a t wh e r ea s t h e b a l a n c e o f R s .1 ,8 3 ,0 8 , 5 00 / - w a s tra ns f e r r ed t o i n co me a c c ou nt in f i na n cia l y ea r en d ed 3 1 s t Ma rc h, 2 0 13 b y th e a ss e s s e e c omp a n y , D S L c a r ri e d f o rw a rd th e s a m e b a la n c e of Rs. 1 ,8 3 , 0 8 ,5 0 0 /- t o t h e n e xt f in a n ci a l y e a r en d ed 3 1 s! M a r c h, 20 1 4 a n d at th e ti m e of m at c h i n g th e cl o sin g ba l a n c e o f t h es e tw o a c c ou n t s da t e d 3 1. 0 3 .20 1 4 of Rs. 8 9 ,7 6 ,9 08 /- , t h ey i n a dv e rt en t ly a g a in c re di t ed th e am oun t of th e su m R s . 1 , 83 , 0 8 ,5 0 0 /- b y D S L . H o w ev e r t h e fa c t is t h a t th e am oun t p aid a t th e tim e of s ett l e m en t o f a cc o u nt i n t h e fin a n ci a l y e a r end e d 3 1 sl Ma r c h , 2 0 14 h a s m a t c h ed in bot h t h e a c c ou nt s.5 ITA No. 4619/Del/2018
Delta Foods Pvt. Ltd.
F ol l o w in g is t h e b i f u r c a ti on o f s uc h c r edi t o n 3 r d F e b rua r y, 2 0 1 4 in th e bo ok s of D S L :
S. N o . Am ou nt Date A.Y E xp l a na t i on
1. 1 ,8 3 , 0 8 ,5 0 8 3 1. 0 3 .20 1 3 2 01 3 - 1 4 Ta k en as income by assessee
c omp a ny in F .Y . 2 0 12 -1 3 but
ca r ri ed fo r w a rd e d by D SL t o F. Y .
2 01 3 - 1 4
2. 5 8, 5 9 ,25 5 3 1. 0 1 .20 1 4 2 01 4 - 1 5 C a pi tal a s se t s s old sh ow n in
ba l a n c e s h e e t
3. 2 4, 4 5 ,33 6 2 0. 0 1 .20 1 4 2 01 4 - 1 5 Sh o w n a s in c om e i n b a la n c e s h e et:
n ot e 1 5
4. 3 ,3 4 , 7 45 2 0. 0 1 .20 1 4 2 01 4 - 1 5 Sh o w n a s in c om e i n b a la n c e s h e et:
n ot e- 1 5
T ot al 2 ,6 9 , 4 7 ,8 4 4
Th e su b m i ssi on r ep r odu c ed a b o v e w e r e a ga in co nf r on t ed to M/ s D S L L t d . ( Dh a ra m pal Sat y ap a J L td .) a n d in -c o m pl ia n c e M/ s D S L L td . t h r ou gh e- ma i l, fu rn i sh ed t h e d eta i l s o f a m oun t c r edi t ed in th e a cc ou n t o f t h e a s s e s s e e c omp a ny w h i ch i s r e pr od u c ed a s u nd e r:
Na m e of th e Am ou nt TD S Am ou nt TD S M ad e
as s e ss e e C r e di t ed A. Y Ma d e/ cl a im e d c r edi t e d A. Y
2 01 4 - 1 5 2 01 3 - 1 4
M/ s D el t a fo od s 4 ,6 3 , 8 7 ,2 6 0 2 3, 2 2 ,85 3 2 ,1 6 7 0 2 , 7 12 2 ,4 9 , 3 25
( P) Lt d.
R e c ei p t s sh ow n 2 ,2 2 , 1 9 ,4 9 3 2 ,3 2 , 2 8 ,5 3 7 2 ,1 6 , 0 2 ,7 1 2 2 ,4 9 , 3 25
in t h e I TR b y
th e a s s es s e e
W e h av e e xam in ed th e riv a l su bmi s si o n ca r efu l ly a n d de t a i l s a va i la b l e o n r e c or d w hi ch cat eg o ri ca l ly d e m on s t r a t e t ha t a s se s s e e c o m pa n y ha s n ot ac c oun t ed f o r r e c e i pts a m ou nt in g to R s. 1, 8 3 ,05 ,8 5 3/ - in hi s b o ok s of ac c oun t s d eli b er a t el y. D e sp i t e p r o vid in g nu me r ou s opp o rtu n it i es , a s s ess e e fa il e d to r e c onc i l e th e r e c ei p ts and u nsu c c es s fu ll y c o n ti nu ed to beat ar ou n d t h e b u sh . Th e a s s e s s e e h a s a l so cl a i m ed th e T D S m a d e a t th e c r edi t a m ou n t o f R s . 1, 8 3 ,05 ,8 5 3/ - in hi s r e ru n of i n c o me , ti l ed f o r th e y ea r un d e r r e f e r en c e. T h e a s s e s sm en t p r o c e ed i n gs c a n n ot b e e xt en d ed fu rt h e r, in v i ew o f r ep e a t ed b lu rr e d r e s pon s e o f t h e a s s e s s e e . In t h e li gh t 6 ITA No. 4619/Del/2018 Delta Foods Pvt. Ltd.
o f ab o v e fa ct s & f i n di ng s , Rs .1 ,8 3 , 0 5 , 85 3 /- w hi ch r e m a in ed u n exp l a in e d, ar e ad d ed b a ck u/ s 6 8 o f th e A ct , 19 6 1 i n t h e t ot a l in c om e o f th e as s e ss e e , a s a d d i ti o n a l i n c o m e t o t a x f o r t h e y ea r u nd e r r ef e r en c e.
6. The ld. CIT(A) deleted the addition holding a s under:
" 2 .1 I h a v e c a r e fu ll y c on s id e r ed th e su bmi ss i on s o f th e a p pel la n t a n d t h e / r em a rk s of A O in t h e a s s e s sm ent o rd e r on th i s is su e . T h e su b m i ss io n s o f th e a p p e l la n t sh ow t ha t th e a m ou nt pa id/ c r edi t ed a s p e r o rig in a l F o rm 2 6A S b y t h e d edu c t o r i n A Y 2 01 4 - 1 5 s h ow s a n a m oun t of R s. 4 ,6 3 , 87 ,2 6 0 / - pa i d / cr ed it e d by t h e d ed uc t o r D h a ra m pa l S a t y ap a Lt d. ( D S L) f r om wh i ch th e a m oun t r e c ei v e d f r om DS L a s p e r ba l a n c e sh e et re l ev a n t t o A Y 2 01 4- 1 5 o f R s. 2 ,2 2 , 19 ,4 93 / - i s r e d uc e d a nd fu r th er a m ou nt o f R s . 5 8 ,5 9 ,2 55 /- is r edu c ed on a cc ou nt o f sa l e o f c a p i ta l a ss et i n AY 2 0 1 4- 1 5, t h e a m ou nt c om e s t o R s . 1, 83 , 0 8,5 0 8/ - , l e s s d if f e r en c e d u e t o rou nd in g of f . P e ru sal o f th e ba l an c e s h e et f in a l a m ou nt o f a pp ell a nt , r ev e a l s th i s a m ou nt of R s . 1 ,8 3 , 0 8 ,5 0 8 /- h as a lr ea d y b e en t a k en a s in c om e b y a p p ell a nt c o mpa n y in AY 2 0 13 -1 4 . I h o ld t he i m pu gn ed a dd i ti on a m oun t t o a du l y a dd it i on i s th e sa m e h a s a l re a d y b e en t a k en a s i n c o m e b y th e app el l a n t f o r A Y 2 0 13 - 14 . At t h e pa r a 3 .1 of th e a s s es s m e nt o rd e r a s s e s si ng of fi c e r ha s g iv en th e fig u r e of Rs . 1 ,8 3 ,08 ,5 0 8/ - . H ow e v e r , in the last p a r a g r a ph of th e as s e ss m en t o rd e r t h e f ig u r e o f R s . 1 , 83 , 0 5 ,85 3 /- h a s b e en m en t i on ed , w hi c h i s a p pa r en tl y e r r on e ou s.
2 .2 Th e d edu ct o r (D S L) h a s fi rs t t im e d ed u ct ed t a x a t s ou r c e @ 2 % on th e am oun t o f R s. 1 , 8 0 ,2 1, 93 0/ - a t t h e ti m e w h e n it gi v e a n a d va n c e t o app ell an t co mpan y i n A Y 2 0 13 - 14 , a nd t he s e c on d ti m e w h e n th e a p p el lan t c omp a ny a c c oun t w a s c re di t ed b y D S L in it s b o ok s f o r A Y 20 1 4 -1 5 . T h e fig u r e o f T D S @ 2 % on t he a m oun t of Rs . 1 ,8 0 ,2 1, 9 3 0/ - w a s u pl o a d ed by th e d edu ct o r in th e Fo rm 2 6 AS o f a pp e lla n t c o m pa n y f o r b ot h A Y 2 0 13 - 14 an d A Y 2 0 14 - 15 . S ub s e qu ent l y, t h e ded uct o r (D S L) mo di fi e d t h e F o r m 2 6A S d et ai l s of a p p el l a nt co m pa n y f o r A Y 20 1 4 -1 5 in t h e i nc o m e t a x w eb s it e wh i ch r esu l ted i n t h e t ota l c r e d it o f D S L be i ng r e du c ed fr o m Rs . 4 ,6 3 , 8 7 ,2 6 0 /- to Rs . 2 ,8 3 , 65 , 3 30 / -. As a r e su lt th e a m ou n t of Rs . 2 ,6 9 , 4 7 ,8 4 4 /- p aid / c r edi t e d b y th e d edu ct o r on F e b ru a r y, 03 , 20 1 4 n ow sta n ds m o d i fi ed t o R s . 8 9 ,2 5 ,9 14 /- . N e c es s a ry cl a ri fi ca t i on ha s a l s o b e en 7 ITA No. 4619/Del/2018 Delta Foods Pvt. Ltd.
is s u ed b y D S L wh i c h ha s b e en r ep r odu c ed a t p a ra 2 .1 a b ov e . H en c e, th e add it i on of R s. 1, 8 3 , 05 ,8 5 3/ - is r e c on ci l ed and the a d dit i on of Rs. 1 ,8 3 , 0 5 ,8 5 3 /- i s h e r eb y d el et ed . "
7. The reco nciliation has been brought before both the parties during the hearing. No contrary findings could be brought to our notice.
8. Since, the decision of the ld. CIT(A) is rightly based o n the reconciliation of the amounts, we decline to interfere with the order of the ld. CIT(A).
Ground No. 2Disallowance on account of salary/wa ges - Rs.58,64,646:
9. The AO made disallowance on acco unt of s alary & wages holding that they were in much difference to the earlier years perio d.
10. From the details of salaries / wages paid to the employees and the audite d accounts, the comparative table below would go to s how that the salary / w ages paid to wo rkers and the employer contribution towards EPF and ESI had all reduced in the relevant year, contrary to the obser vation of the AO in the impugned order.
P a r t i c ul a r s AY 2014-15 AY 2013-14 S a l a r y / W a g e s p a i d t o w o r k e r s R s . 3 0 ,7 8 , 8 9 9 / - R s . 3 6 ,9 9 , 8 0 2 / -
( e x cl u d i n g D i r e c t o r ' s r e m u n e r a t i o n ) Em p l o y e e s c o n t r i b u t i o n t o w a r d s EP F R s . 3 , 8 8 ,8 0 6 / - R s . 4 , 5 2 ,2 4 6 / - Em p l o y e e s c o n t r i b u t i o n t o w a r d s ES I R s . 3 , 4 7 ,9 7 7 / - R s . 3 , 8 7 ,1 0 2 / -
11. In support of salary / wages account, appe llant company had in the assessment proceedings filed the follow ing deta ils:
8 ITA No. 4619/Del/2018Delta Foods Pvt. Ltd.
(i) Salar y summary for March 2014 with copy of salary regis ter for the same month by letter dated 30.11.2016.
(ii) Details of salary / wages as per audited accounts by letter dated 07.12.2016.
(iii) Details of salary acco unt (bank account number) of employees and available addresses from the rec ords of the appella nt company.
12. It was submitted that the salary were transferred to the employee salary account mainly in Canara Bank. The details of the account number along with their addresses as per the records of the appellant company were given.
13. From the salary reconciliation provided to the AO proves that the employees are registered with the PF / ESI authorities and deductions were duly made. The chart conta ining the ESI- ID number/ PF-ID number of such emplo yees wer e submitted to the revenue authorities alongwith their addresses .
14. The ld. CIT(A) deleted the addition after examining the details of the salary of the employees transfer to the salary accounts which were mostly maintained with Canara Bank, Ghaz iabad SME Branch. The ld. CIT(A) held that from the salary reconciliation Statement it is apparent that these employees are regis tered with the PF/ESI authorities and the deductions as show n in the reconcilia tion state ment were being made.
15. The ld. CIT(A) has also examined the chart containing the ESI/ID No. and PF/ID No. was submitte d along with addresses of the employees as per the appellant's records. The ld. C IT(A) 9 ITA No. 4619/Del/2018 Delta Foods Pvt. Ltd.
held that the appellant made the payments to the outstation temporary workers, by cheque and not by cash a s presumed by the Assessing officer. The ld. CIT(A) held that the deta ils of cheque issued to the temporary workers for salary payment were furnished from the bank statement and tallied with list of names of temporary workers on the basis of whic h disallo wance of salary payment was do ne by Assessing officer of Rs.58 ,64,646/-.
16. Since, all the details have been categorically examined by the ld. CIT(A) and also available in the paper book filed before us. After verification o f the paper book and going through the entire facts a nd as no contrary evidences were brought before us, we find no reason to interfere with the or der of the ld. CIT(A) as the salary payments tallied with the lis t of the names of the temporary workers from the bank statement.
Divid end:
17. Both the parties fairly submitted that no exempt income earned by the assessee. Hence, keeping in view the decis ion of the Hon'ble Delhi High Court in the case of Cheminvest L imited vs. CIT (2015 ) 378 ITR 33, we hold that no disallowance is calle d for, in the absence of any exempt income claimed by the assessee.
10 ITA No. 4619/Del/2018Delta Foods Pvt. Ltd.
18. In the re sult, the appeal of the Revenue is dismissed. Order Pronounced in the Open Court on 30/05/202 4.
Sd/- Sd/-
(Kul Bharat) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 30/05/2024
*Subodh Kumar, Sr. PS*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR