M/s. Sharp Bussiness System India Ltd, New Delhi v. ACIT, New Delhi

CO 251/DEL/2009 | 2001-2002
Pronouncement Date: 15-01-2010 | Result: Dismissed

Appeal Details

RSA Number 25120123 RSA 2009
Bench Delhi
Appeal Number CO 251/DEL/2009
Duration Of Justice 4 month(s) 28 day(s)
Appellant M/s. Sharp Bussiness System India Ltd, New Delhi
Respondent ACIT, New Delhi
Appeal Type Cross Objection
Pronouncement Date 15-01-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 15-01-2010
Date Of Final Hearing 05-01-2010
Next Hearing Date 05-01-2010
Assessment Year 2001-2002
Appeal Filed On 18-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA I.T.A. NO. 2772/DEL/2009 ASSESSMENT YEAR: 2001-02 ASSISTANT COMMISSIONER OF IT VS. SHARP BUSINESS SYSTEM INDIA LTD. CIRCLE 8(1) 214-221 ANSAL TOWER NEW DELHI. 38-NEHRU PLACE NEW DELHI-1100 19 (APPELLANT) (RESPONDENT) CROSS-OBJECTION NO. 251/DEL/2009 (IN ITA NO.2772/DEL/2009) ASSESSMENT YEAR: 2001-02 SHARP BUSINESS SYSTEM INDIA LTD. VS. THE ASSISTAN T CIT 214-221 ANSAL TOWER CIRCLE 8(1) 38-NEHRU PLACE NEW DELHI-1100 19 NEW DELHI. (CROSS-OBJECTOR) (RESPONDENT) APPELLANT BY: SHRI GAJANAND MEERA CIT( DR) RESPONDENT BY: SHRI VIVEK KUMAR JAIN CA ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LEARNED CIT(APPEALS) DATED 12.03.2009 PASSED FOR ASSESSMENT YEAR 2001-02. ON RECEIPT OF NOTICE ASSESSEE HAS FILED CROSS-OBJECTI ON BEARING NO.251/DEL/09. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LEARN ED CIT(APPEALS) HAS ERRED 2 ANNULLING THE ASSESSMENT MADE BY THE ASSESSING OFFI CER UNDER SEC. 143 READ WITH SEC.147 OF THE ACT HOLDING THAT NOTICE ISSUED UNDER SEC. 148 OF THE ACT WAS ON CHANGE OF OPINION. 2. THE BRIEF FACTS OF THE CASE ARE THAT A RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 31.10.2001 DECLARING A LOSS OF RS.6 84 53 437. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICES WERE I SSUED UNDER SEC. 143(2) AND 142(1) OF THE ACT. THE REPRESENTATIVE OF THE AS SESSEE APPEARED AND AN ASSESSMENT WAS FRAMED ON 19.3.2004 UNDER SEC. 143(3 ) OF THE ACT. ASSESSING OFFICER THEREAFTER SOUGHT TO REOPEN THE ASSESSMENT BY ISSUANCE OF A NOTICE UNDER SEC. 148 ON 29.2.2008. HE HAS RECORDED THE RE ASONS FOR REOPENING OF THE ASSESSMENT. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAD DEBITED A SUM OF RS.1 92 42 717 FROM THE TAXABLE INCOME ON ACCOUNT OF ADVERTISEMENT EXPENSES WHEREAS IN THE ACCOUNT IT HA S TREATED THESE EXPENSES AS DIFFERENT REVENUE EXPENSES AND WERE NOT DEBITED TO THE P & L ACCOUNT. ASSESSING OFFICER WAS OF THE OPINION THAT BECAUSE O F THE FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS THIS EXCESS DEDUCTION WAS ALLOWED TO IT AND IT RESULTED IN ESCAPEMENT OF INCOME. 3. ON APPEAL LEARNED CIT(APPEALS) REAPPRECIATED TH E FACTS AND CIRCUMSTANCES AND OBSERVED THAT IN THE SCRUTINY ASS ESSMENT ASSESSING 3 OFFICER HAS SPECIFICALLY MADE AN INQUIRY WITH REGAR D TO ADVERTISEMENT AND SUBMITTED THAT IT HAS INCURRED ADVERTISEMENT EXPENS ES OF RS.2.36 CRORES OUT OF THAT RS.44 44 282 WERE INCURRED FOR SHARP BRAND BUILDING. THESE WERE INCURRED BEFORE THE COMMENCEMENT OF THE OPERATION O F THE COMPANY AND THESE WERE NOT CLAIMED IN THE COMPUTATION OF INCOME BY TREATING THEM HAS PRE-OPERATIVE EXPENSES. WITH REGARD TO POST-OPERATI VE EXPENSES OF RS.1 92 42 717 IT WAS CONTENDED THAT IN THE BOOKS THESE WERE TREATED AS DIFFERED REVENUE EXPENSES BUT IN THE INCOME-TAX RET URN THESE WERE CLAIMED AS REVENUE EXPENSES. THESE DETAILS WERE SUBMITTED BEFO RE THE ASSESSING OFFICER IN THE ORIGINAL RETURN AND NO ADDITION WAS MADE BY THE ASSESSING OFFICER. THUS ACCORDING TO THE LEARNED CIT(APPEALS) THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULL Y AND TRULY AND AFTER EXPIRY OF FOUR YEARS ASSESSING OFFICER CANNOT REOPEN THE ASSESSMENT. 4. LEARNED DR WHILE IMPUGNING THE ORDER OF THE LEAR NED CIT(APPEALS) CONTENDED THAT ASSESSEE HAS CLAIMED THE DEDUCTION O F THESE EXPENSES IN THE COMPUTATION OF INCOME. IT HAS NOT ROUTED THESE EXPE NSES THROUGH THE P & L ACCOUNT THEREFORE THERE WAS FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FOR ITS ASSESSMENT FULLY AND TRULY. REFERRING TO THE EXPLANATION I APPENDED TO SEC. 147 HE POINTED OUT THAT PRODUCT ION OF ACCOUNT BOOK OR 4 OTHER EVIDENCE BEFORE THE ASSESSING OFFICER FROM WH ICH MATERIAL EVIDENCE WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSE SSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE OF ALL MATERIAL FA CT FULLY AND TRULY CONTEMPLATED IN THE PROVISO APPENDED TO SEC. 147 OF THE ACT. IN SUPPORT OF HIS CONTENTION HE RELIED UPON THE DECISION OF HON' BLE BOMBAY HIGH COURT IN THE CASE OF DR. AMIN PATHOLOGY LTD. 252 ITR 673. 5. ON THE OTHER HAND LEARNED COUNSEL FOR THE ASSES SEE RELIED UPON THE ORDER OF THE LEARNED CIT(APPEALS). HE TOOK US THROU GH THE PAPER BOOK. REFERRING TO COMPUTATION OF INCOME AVAILABLE AT PAG E 1 AND 2 OF THE PAPER BOOK HE POINTED OUT THAT THE ASSESSEE HAS SPECIFICA LLY DISCLOSED ABOUT ITS CLAIM OF ADVERTISEMENT EXPENSES. ASSESSING OFFICER IS SUPPOSED TO LOOK INTO THE COMPUTATION OF INCOME. LEARNED COUNSEL FOR THE ASSESSEE THEREAFTER MADE A REFERENCE TO THE NOTE APPENDED WITH FINANCIAL STA TEMENT. HE POINTED OUT THAT DURING THE ORIGINAL ASSESSMENT PROCEEDING ASS ESSING OFFICER HAS RAISED A SPECIFIC QUERY ABOUT ADVERTISEMENT EXPENSES. THUS QUERY IS AVAILABLE AT SR. NO.18 OF THE SHOW-CAUSE NOTICE DATED 17.2.2003 ISSUED BY THE ASSESSING OFFICER. HE TOOK US THROUGH THIS SHOW-CAUSE NOTICE AND THE QUERY OF THE ASSESSING OFFICER. THE ASSESSEE HAS FILED REPLY TO THIS QUERY AND EXPLAINED THE ADVERTISEMENT EXPENSES. ON THE STRENGTH OF THES E DOCUMENTS HE POINTED 5 OUT THAT THERE IS NO FAILURE ON THE PART OF THE ASS ESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY FOR ITS ASSESSMENT. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GON E THROUGH THE RECORDS CAREFULLY. THE ASSESSEE HAS DISCLOSED ALL T HE DETAILS RELEVANT TO ITS CLAIM FOR ADVERTISEMENT EXPENSES. IT HAS MADE THE C LAIM SPECIFICALLY IN THE COMPUTATION OF INCOME. ASSESSING OFFICER HAS INVEST IGATED THIS CLAIM BY RAISING A SPECIFIC QUERY IN THE SHOW-CAUSE NOTICE. THE ASSESSEE HAS REPLIED THIS QUERY AND EXPLAINED THE NATURE OF EXPENSES. TH US THERE IS NO DEFAULT AT THE END OF ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY TRULY FOR ITS ASSESSMENT. ADMITTEDLY NOTICE UNDER SEC. 148 HAS BEEN ISSUED A FTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE I NTERDICTION PROVIDED IN THE PROVISO APPENDED IN SEC. 147 OF THE ACT AND PRO HIBITS THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT BY ISSUANCE OF A NO TICE UNDER SEC. 148 WHERE AN ASSESSMENT UNDER SEC. 143(3) HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR AND FOUR YEARS HAVE EXPIRED FROM TH E END OF THE RELEVANT ASSESSMENT YEAR. THE ASSESSMENT CAN BE REOPENED IF IT IS ESTABLISHED THAT THE INCOME CHARGEABLE TO TAX AS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. SINCE IN THIS CASE THERE IS NO FAI LURE ON THE PART OF THE 6 ASSESSEE THEREFORE ASSESSMENT CANNOT BE REOPENED. LEARNED FIRST APPELLATE AUTHORITY HAS APPRECIATED THE FACTS AND CIRCUMSTANC ES IN RIGHT PERSPECTIVE AND WE DO NOT SEE ANY REASON TO INTERFERE IN HIS OR DER. THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE CROSS-OBJECTION THE ASSESSEE HAS PLEADED THAT LEARNED CIT(APPEALS) HAS NOT DECIDED THE ISSUE ON MERIT BEC AUSE LEARNED FIRST APPELLATE AUTHORITY HAS QUASHED THE ASSESSMENT. IN CASE THE ASSESSMENT IS REVIVED THEN LEARNED CIT(APPEALS) BE DIRECTED TO DE CIDED THE ISSUE ON MERITS. SINCE WE HAVE UPHELD THE ORDER OF THE LEARN ED CIT(APPEALS) THERE IS NO NECESSITY TO ADJUDICATE THE ISSUE ON MERITS. HEN CE CROSS-OBJECTION IS ALSO DISMISSED. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE A S WELL AS THE CROSS- OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 15.01.2 010 ( SHAMIM YAHYA) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/01/2010 MOHAN LAL 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR