Casio India Company Pvt. Lmt., New Delhi v. ITO, New Delhi

ITA 2103/DEL/2010 | 1998-1999
Pronouncement Date: 08-07-2011 | Result: Dismissed

Appeal Details

RSA Number 210320114 RSA 2010
Bench Delhi
Appeal Number ITA 2103/DEL/2010
Duration Of Justice 1 year(s) 2 month(s) 2 day(s)
Appellant Casio India Company Pvt. Lmt., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 08-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 08-07-2011
Date Of Final Hearing 20-06-2011
Next Hearing Date 20-06-2011
Assessment Year 1998-1999
Appeal Filed On 06-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A. NO.2103/D/2010 ASSESSMENT YEAR: 1998-99 M/S CASIO INDIA CO. PVT. LTD. VS. INCOME TAX OFFICER 210 1 ST FLOOR OKHLA INDL. AREA WARD 3(2) PHASE-III NEW DELHI NEW DELHI PAN/GIR NO.C-13 I.T.A. NO.2118/D/2010 ASSESSMENT YEAR :1998-99 INCOME TAX OFFICER VS. M/S CASIO INDIA CO. (P) LTD. WARD 3(2) 217A OKHLA INDL. AREA PHASE NEW DELHI -III NEW DELHI-20 PAN/GIR NO.C-13 (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI SALIL KAPOOR & SANAT KA POOR ADVOCATES RESPONDENT BY : SHRI KISHORE B. SR. DR ORDER PER K.G. BANSAL: AM: THESE CROSS APPEALS OF THE ASSESSEE AND THE REVENUE WERE ARGUED IN A CONSOLIDATED MANNER BY THE LEARNED COUNSE L FOR THE ASSESSEE AND THE LEARNED DR. THEREFORE A CONSOLIDATED ORDER IS PASSED. 2. THE FACTS ARE THAT THE ASSESSEE FILED ITS RETURN ON 30 .11.1998 DECLARING LOSS OF `70 21 180/-. THE RETURN WAS PROCESSE D U/S 143(1)(A) OF THE INCOME-TAX ACT 1961 ON 26.03.1999 AND THER EAFTER STATUTORY NOTICE U/S 143(2) WAS ISSUED ON 28.05.1999 FOR SCRUTINIZ ING RETURN OF INCOME. THE ASSESSE-COMPANY IS ENGAGED IN THE BUSINESS OF 2103-2118-2010-CIC 2 MANUFACTURING MARKETING AND SERVICING RADIO PAGERS. AFTER HEARING THE ASSESSEE ASSESSMENT U/S 143(3) WAS COMPLETED ON 31.01.20 01 AT TOTAL INCOME OF `1 15 16 776/-. THIS INCOME WAS SET O FF AGAINST BROUGHT FORWARD LOSSES TO THE EXTENT OF THE AVAILABILI TY OF INCOME IN THIS YEAR. THUS THE ASSESSEE WAS ASSESSED AT NIL INCOME. WHILE COMPLETING THIS ASSESSMENT THREE AMOUNTS WERE DEDUCTED F ROM THE RETURNED LOSS NAMELY; - (I) `12 16 287/- BY CAPITALI ZATION OF SERVICE PAGERS; (II) PAGERS MEANT FOR CAPTIVE CONSUMPTION - `17 94 000/-; AND (III) PAGERS WITH REGIONAL OFFICE - `1 78 729/-. PE NALTY PROCEEDINGS WERE ALSO INITIATED U/S 271(1)(C) OF THE ACT. THESE PROCEE DINGS WERE DISPOSED OF ON 31.03.2009 BY LEVYING MINIMUM PENALTY OF `11 16 155/- . 2.1 THE ASSESSEE MOVED AN APPEAL BEFORE THE CIT(A)-VI NEW DELHI WHO DISPOSED IT OFF ON 09.02.2010 IN APPEAL NO.27/200 9-10 IN WHICH THE APPEAL WAS PARTLY ALLOWED. BOTH THE ASSESSEE AND TH E REVENUE HAVE FILED APPEAL AGAINST THIS ORDER. 3. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE TRIBUNAL PASSED THE ORDER IN QUANTUM APPEAL ON 31 .12.2009. THIS ORDER WAS RECTIFIED BY THE TRIBUNAL ON 12.11.2010 U/ S 254(2). THE FINAL POSITION IN RESPECT OF THE ADDITIONS WAS SUBMITTED BY WA Y OF A CHART WHICH HAS BEEN PLACED ON RECORD. 3.1 IN SO FAR AS THE APPEAL OF THE ASSESSEE IS CONCERNED IT IS SUBMITTED THAT THE ADDITION OF `1 78 729/- ON ACCOUN T OF SHORTAGE/REDUCTION IN THE VALUE OF THE PAGERS HAS BEEN DELETED BY THE TRIBUNAL AS PER PARAGRAPH NO.3.2 OF THE ORDER. IN R EGARD TO THE OTHER SUM OF `7 62 989/- REGARDING DEMONSTRATION PAGERS THE TRIBUNAL HAS UPHELD THE ACTION OF CAPITALIZATION OF THE EXPENDIT URE AND ALLOWING DEPRECIATION THEREON. 2103-2118-2010-CIC 3 3.2 COMING TO THE APPEAL OF THE REVENUE THE FIRST P OINT IS REGARDING SERVICE PAGERS WHICH LED TO ADDITION OF `3 60 519/-. THESE PAGERS ARE GIVEN TO THE CUSTOMERS WHEN A DEFECTIVE PAGER IS BROUG HT FOR REPAIRS. THE TRIBUNAL HAS HELD THAT THE ASSESSEE IS NOT ENTITLED T O WRITE OFF THE PAGERS BUT IS ENTITLED TO THE DEDUCTION OF DEPRECIATI ON ON THEIR WRITTEN DOWN VALUE. THE SECOND POINT IS REGARDING PAGERS GIVE N TO STAFF MEMBERS WHICH LED TO ADDITION OF `92 779/-. IN RESP ECT OF THESE PAGERS ALSO THE TRIBUNAL HAS ALLOWED DEDUCTION OF DEP RECIATION ONLY AND NOT THE FULL VALUE THEREOF. THE THIRD POINT IS REGARDING CAPTIVE CONSUMPTION OF PAGERS AMOUNTING TO `17 94 000/-. THE CASE OF THE ASSESSEE WAS THAT THESE PAGERS ARE MEANT TO BE GIVEN AS FRE E SAMPLES TO THE DEALERS AS A MEASURE OF SALES PROMOTION AND THER EFORE REPRESENT REVENUE EXPENDITURE. HOWEVER IN QUANTUM APPEAL THE TRIBUNAL DID NOT ALLOW THE CLAIM BUT HELD THAT THE ASSESSEE IS ENTITLED TO DEPRECIATION THEREON. 3.3 THE CASE OF THE LEARNED COUNSEL IS THAT THE ISSUE WH ETHER THE EXPENDITURE IS REVENUE OR CAPITAL IS CAPABLE OF DIFFE RING INTERPRETATION. THE ASSESSEE HAD FURNISHED ALL THE FACTS REGARDING THE CL AIM MADE IN THE ASSESSMENT. THEREFORE THE PENALTY CANNOT BE LEVIE D. 3.4 ON THE OTHER HAND THE LEARNED DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. IN THE ASSESSMENT ORDER IT IS MENTIONED THAT THE DISALLOWANCE IN THIS YEAR IS MADE ON THE SAME BASIS AS IN ASSESSMENT YEAR 1997-98. IN THAT YEAR A FINDING WAS GIVEN THA T THE PAGERS WERE SOLD WITHOUT RECORDING SALES PROCEEDS IN THE BOOKS OF AC COUNT. IN REGARD TO PAGERS WITH REGIONAL OFFICE/STAFF IT HAS BE EN MENTIONED THAT THE ASSESSEE HAS NOT PROVIDED SATISFACTORY BASIS TO WRITE TH EM OFF. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIO NS MADE BEFORE US. FROM THE HISTORY OF THE CASE MENTIONED ABO VE IT IS CLEAR THAT THE TRIBUNAL HAS ALLOWED RELIEF TO THE ASSESSEE OR IT HAS CAPITALIZED THE EXPENDITURE. ON THE CAPITALIZED EXPENDITURE T HE ASSESSEE HAS BEEN ALLOWED TO DEDUCT THE DEPRECIATION. THEREFORE IT CANNOT BE SAID 2103-2118-2010-CIC 4 THAT ANY PAGERS WERE SOLD AND THE SALE PROCEEDS WERE NO T RECORDED IN THE BOOKS OF ACCOUNT. IT ALSO CANNOT BE SAID THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE ITS CLAIM OF DEPLOYING PAGER S FOR THE STATED PURPOSES. IN THE CASE OF CIT VS. RELIANCE PETRO PRODUC TS (P) LTD. (2010) 322 ITR 158 (SUPREME COURT) IT HAS BEEN HELD THAT W HEN ALL THE FACTS REGARDING A CLAIM HAVE BEEN DISCLOSED IN THE RETURN O F INCOME THEN MERELY MAKING THE CLAIM CANNOT LEAD TO THE CHARGE O F FURNISHING INACCURATE PARTICULARS. THE REASON IS THAT THE WORD PARTICULARS MEAN THE DETAILS ETC. SUBMITTED AND NOT THE CLAIM RAISED ON THE BASIS OF SUCH DETAILS. THE REVENUE HAD MENTIONED ABOUT FALSITY OF FACTS IN RESPECT OF ONE POINT WHEN IT WAS HELD THAT PAGERS HAVE BEEN SOLD AND SALE PROCEEDS HAVE NOT BEEN ACCOUNTED FOR IN THE BOOKS. T HIS FINDING HAS BEEN DISPLACED BY THE TRIBUNAL BY HOLDING THAT THE A SSESSEE IS ENTITLED TO THE DEDUCTION OF DEPRECIATION ON SUCH PAGERS. THU S IT CAN BE SAID THAT FACTS HAVE BEEN CORRECTLY FURNISHED BUT CLAIM OF REVENUE EXPENDITURE HAS NOT BEEN ACCEPTED AND ONLY DEPRECIAT ION HAS BEEN ALLOWED. THE QUESTION REGARDING AN EXPENDITURE BEIN G CAPITAL OR REVENUE IS ALWAYS A VEXED QUESTION ON WHICH TWO OPINIO NS MAY BE FEASIBLE. THAT DOES NOT LEAD TO THE INTERFERENCE OF FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF THE PENALTY. 5. IN RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED AND T HAT OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN OPEN COURT ON 08.07.2011 . SD/- SD/- ( RAJPAL YADAV ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTANT ME MBER DT.08.07.2011. NS 2103-2118-2010-CIC 5 COPY FORWARDED TO:- 1. M/S CASIO INDIA CO. PVT. LTD. 210 1 ST FLOOR OKHLA INDL. AREA PHASE-III NEW DELHI. 2. INCOME TAX OFFICER WARD 3(2) NEW DELHI. 3. THE CIT 4. THE CIT (A) NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY BY ORDER (ITAT NEW DELHI).