ACIT, New Delhi v. M/s Rajendra Ravindra Printers Pvt. Ltd.,, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE AND SHRI K.D. RANJAN SHRI GEORGE MATHAN I.T.A. NO.2145/DEL./2009 (ASSESSMENT YEAR: 2003-04) ACIT CIRCLE 15(1) VS. M/S RAJENDRA RAVINDRA PRIN TERS PVT. LTD. NEW DELHI. 7361 RAVINDRA MANSION RAM NAGAR NEW DELHI. (PAN/GIR NO.AACCR0832N) (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. SWEETY KOTHARY AR REVENUE BY : SHRI H.K. LAL SR.DR ORDER PER K.D. RANJAN AM : THIS APPEAL BY THE REVENUE FOR AY 2003-04 ARISES O UT OF ORDER OF CIT(A)-XVIII NEW DELHI. THE MAIN GROUND OF APPEAL RAISED READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.68.29 LACS IN UNDERSTAT EMENT OF INCOME ON ACCOUNT OF DIFFERENCE OF INCOME AS PER TDS CERTIFICATES AND P& L A/C BY RELYING ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT REPORTED IN 227 ITR 172 WH EREIN IT HAS BEEN HELD THAT ENTRIES IN THE BOOKS OF ACCOUNTS ARE NOT DETERMINAT IVE OF IMPLICATION OF A TRANSACTION AND THIS JUDGMENT HAS NOT RELEVANCE TO THE PRESENT CASE. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO DELE TING THE ADDITION OF RS.68.29 LAKH ON ACCOUNT OF UNDERSTATEMENT OF INCOME BEING THE DI FFERENCE ON ACCOUNT OF INCOME AS PER TDS CERTIFICATE AND P&L A/C. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PRINTING OF B OOKS ON JOB WORK BASIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAD CREDITED RS.455.99 LAKH ON ACCOUNT OF JOB WORK BUT AS PER TDS CERTIFI CATE THE JOB WORK RECEIPT WERE AT RS.524.28 LAKH. THE ASSESSEE WAS ASKED TO EXPLAIN THE DIFFERENCE OF RS.68.29 LAKH. THE ASSESSEE FILED RECONCILIATION STATEMENT AND SUBMITT ED THAT THERE WAS NO DIFFERENCE BETWEEN THE AMOUNTS SHOWN IN TDS CERTIFICATE AS ADM ITTED BY THE ASSESSEE. HOWEVER I.T.A. NO.2145/DEL./2009 (A.Y. : 2003-04) 2 THIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED. THE AO PROCEEDED TO MAKE ADDITION OF RS.68.29 LAKH. 3. BEFORE THE CIT(A) THE ASSESSEE FILED RECONCILIA TION CERTIFICATE BETWEEN THE SALES AS PER TDS CERTIFICATE AND ACTUALLY ADMITTED IN THE BOOKS OF ACCOUNT. IT WAS SUBMITTED THAT THE DIFFERENCE IN TWO FIGURES WAS BECAUSE OF ENTRIES MADE IN THE BOOKS OF ACCOUNT ON ACCOUNT OF COMPOSING CHARGES REVERSED CREDIT NOTES ISSUED TO CUSTOMERS; AND DISCOUNT GIVEN TO THE CUSTOMERS. THE ASSESSEE EXPLAINED IN DETAIL THE DIFFERENCE BETWEEN THE TWO FIGURES. THE CIT(A) AFTER CONSIDERING THE EXPLANAT ION OFFERED BY THE ASSESSEE DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE FINDINGS OF THE AO AND WRI TTEN SUBMISSIONS FILED BY THE APPELLANT. THE FUNDAMENTAL OBJECTION OF THE AO AS WOULD BE SEEN FROM THE ORDER OF ASSESSMENT IS IN RESPECT OF NARRATION IN THE BOO KS OF THE ASSESSEE. ACCORDING TO HIM RECEIPTS OF THE ASSESSEE FROM THE PARTIES HAVE BEEN MARKED AS TO LAMINATION SALES A/C WHEREAS THE PAYMENT HAS BEEN MARKED AS BY PRINTING SALE A/C AND NOWHERE IN THE NARRATIONS IT HAS BEE N STATED AS COMPOSING CHARGES REVERSED CREDIT NOTES ISSUED TO CUSTOMER AND DISCO UNT GIVEN TO CUSTOMER. HOWEVER WHAT HAS NOT BEEN DISPUTED MOST CRUCIALLY IS THAT THERE HAS BEEN PAYMENTS. MERE FACT THAT THERE IS A NOMENCLATURE D IFFERENCE CANNOT BE A GROUND TO SUGGEST THAT HE SALES AS DISCLOSED IN THE BOOKS OF ACCOUNTS ARE NOT CORRECT. THE FACT THAT THE APPELLANT ALLOWED CONCESSION TO THE C USTOMERS AND SAID CONCESSION HAS BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS IRR ESPECTIVE OF THE NOMENCLATURE CANNOT BE DOUBTED IN LIGHT OF THE EVIDENCES SO FURN ISHED BEFORE ME. MERE FACT THAT PARTIES ARE COVERED UNDER SECTION 40(A)(2)(B) OF TH E ACT AGAIN CANNOT BE A GROUND TO SUGGEST THAT CONCESSION AS STATED IN THE RECONCI LIATION STATEMENT HAD NOT BEEN PROVIDED. THE FACT OF DISCOUNT HAVING BEEN GRANTED AND THE CHARGES HAVING BEEN REVERSED IS CLEARLY VERIFIED FROM THE BOOKS OF ACCO UNT WHICH HAS NOT BEEN DISPUTED BY THE AO IN THE ORDER OF ASSESSMENT. HE HAS MEREL Y PROCEEDED ON NOMENCLATURE OF THE ENTRIES IN THE BOOKS OF ACCOUNT AND WHICH IS NOT A VALID BASIS IN LAW AS HAS BEEN HELD BY THE APEX COURT IN THE CASE OF TUTICORI N ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT REPORTED IN 227 ITR 172 WH EREIN IT HAS BEEN HELD THAT ENTRIES IN THE BOOKS OF ACCOUNT ARE NOT DETERMINATI VE OF IMPLICATION OF A TRANSACTION. LIKEWISE IN THE CASE OF CIT VS. M/S S HOORJI VALLABHDAS AND COMPANY REPORTED IN 46 ITR 144 IT HAS BEEN HELD TH AT NOTIONAL INCOME CANNOT BE BROUGHT O TAX. APPLYING THE ABOVE TO THE FACTS OF THE CASE OF THE ASSESSEE IT WILL BE SEEN THAT ADDITION OF RS.68.29 LAKH IS MERELY B ASED ON NOMENCLATURE DIFFERENCE AND IS NOT BASED ON THE EVIDENCE WHICH E STABLISHES THAT SALES OF RS.68.29 LAKH HAVE NOT BEEN CORRECTLY DISCLOSED BY THE APPELLANT. THERE IS NO MATERIAL WHICH CAN ENABLE THE AO TO ASSUME AND HOLD THAT THE ASSESSEE HAS NOT GIVEN DISCOUNT OF RS.27.50 LAKH OR COMPOSING CHARGE S HAS NOT BEEN REVERSED. IN VIEW THEREOF ADDITION MADE OF RS.68.29 LAKH IS DEL ETED. I.T.A. NO.2145/DEL./2009 (A.Y. : 2003-04) 3 4. BEFORE US LD.SR.DR SUPPORTED THE ORDER OF CIT(A ) WHEREAS LD.AR OF THE ASSESSEE EXPLAINED THE DIFFERENCE IN THE FIGURES. IT WAS STATED BY HER THAT THE DIFFERENCE WAS RECONCILED BUT THE AO HAD NOT CONSIDERED THE E XPLANATION GIVEN BY THE ASSESSEE. SHE SUPPORTED THE ORDER OF CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE ORDER OF THE CIT(A) WE FIND THAT HE HAD HI MSELF VERIFIED THE FIGURES AND HAD COME TO THE CONCLUSION THAT THE SALES HAVE BEEN COR RECTLY REFLECTED IN THE P&L A/C. IN VIEW OF FINDING GIVEN BY THE CIT(A) AND IN VIEW OF THE FACTS THAT NOTHING CONTRARY TO THE FINDING OF THE CIT(A) WAS BROUGHT ON RECORD BY THE LD.SR.DR IN OUR CONSIDERED OPINION THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. HENCE NO INTERFERENCE IS CALLED FOR IN THE ORDER PASSED BY THE CIT(A) ALLOWING THE RELIEF TO THE ASSESSEE. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. 7. ORDER PRONOUNCED IN OPEN COURT AFTER THE CONCLUS ION OF THE HEARING OF THE APPEAL ON 18.01.2010. SD/- SD/- (GEORGE MATHAN) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED JAN. 18 2010. SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVIII NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR/ITAT I.T.A. NO.2145/DEL./2009 (A.Y. : 2003-04) 4