Onkar International Pvt. Ltd., New Delhi v. DCIT, New Delhi

ITA 2327/DEL/2011 | 2002-2003
Pronouncement Date: 24-11-2011 | Result: Allowed

Appeal Details

RSA Number 232720114 RSA 2011
Assessee PAN AAACO7415N
Bench Delhi
Appeal Number ITA 2327/DEL/2011
Duration Of Justice 6 month(s) 15 day(s)
Appellant Onkar International Pvt. Ltd., New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 24-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 24-11-2011
Date Of Final Hearing 16-11-2011
Next Hearing Date 16-11-2011
Assessment Year 2002-2003
Appeal Filed On 09-05-2011
Judgment Text
ITA NOS. 2327-2328/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NOS. 2327 & 2328/DEL/2011 A.YRS. : 2002-03 & 2003-04 ONKAR INTERNATIONAL PVT. LTD. H-32 CONNAUGHT CIRCUS NEW DELHI 110 001 (PAN/GIR NO. : AAACO7415N) VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-13(1) 4 TH FLOOR CR BUILDING NEW DELHI 110 002 (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. M.S. SEKHON CA DEPARTMENT BY : S H. R.S. NEGI SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINS T THE RESPECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS) PERTAINING TO ASSESSMENT YEARS 2002-03 & 2003-04. S INCE THE ISSUES ARE CONNECTED AND APPEALS WERE HEARD TOGETHER THES E ARE BEING CONSOLIDATED AND DISPOSED OF BY THIS COMMON ORDER FO R THE SAKE OF CONVENIENCE. 2. THE ISSUE RAISED IN ITA NO. 2327/DEL/2011 IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF ` 5 61 000/- BEING THE AMOUNT OF TH E LEASE RENT IN RESPECT OF LEASED VEHICLE WHICH WAS PAID TO V.K. TO URS AND TRANSPORT. 3. THE ISSUE RAISED IN ITA NO. 2328/DEL/2011 IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ITA NOS. 2327-2328/DEL/2011 2 DISALLOWANCE OF ` 3 92 700/- BEING THE AMOUNT OF TH E LEASE RENT IN RESPECT OF LEASED VEHICLE WHICH WAS PAID TO V.K. TO URS AND TRANSPORT. 4. IN THIS CASE ASSESSEE TOOK ON LEASE THE TOYATA LAND CRUSIER BEARING REGISTRATION NO. DL3SX0666 FROM ONE MR. SANJAY BHANDARI OF V.K. TOURS AND TRANSPORT VIDE LEASE AGREEMENT DATED 7.5.2011 FOR A PERIOD OF THREE YEARS STARTING FROM 7.5.2001 AND END ING ON 6.5.2004 ON A MONTHLY LEASE RENT OF ` 56 100/- WHICH CAME TO ` 2 0 19 600/- FOR THE ENTIRE THREE YEAR PERIOD. ASSESSEE HAS PAID ONLY 17 INSTALMENTS TOWARDS LEASE RENT. THE REMAINING INSTALMENTS WER E NOT PAID FOR THE REASON THAT THE ASSESSEE RECEIVED ENQUIRIES FROM DRI AND ASSESSEE DECIDED TO EXIT FROM THE ARRANGEMENT. IN ADDITION TO THE MONTHLY LEASE RENT THE ASSESSEE ALSO GAVE AN INTEREST FRE E SECURITY DEPOSIT OF ` 20 00 000/-. ASSESSING OFFICER IN THIS CASE R EFERRED TO THE INVESTIGATION REPORT OF THE DRI WHEREIN IT WAS OBSE RVED THAT SANJAY BHANDARI AND HIS CONCERN IMPORTED DIFFERENT MODELS OF FOREIGN CARS UNDER THE EPCG SCHEME BUT VIOLATED THE PROVISIONS OF THE SCHEME BY SELLING THESE VEHICLES IN THE MARKET. THE VEHICL E IN THIS CASE WAS ALSO ALLEGED TO BE FALLING UNDER THE SAME INVESTI GATION. THE ASSESSEES EXPLANATION FOR LEASE AGREEMENT IN THIS REGARD WAS DISBELIEVED BY THE ASSESSING OFFICER AND ASSESSING OFFICER PROCEEDED TO DISALLOW THE LEASE RENT PAID AMOUNTING TO ` 5 6 1 000/- FOR A.Y. 2002-03 AND ` 3 92 000/- FOR A.Y. 2003-04. 5. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS MADE RELIA NCE UPON THE REPORT OF THE INVESTIGATION DIRECTOR WITHOUT CARRYIN G ANY ENQUIRIES AT HIS END. HOWEVER LD. COMMISSIONER OF INCOME TA X (APPEALS) NOTED THAT IT IS SEEN THAT ASSESSING OFFICER HAS REOPENE D THE CASE AND ITA NOS. 2327-2328/DEL/2011 3 COMPLETED THE REASSESSMENT PROCEEDINGS ON THE BASIS OF THE REPORT RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMEN T WHICH IN TURN HAD RECEIVED REPORT FROM THE DRI. SHRI SANJAY BHANDA RI AND HIS CONCERNS WERE IN THE PRACTICE OF MISUSING THE EPCG SC HEME BY WAY OF IMPORTING THE VEHICLES UNDER THE SCHEME AGAINST I MPORT LICENSE BY PAYING CONCESSIONAL RATE OF DUTY. THESE VEHICLES WERE MEANT FOR HOTELS TOUR OPERATORS ETC. FOR THE PURPOSE OF EAR NING FOREIGN EXCHANGE BUT WERE SOLD TO PRIVATE PARTIES LIKE THE ASSESSEE THEREBY LEADING TO EVASION OF CUSTOM DUTY. LD. COMMISSIONER OF INCOME TAX (APPEALS) PROCEEDED TO CONFIRM THE ORDER OF THE ASSESSING OFF ICER. 6. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APP EAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT MATERIAL ON RECORD SHOW THAT (I) THE AGREEMENT WAS ONLY FOR LEASE OF VEHICLE; (II) THE INTEREST FREE SECUR ITY DEPOSIT WAS TO BE REFUNDED TO THE ASSESSEE ON EXPIRY OR MUTUAL TERMIN ATION OF THE LEASE; (III) THE VEHICLE WAS REGISTERED UNDER THE NAME OF V .K. TOURS & TRAVELS BY THE DEPARTMENT OF TRANSPORT NEW DELHI; (IV) THE ASSESSEE WROTE TO MR. SANJAY BHANDARI PROP. VK TOURS AND TRANSPORT VID E LETTER DATED 7.10.2002 TO EXIT FROM THE ARRANGEMENT; (V) THE ABOV E WAS ACKNOWLEDGED BY VK TOURS AND TRANSPORT VIDE THEIR L ETTER DATED 25.11.2002; (VI) THE OWNERSHIP OF THE VEHICLE EVE N AS ON DATE IS IN THE NAME OF VK TROURS AND TRANSPORT; (VII) VK TOUR S AND TRANSPORT HAS YET TO REFUND THE SECURITY DEPOSIT OF ` 20 00 0 00/- WHICH EVEN AS ON DATE IS BEING REFLECTED AS AN ASSET IN THE ASSE SSEES BALANCE SHEET; (VIII) MR. SANJAY BHANDARI OF VK TOURS AND TRANSPORT HAS ADMITTED THE FINDING OF THE PRINCIPAL BENCH OF CUSTOMS AND CENTRA L EXCISE ITA NOS. 2327-2328/DEL/2011 4 SETTLEMENT COMMISSION THAT THE VEHICLE BELONGS TO HIM AND THAT CONSEQUENTLY THE ADDITIONAL CUSTOMS DUTY THE CONSE QUENTIAL INTEREST THE REDEMPTION FINE ALL ARE PAYABLE BY HIM. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT THERE IS A VALID LEASE AGRE EMENT BETWEEN ASSESSEE AND THE LESSOR V.K. TOURS & TRANSPORT. I T IS ALSO NOT DISPUTED THAT ASSESSEE HAS PAID LEASE RENTALS AS PER THE AGR EEMENT. ONLY ON THE BASIS OF INVESTIGATION WING REPORT THE AUTHORIT IES BELOW HAVE DISBELIEVED THESE FACTUAL DETAILS WITHOUT BRINGIN G ANY COGENT MATERIAL ON RECORD. IN OUR CONSIDERED OPINION UNDER THE FA CTS AND CIRCUMSTANCES OF THE CASE THE ASSESSEES CLAIM OF LE ASE RENTALS PAID IS A VALID ONE. ACCORDINGLY WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSE E. 9. IN THE RESULT BOTH THE APPEALS FILED BY THE A SSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/11/2011. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [ [[ [A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 24/11/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES