M/s QGS Training Institute (P) Ltd., New Delhi v. ITO, New Delhi

ITA 2571/DEL/2010 | 2004-2005
Pronouncement Date: 28-01-2011 | Result: Allowed

Appeal Details

RSA Number 257120114 RSA 2010
Assessee PAN AAACQ0755H
Bench Delhi
Appeal Number ITA 2571/DEL/2010
Duration Of Justice 7 month(s) 28 day(s)
Appellant M/s QGS Training Institute (P) Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 28-01-2011
Date Of Final Hearing 19-01-2011
Next Hearing Date 19-01-2011
Assessment Year 2004-2005
Appeal Filed On 31-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH F BENCH F BENCH F BENCH F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND SHRI C.L.SETHI JUDICIAL MEMBER SHRI C.L.SETHI JUDICIAL MEMBER SHRI C.L.SETHI JUDICIAL MEMBER SHRI C.L.SETHI JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO. 2571/DEL/2010 2571/DEL/2010 2571/DEL/2010 2571/DEL/2010 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2004 2004 2004 2004 - -- - 05 0505 05 M/S QGS TRAINING INSTITUTE M/S QGS TRAINING INSTITUTE M/S QGS TRAINING INSTITUTE M/S QGS TRAINING INSTITUTE (P) LTD. (P) LTD. (P) LTD. (P) LTD. H HH H- -- -13 KIRTI NAGAR 13 KIRTI NAGAR 13 KIRTI NAGAR 13 KIRTI NAGAR NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN NO. PAN NO. PAN NO. PAN NO.AAACQ0755H. AAACQ0755H. AAACQ0755H. AAACQ0755H. VS. VS. VS. VS. INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER WARD WARD WARD WARD- -- -14(4) 14(4) 14(4) 14(4) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED JAIN CA. RESPONDENT BY : SHRI H.K.LAL SR.DR. ORDER ORDER ORDER ORDER PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI J J J JM : M : M : M : THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 19.3.2010 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF AN AS SESSMENT MADE U/S 147/143(3) OF THE INCOME-TAX ACT 1961 PERTAINING T O THE AY 2004-05. 2. IN THIS APPEAL TWO ISSUES ARE INVOLVED WHICH AR E AS UNDER:- (I) WHETHER AO WAS JUSTIFIED ON FACTS AND IN LAW IN INI TIATING PROCEEDINGS U/S 147 READ WITH SECTION 148 OF THE AC T. (II) WHETHER AO WAS JUSTIFIED IN CONFIRMING THE DISALLOW ANCE OF `1 62 500/- MADE BY THE AO ON ACCOUNT OF SOFTWARE DEVELOPMENT CHARGES. 3. WE SHALL FIRST TAKE UP THE ISSUE AS TO WHETHER D ISALLOWANCE OF `1 62 500/- MADE BY THE AO ON ACCOUNT OF SOFTWARE D EVELOPMENT CHARGES HAS BEEN RIGHTLY CONFIRMED BY THE LEARNED C IT(A). ITA-2571/DEL/2010 2 4. IT IS THE AOS CASE THAT A SUM OF `3 25 000/- SH OWN TO HAVE BEEN INCURRED BY THE ASSESSEE TOWARDS SOFTWARE DEVELOPME NT CHARGES IS BOGUS AND IS MERELY AN ACCOMMODATION ENTRY TAKEN FR OM M/S CAM SOFT INDIA (P) LTD. OUT OF THE TOTAL EXPENDITURE CLAIM OF `3 25 000/- A SUM OF `1 62 500/- HAS BEEN CLAIMED BY THE ASSESSEE IN THE CURRENT ASSESSMENT YEAR AND THE BALANCE 50% CLAIMED IN THE SUBSEQUENT ASSESSMENT YEAR 2005-06. IN THIS CASE THE ASSESSE E HAS PRODUCED VARIOUS DOCUMENTS AND PAPERS WHICH ARE PLACED IN TH E PAPER BOOK FILED BY THE ASSESSEE. WE HAVE GONE THROUGH THE LEDGER A CCOUNT OF M/S CAM SOFT INDIA (P) LTD. WHICH IS PLACED AT PAGE 16 OF THE PAPER BOOK. WE FIND THAT THE ASSESSEE HAS CREDITED THE ACCOUNT OF M/S CAM SOFT INDIA (P) LTD. BY `3 25 000/- ON 20.3.2004 ON ACCOU NT OF SOFTWARE DEVELOPMENT CHARGES AGAINST WHICH THE ASSESSEE MAD E A PAYMENT OF `2 LAKHS BY CHEQUE ON 22.3.2004 AND OUT OF WHICH T HE ASSESSEE ALSO DEDUCTED TAX AT SOURCE AMOUNTING TO `4 000/- AND `2 663/- LEAVING A BALANCE OF `1 18 327/- PAYABLE BY THE ASSESSEE. TH E ASSESSEE HAS ALSO PRODUCED BEFORE US THE COPY OF VOUCHER AS WELL AS B ILL SUBMITTED BY M/S CAM SOFT INDIA (P) LTD. THE AO HAS MERELY TREA TED THE TRANSACTION WITH M/S CAM SOFT INDIA (P) LTD. TO BE IN THE NATUR E OF ACCOMMODATION ENTRY ON THE BASIS OF REPORT OF INVESTIGATION OFFIC ER BUT HAS NOT PROVIDED ANY OPPORTUNITY TO THE ASSESSEE TO CROSS-E XAMINE THE PARTY. FURTHER THE AO HAS TREATED THE TRANSACTION TO BE I N THE NATURE OF ACCOMMODATION ENTRY ON THE BASIS OF STATEMENT OF ON E SHRI S.K.GUPTA. HOWEVER ON PERUSAL OF THE STATEMENT OF SHRI S.K.GU PTA NO SUCH ALLEGATION HAS BEEN MADE THAT THE TRANSACTION WITH THE ASSESSEE WAS ACTUALLY NOT UNDERTAKEN BUT WAS MERE A BOOK ENTRY. THE ASSESSEE WAS NOT PROVIDED TO CROSS-EXAMINE SHRI S.K.GUPTA AND TH EREFORE THE INFERENCE DRAWN FROM THE STATEMENT CANNOT BE RELIED UPON PARTICULARLY IN VIEW OF THE FACT THAT THE ASSESSEE HAS PRODUCED THE COPY OF VOUCHER AND BILL ISSUED BY M/S CAM SOFT INDIA (P) LTD. AND PAYMENT HAS BEEN MADE BY ACCOUNT PAYEE CHEQUE. WE THEREFORE HOLD THAT THERE IS NO ITA-2571/DEL/2010 3 SUFFICIENT MATERIAL ON RECORD TO ESTABLISH THAT ASS ESSEE HAS NOT ACTUALLY PURCHASED THE SOFTWARE DEVELOPMENT FROM M/S CAM SOF T INDIA (P) LTD. WE THEREFORE DELETE THE DISALLOWANCE ON THE FACTS OF THE PRESENT CASE. 5. SINCE IN THE REASSESSMENT THE ONLY ADDITION MADE BY THE AO WAS `1 62 500/- BEING 50% OF THE SOFTWARE DEVELOPMENT C HARGES AND THAT HAS BEEN DELETED BY US THE QUESTION ABOUT THE VALI DITY OF REASSESSMENT PROCEEDINGS INITIATED BY THE AO U/S 14 7/148 OF THE ACT HAS BECOME ACADEMIC AND WE THEREFORE DO NOT PROCE ED TO DECIDE THE SAME WHICH HAS BECOME REDUNDANT AT THIS STAGE. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN THE MANNER AS INDICATED ABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY 2011. SD/- SD/- (G.E.VEERABHADRAPPA (G.E.VEERABHADRAPPA (G.E.VEERABHADRAPPA (G.E.VEERABHADRAPPA ) )) ) (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI ) )) ) VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT JUDI JUDI JUDI JUDI CIAL MEMBER CIAL MEMBER CIAL MEMBER CIAL MEMBER DATED : 28.01.2011. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR ITA-2571/DEL/2010 4