LEA Associates South Asia Pvt. Ltd., New Delhi v. DCIT, New Delhi

ITA 3529/DEL/2011 | 2006-2007
Pronouncement Date: 22-09-2011 | Result: Allowed

Appeal Details

RSA Number 352920114 RSA 2011
Assessee PAN AAACL2060N
Bench Delhi
Appeal Number ITA 3529/DEL/2011
Duration Of Justice 2 month(s) 10 day(s)
Appellant LEA Associates South Asia Pvt. Ltd., New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 22-09-2011
Date Of Final Hearing 22-11-2011
Next Hearing Date 22-11-2011
Assessment Year 2006-2007
Appeal Filed On 12-07-2011
Judgment Text
ITA NO. 3624/D/2011 & 3529/D/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER AND SHRI A.N. PAHUJA ACCOUNTANT MEMBER ITA NO.3624/DEL/2011 ASSTT. YEAR: 2006-07 ASSTT. COMMISSIONER OF INCOME TAX VS LEA ASSOCI ATES SOUTH ASIA PVT. CIRCLE-4(1) ROOM NO. 407 L TD. B-1/E-27 C.R. BUILDING I.P. ESTATE MOHAN COOPERATIVE INDL. AREA NEW DELHI. MATHURA ROAD NEW DE LHI. ITA NO.3529/DEL/2011 ASSTT. YEAR: 2006-07 LEA ASSOCIATES SOUTH ASIA PVT. VS DCIT CIRC LE 4(1) LTD. NEW DELHI. NEW DELHI. (PAN NO. AAACL2060N) (APPELLANT) (RESPONDENT) APPELLANT BY: MS Y. KAKKAR DR RESPONDENT BY: SHRI K . SAMPATH O R D E R PER SHRI C.L. SETHI J.M. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS THE REVENUE DIRECTED AGAINST THE ORDER DATED 27.5.2011 PASSED B Y THE LD. CIT(A) IN THE MATTER OF AN ORDER PASSED BY THE AO U/S 154 OF THE INCOME TAX ACT 1961 DATED 31.1.2011 FOR ASSTT. YEAR 2006-07. 2. THE ONLY GROUND RAISED BY THE REVENUE IS AS UNDE R:- ITA NO. 3624/D/2011 & 3529/D/2011 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS.21 16 632/- MADE ON ACCOUNT OF INTEREST PAID ON SERVICE TAX. 2.1 THE LD. CIT(A) IGNORED THE FINDING RECORDED BY THE AO AND FACT THAT THE INTEREST HAS BEEN PAID ON ACCOUNT OF DEFAULT ON THE PART OF THE ASSESSEE. 3. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE ORDER PASSED BY THE AUTHORITIES BELOW IS DE VOID OF THE JURISDICTION AND MUST BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ACTION OF THE AUTHORITIES BELOW IN ADDING AN AM OUNT OF RS.21 16 632/- TO THE INCOME OF THE APPELLANT BEING THE SHARE OF THE INCOME OF THE APPELLANT FROM A JOINT VENTURE ALREADY TAXED IN THE HANDS OF THE JOINT VENTURE IS CONTRARY TO FACTS OF THE CASE AND THE LAW BEARING ON THE SUBJECT AND OUG HT TO BE QUASHED. 4. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 5. IN THIS CASE THE ORIGINAL ASSESSMENT U/S 143(3) OF THE I.T. ACT 1961 WAS MADE BY THE AO ON 1.10.2008 DETERMINING THE TOT AL INCOME AT RS.64 43 320. THEREAFTER IT WAS REVEALED TO THE A O THAT THE ASSESSEE DEDUCTED SHARE INCOME OF RS. 21 16 632/- RECEIVED F ROM AOP/BOI IN THE COMPUTATION OF INCOME THOUGH IT WAS NOT SHOWN IN TH E PROFIT & LOSS ACCOUNT. IT WAS FURTHER NOTED BY THE AO THAT AS PER NOTE NO. 10 PROVISION OF SERVICE ITA NO. 3624/D/2011 & 3529/D/2011 3 TAX AMOUNTING TO RS.1 00 78 000 WAS MADE BUT ONLY R S.79 62 269 WAS ADDED BACK TO THE INCOME OF THE YEAR. THE AO THER EFORE ISSUED A NOTICE U/S 154 DATED 27.7.2010 PROPOSING TO MAKE THE FOLLOWING TWO ADDITIONS:- A) SHARE INCOME OF RS.21 16 632 FROM AOP/BOI DEDUCTED FROM THE COMPUTATION OF INCOME THOUGH NOT SHOWN IN THE PROFIT & LOSS ACCOUNT; B) THE DIFFERENCE OF RS.21 15 731 (RS. 1 00 78 000 RS.79 62 269/-) ON ACCOUNT OF THE PROVISION FOR SER VICE TAX. IN RESPONSE TO THE AOS NOTICE U/S 154 THE ASSESSE E FILED A REPLY DATED 5.8.2010 WHEREIN IT WAS STATED BY THE ASSESSEE THA T SHARE RECEIVED FROM JOINT VENTURE WAS RS. 94 80 349 AND NET INCOME FROM AOP/B OI WAS REFLECTED AT RS. 21 16 632 IN THE PROFIT & LOSS ACCOUNT WHICH WA S CLAIMED AS EXEMPTED. THE ASSESSEE FURTHER SUBMITTED THAT OUT OF A PROVIS ION OF RS.1 00 78 000 A SUM OF RS.79 62 269 WAS TOWARDS PROVISION OF SERVIC E TAX AND THE BALANCE SUM OF RS.21 16 632 WAS TOWARDS PROVISION OF INTERE ST ON SAID SERVICE TAX AND THEREFORE NO ADDITION WAS CALLED FOR. 6. THE AO CONSIDERED THE ASSESSEES REPLY AND HAS TAKEN A VIEW THAT THE AFORESAID AMOUNT OF RS.21 16 632 ON ACCOUNT OF SHAR E PROFIT FROM AOP/BOI AND THE PROVISIONS OF RS.21 15 731 ARE LIABLE TO BE ADDED BACK TO THE ITA NO. 3624/D/2011 & 3529/D/2011 4 ASSESSEES TOTAL INCOME. THE AO THEREFORE MADE T HE AFORESAID TWO ADDITIONS BY WAY OF HIS ORDER PASSED U/S 154 OF THE ACT DATED 31.1.2011. 7. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LD. CIT(A). 8. AFTER HEARING THE ASSESSEE AND CONSIDERING THE M ATERIAL ON RECORD THE LD. CIT(A) DELETED THE ADDITION ON ACCOUNT OF SERVI CE TAX AMOUNTING TO RS.21 15 731 ON ACCOUNT OF INTEREST PAID ON SERVICE TAX BUT UPHELD THE ADDITION OF RS.21 16 632 ON ACCOUNT OF SHARE OF PRO FIT FROM BOP AND AOI. HENCE BOTH THE REVENUE AND THE ASSESSEE ARE IN APP EAL BEFORE US. IN THE REVENUES APPEAL THE CORRECT AMOUNT OF ADDITION IN VOLVED IS RS. 21 15 731 AND NOT RS.21 16 632 WHICH IS WRONGLY STATED IN THE GROUNDS. 9. IN THE APPEAL FILED BY THE ASSESSEE THE ASSESSE E HAS TAKEN A PRELIMINARY LEGAL GROUND TO THE EFFECT THAT THE ORD ER PASSED BY THE AO IS DEVOID OF JURISDICTION AND MUST BE QUASHED. 10. SINCE THE VERY PRELIMINARY GROUND ON THE QUESTI ON OF LAW RAISED BY THE ASSESSEE GOES TO THE ROOT OF THE MATTER RELATING TO THE AOS JURISDICTION TO PASS AN ORDER U/S 154 OF THE ACT WE PROCEED FIRST TO DECIDE THE SAME. 11. ON PERUSAL OF LD. CIT(A)S ORDER AS WELL AS GRO UND TAKEN BEFORE HIM WE FIND THAT THE ASSESSEE HAS NOT TAKEN SUCH A GROU ND BEFORE THE LD. CIT(A) THAT THE ORDER PASSED BY THE AO U/S 154 WAS BEYOND HIS JURISDICTION ITA NO. 3624/D/2011 & 3529/D/2011 5 INASMUCH AS PROVISIONS OF SECTION 154 OF THE ACT AR E NOT APPLICABLE TO THE MATTER CONSIDERED BY THE AO IN HIS ORDER U/S 154 OF THE ACT. HOWEVER THIS IS A PURE QUESTION OF LAW THAT GOES TO THE ROOT OF THE MATTER. WE THEREFORE ADMIT THIS GROUND FOR DECISION. HOWEVER THIS ISSU E HAS NOT BEEN CONSIDERED BY THE CIT(A) AND THEREFORE AFTER DELIBERATING WI TH THE REPRESENTATIVES OF BOTH THE PARTIES WE FIND IT FIT AND PROPER TO SET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR HIS FRESH ADJUDICATION. THE LD. CIT(A) SHALL ALSO DECIDE THE ISSUE AS TO WH ETHER THE ORDER PASSED BY THE AO U/S 154 WAS WITHIN HIS JURISDICTION AND WHET HER THE MATTER INVOLVED THEREIN IS COVERED BY THE EXPRESSION MISTAKE APPAR ENT FROM RECORD AS CONTEMPLATED U/S 154 OF THE ACT. LD. CIT(A) SHALL PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS TO THE AO BEFORE DECIDING THE ISSUES. WE ORDER ACCORDINGLY. 12. IN THE RESULT BOTH THE APPEALS FILED BY THE RE VENUE AND BY THE ASSESSEE ARE TREATED TO BE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 3624/D/2011 & 3529/D/2011 6 THIS DECISION WAS PRONOUNCED ON 22 ND SEPTEMBER 2011 IMMEDIATELY AFTER THE HEARING WAS OVER. SD/- SD/- ( A.N. PAHUJA ) ( C.L. SETHI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 22 ND SEPTEMBER 2011 GS COPY FORWARDED TO: 1. LEA ASSOCIATES SOUTH ASIA PVT. LTD. NEW DELHI. 2. ACIT CIRCLE 4(1) NEW DELHI. 3. DCIT CIRCLE 4(1) NEW DELHI. 4. CIT(A) 5. CIT 6. DR BY ORDER DY. REGISTRAR