Environ Energy Tech Service Ltd, New Delhi v. DCIT, New Delhi

ITA 3892/DEL/2009 | 2005-2006
Pronouncement Date: 22-01-2010 | Result: Allowed

Appeal Details

RSA Number 389220114 RSA 2009
Bench Delhi
Appeal Number ITA 3892/DEL/2009
Duration Of Justice 4 month(s) 6 day(s)
Appellant Environ Energy Tech Service Ltd, New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 22-01-2010
Date Of Final Hearing 20-01-2010
Next Hearing Date 20-01-2010
Assessment Year 2005-2006
Appeal Filed On 15-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B NEW DELHI BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND SHRI RAJPAL YADAV JUDICIAL MEMEBR I.T.A NO. 3912/DEL/09 ASSESSMENT YEAR 2005-06 ACIT CIRCLE-11 (1) C.R. BUILDING NEW DELHI. VS. ENVIRON ENERGY TECH SERVICES LTD. C-22 GREEN PARK EXTENSION NEW DELHI 110 016 (APPELLANT) (RESPONDENT) AND I.T.A. NO. 3892/DEL/09 ASSESSMENT YEAR 2005-06 ENVIRON ENERGY TECH SERVICES LTD. VS. DCIT CIRCLE -11(1) C-22 GREEN PARK EXTENSION NEW DELHI. NEW DELHI 110 016. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. SHEILA CHOPRA SR. DR RESPONDENT BY : SHRI S.K. BAJAJ CA ORDER PER RAJPAL YADAV JM: THE ASSESSEE AND REVENUE ARE IN CROSS APPEALS AGAIN ST THE ORDER OF LD. CIT(A) DATED 3 RD JULY 2009 PASSED FOR ASSTT. YEAR 2005-06. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING SOLAR ENERGY LIGHTING SYSTEM. IT HAS FILED ITS RETURN OF INCOME ON 20.10.2005 DECLARING NIL INCOME ITA NO. 3912/DEL/09 & I TA NO. 3892/DEL/09 AS STT. YEAR 2005-06 2 FROM BUSINESS SHORT TERM CAPITAL GAIN OF RS. 27 67 513/- AND PAID TAX U/S 115 JB ON INCOME OF RS. 37 41 460/-. THE AO ISSUED NOTICE U/S 143 (2) OF THE ACT AND SCRUTINIZE THE RETURN OF ASSESSEE. DURING THE COUR SE OF ASSTT. PROCEEDINGS HE FOUND ASSESSEE HAS CLAIMED DEDUCTION OF RS. 20 27 700/- O N ACCOUNT OF DISCOUNT PROVIDED BY IT TO THE CUSTOMER. HE DISALLOWED THE CLAIM OF A SSESSEE. 3. ON APPEAL LD. CIT(A) UPHELD THE DISALLOWANCE UPT O TO 50% OF THE TOTAL AMOUNT CLAIMED BY ASSESSEE. 4. THE ASSESSEE IN ITS APPEAL IS IMPUGNING RETENTIO N OF DISALLOWANCE AT 50% OF RS. 20 27 700/- WHEREAS REVENUE IS IMPUGNING THE DE LETION OF DISALLOWANCE AT 50% OF RS. 20 27 700/-. 5. THE LD. COUNSEL FOR THE ASSESSEE WHILE IMPUGNING THE ORDER OF LD. CIT (A) CONTENDED THAT AO DID NOT POINT OUT ANY DEFECT IN T HE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. THE ASSESSEE HAS GIVEN DISCOUNT OF RS. 1200/- TO A CUSTOMER ON SALE OF ONE UNIT. THE DISCOUNT WAS PROVIDED TO BOOS T THE SALES. IF A CUSTOMER BUYS MORE THAN ONE UNIT THEN DISCOUNT WILL BE MULTIPLIED WITH THE MULTIPLICATION OF THE UNITS. NAMELY ON ONE UNIT RS. 1200/- ON TWO UNIT RS. 2400/ - AND SO ON. THE AO HAS MADE A REFERENCE WITH REGARD TO THE TWO LISTS OF THE CUS TOMERS TO WHOM DISCOUNT WAS PROVIDED. HE OBSERVED THAT ASSESSEE HAS GIVEN A DIS COUNT OF RS. 1200/- ON A UNIT PRICE OF RS. 11 800/- AND ALSO ON A UNIT PRICE OF R S. 1 02 095/-. ACCORDING TO THE AO THERE IS MISMATCH IN THE QUANTITY OF THE DISCOUNT AS WELL AS THE LIST OF CUSTOMERS PROVIDED BY THE ASSESSEE. HE POINTED OUT THAT AO HA S MISERABLY FAILED TO APPRECIATE THE DETAILS MAINTAINED BY THE ASSESSEE. THERE ARE 3 500 ENTRIES IN WHICH DISCOUNT HAS BEEN GIVEN BY ASSESSEE. THE MISMATCH IS ONLY IN RESPECT OF THREE ENTRIES. IN THE FIRST LIST NAME OF SHRI ASHOK KR. SINGH IS AVAILABL E WHEREIN IN THE SECOND LIST IT IS SHRI ITA NO. 3912/DEL/09 & I TA NO. 3892/DEL/09 AS STT. YEAR 2005-06 3 PRABODH MAITY. THERE IS NO DISPUTE ABOUT THE QUANTU M OF DISCOUNT IN THE FIRST AND SECOND LIST. AT THE TIME OF ARGUMENT HE EMPHASIZED THAT DISCOUNT WAS GIVEN ON THE UNIT AND NOT ON THE VALUE OF THE PRODUCT. THE LD. C IT(A) HAS NOT GIVEN ANY REASON WHY HE IS RESTRICTING THE DISALLOWANCE TO 50%. THE LD. COUNSEL HAS ALSO POINTED OUT THAT AO CALLED FOR THE DETAILS ON 18.12.2007 AND BE FORE ANALYZING THE DETAILS SUBMITTED BY ASSESSEE HE PASSED THE ASSTT. ORDER ON 24.12.2007. HE DID NOT CONFRONT THE ASSESSEE ABOUT THE ALLEGED DISCREPANCY MENTIONED IN THE ASSTT. ORDER. ON THE OTHER HAND LD. DR RELIED UPON THE ORDER OF THE AO. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS PLACED ON RECORD THE LI ST OF PERSONS TO WHOM DISCOUNT ON SALE OF ITS PRODUCT HAS BEEN GIVEN. THE TRADE DI SCOUNT APPEARING IN THIS LIST IS ON A UNIFORM BASIS. FOR EXAMPLE AT S. NO. 48 DISCOUNT OF RS. 1200/- WAS GIVEN TO ONE SHRI DHIRENDRA NATH BAG WHO HAS PURCHASED A PRODUCT OF RS. 13 310/-. SIMILARLY S.NO. 61 SHRI DIGBIJAY JANA HAS PURCHASED A PRODUCT OF RS . 23 380/- BUT DISCOUNT OF RS. 1200 ONLY WAS GRANTED. IN THIS LIST ASSESSEE HAS DE MONSTRATED THAT DISCOUNT WAS GIVEN ON THE BASIS OF UNIT SOLD AND NOT ON THE BASI S OF TOTAL SALE CONSIDERATION. THE ASSESSEE IS IN THE BUSINESS IT IS FOR IT TO DECIDE HOW TO BOOST THE BUSINESS. THERE IS NOTHING WRONG TO GIVEN DISCOUNT TO THE CUSTOMER. T HE AO HAS NOT POINTED OUT ANY CIRCUMSTANCE WHICH INDICATE THAT SUCH CLAIM IS BOGU S OR MANIPULATED ONE. THE AO CANNOT DICTATE THE ASSESSEE HOW TO GRANT THE DISCOU NT OR TO DO THE BUSINESS. THERE IS NO MATERIAL WITH THE AO WHICH CAN INDICATE THAT ASS ESSEE HAS REDUCED THE SALE BY DEBITING DISCOUNT. MORE SO THE LD. CIT (A) IS UNABL E TO POINT OUT ANY JUSTIFICATION FOR CONFIRMING THE DISALLOWANCE AT 50% OF THE TRADE DIS COUNT CLAIMED BY ASSESSEE. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANC ES WE ALLOW THE APPEAL OF ITA NO. 3912/DEL/09 & I TA NO. 3892/DEL/09 AS STT. YEAR 2005-06 4 ASSESSEE AND DELETE THE DISALLOWANCE OF RS. 20 27 7 00/- MADE BY THE AO. CONSEQUENTLY THE APPEAL OF THE REVENUE IS DISMISSED . 7. ORDER PRONOUNCED IN THE OPEN COURT ON 22.1.10. [G.E. VEERABHADRAPPA] [RAJPAL YADAV] VICE PRESIDENT JUDICIAL ME MBER VEENA DATED: COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT