SSIPL Luxury Fashion Pvt. Ltd., Delhi v. ITO, New Delhi

ITA 5368/DEL/2012 | 2009-2010
Pronouncement Date: 29-09-2016 | Result: Allowed

Appeal Details

RSA Number 536820114 RSA 2012
Assessee PAN AAJCS1272J
Bench Delhi
Appeal Number ITA 5368/DEL/2012
Duration Of Justice 3 year(s) 11 month(s) 10 day(s)
Appellant SSIPL Luxury Fashion Pvt. Ltd., Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 29-09-2016
Date Of Final Hearing 27-09-2016
Next Hearing Date 27-09-2016
Assessment Year 2009-2010
Appeal Filed On 19-10-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI H.S. SIDHU JUDICIAL MEMBER AND SHRI O.P. KANT ACCOUNTANT MEMBER ITA NO. 5368/DEL/2012 ASSESSMENT YEAR: 2009-10 M/S SSIPL LUXURY FASHION PVT. LTD. VS. ITO WARD-9 (2) (SUMEDHA LUXURY FASHION PVT. LTD.) NEW DELHI E-51 MANSAROVER PARK SHAHDARA DELHI 110 032 (PAN: AAJCS1272J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. V.K. AGGARWAL A.R. REVENUE BY : SHRI N.K. BANSAL SR. DR DATE OF HEARING : 27-09-2016 DATE OF ORDER : 29-09-2016 ORDER PER H.S. SIDHU JM THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 9.7.2012 OF THE LD. CIT(A)-XII NEW DELHI PERTAINING TO ASSESSMENT YEAR 2009-10 AND RAISED THE FOLLOWING GROUNDS:- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW:- 1. THE ASSESSMENT ORDER IS ILLEGAL AND VOID. ITA NO.5368/DEL/2012 2 2. THE LD. CIT ERRED IN SUSTAINING THE ADDITION OF RS. 6 CRORES PAYABLE BY NELIA RETAIL PVT. LTD. TO SPORTS STATION PVT. LTD. HOLDING COMPANY AS INCOME OF THE ASSESSEE COMPANY. 3. THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 42 75 600/- BEING THE COMPENSATION RECEIVED ON ACCOUNT OF STO RE DEPOSIT UNDER THE TRANSFER AGREEMENT AS BUSINESS INCOME. THE APPELLANT CRAVES LEAVE TO AMEND OR WITHDRAW ANY OF THE GROUNDS OR FILE ADDITIONAL GROUNDS DURING THE COURS E OF HEARING. 2. ASSESSEE HAS ALSO FILED AN APPLICATION FOR ADMIS SION OF ADDITIONAL GROUND OF APPEAL VIDE ITS APPLICATION DATED 05.8.2015 IN W HICH THE ASSESSEE HAS STATED THAT IN VIEW OF THE SETTLED DECISIONS IN THE CASE O F NTPC 229 ITR 383 (SC) (LEGAL GROUND CAN BE RAISED FOR FIRST TIME IN COLLA TERAL AND SECOND ROUND ALSO). THE LEGAL GROUND CAN BE VERY WELL RAISED FOR FIRST BEFORE THE ITAT WHICH GOES TO THE ROOT OF THE MATTER. FOR THE SAKE OF CONVENIENCE THE LEGAL ADDITIONAL GROUND RAISED BY THE ASSESEEE IS REPRODUCED AS UNDER:- 1. THE ADDITION OF RS. 6 CRORE BY THE AO AND CONFI RMED BY THE LD. CIT(A) IS ARBITRARY UNJUSTIFIED AND EX-FACIE ILLEG AL AND DESERVE TO BE DELETED AS THE IMPUGNED RECEIPT HAS ALREADY BEEN TA XED U/S. 143(3) ON 20.12.2010 IN AY 2008-09 IN THE HANDS OF M/S SPORTS STATION INDIA PVT. LTD. I.E. THE HOLDING COMPANY OF THE APPELLANT. 3. LD. COUNSEL OF THE ASSESSEE REQUESTED THAT KEEPI NG IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN T HE CASE OF NTPC 229 ITR ITA NO.5368/DEL/2012 3 383 (SC) (SUPRA) THE ADDITIONAL GROUND RAISED BY THE ASSESSEE MAY BE ADMITTED AND DECIDED FIRST. 4. ON THE CONTRARY LD. DR STRONGLY OPPOSED THE ADM ISSION OF ADDITIONAL GROUND (LEGAL) RAISED BY THE ASSESSEE. 5. AFTER HEARING BOTH THE PARTIES AS WELL AS PERUSI NG THE ADDITIONAL GROUND ALONGWITH THE ORDERS PASSED BY THE REVENUE AUTHORIT IES WE ARE OF THE CONSIDERED VIEW THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF NTPC LIMITED 229 ITR 383 (SUPR A) THE ADDITIONAL GROUND RAISED BY THE ASSESSEE VIDE ITS APPLICATION DATED 5 .8.2015 IS PURELY LEGAL GROUND AND DID NOT REQUIRE FRESH FACTS WHICH IS TO BE IN VESTIGATED AND GOES TO THE ROOT OF THE MATTER. IN THE INTEREST OF JUSTICE WE ADM IT THE AFORESAID ADDITIONAL GROUND RAISED BY THE ASSESSEE IN VIEW OF THE CASE LAW OF NTPC LIMITED (SUPRA) AND PROCEED TO DECIDE THE ADDITIONAL GROUND FIRST. 6. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CAS E THE ASSESSEE FILED ELECTRONIC RETURN DECLARING NIL INCOME ON 30.9.201 1. THE RETURN WAS PROCESSED U/S. 143(1) OF THE I.T. ACT 1961 AND SUBSEQUENTLY SELECTED FOR SCRUTINY. IN RESPONSE TO THE STATUTORY NOTICES ASSESSEES AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED DETAILS AND DOCUMENTS CALLED FOR FROM TIME TO TIME. THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE BUSINES S OF RETAIL ACTIVITY WITH RESPECT TO BRANDED FOOTWEAR/ APPARELS AND ACCESSORI ES AND LEATHER GOODS. NECESSARY DETAILS AND INFORMATION AS CALLED FOR HAV E BEEN FILED BY THE ASSESSEE. AFTER PERUSING THE SAME THE AO ADDED THE VARIOUS AD DITIONS AND ASSESSED THE ITA NO.5368/DEL/2012 4 INCOME OF THE ASSESSEE AT RS. 6 52 93 559/- BY COMP LETING THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT 1961 VIDE HIS ORDER DATED 2 8.12.2011. 7. AGAINST THE ORDER OF THE AO ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER DATED 09.7.2012 HAS DISMISS ED THE APPEAL OF THE ASSESSEE. 8. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD . CIT(A) ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL FOR CHALLENGING THE ISS UE RAISED VIDE ADDITIONAL AS WELL AS THE ADDITION IN DISPUTE. 9. AT THE TIME OF HEARING WITH REGARD TO GROUND N O. 2 AND ADDITIONAL GROUND AS AFORESAID ARE CONCERNED LD. COUNSEL O F THE ASSESSEE HAS STATED THAT THE ADDITION OF RS. 6 CRORE MADE BY THE AO AND CONF IRMED BY THE LD. CIT(A) IS ARBITRARY UNJUSTIFIED AND EX-FACIE ILLEGAL AND DES ERVES TO BE DELETED AS THE IMPUGNED RECEIPT HAS ALREADY BEEN TAXED U/S. 143(3) ON 20.12.2010 IN AY 2008- 09 IN THE HANDS OF M/S SPORTS STATION INDIA PVT. LT D. I.E. THE HOLDING COMPANY OF THE ASSESSEE. THEREFORE HE STATED THAT ADDITION OF RS. 6 CRORE MAY BE DELETED. TO SUPPORT HIS AFORESAID CONTENTION HE RELIED UPO N THE FOLLOWING CASE LAWS AND ATTACHED THE COPIES OF THE SAID DECISIONS WITH THE PAPER BOOK. - LAXMIPAT SINGHANIA VS. CIT (1969) 72 ITR 0291 ( SC) - CIT VS. R. DALMIA (1982) 135 ITR 0346 (DEL.) - JYOTINDRA NATWARLAL NAK VS. ITO (2013) 21 ITR (TR IB.) 0252 (MUM). - DCIT VS. STANDARD FIREWORKS (P) LTD. (2010) 128 T TJ 0001 (CHENNAI) (TM) - SURESH K. JAJOO VS. ACIT (2010) 39 SOT 514 (MUM.) 10. ON THE CONTRARY LD. DR RELIED UPON THE ORDERS PASSED BY THE AUTHORITIES BELOW. HE STATED THAT AO MUST TAX THE RIGHT PERSON. MERELY BECAUSE A WRONG PERSON IS TAXED WITH RESPECT TO A PARTICULAR INCOME THE AO IS NOT PRECLUDED FROM ITA NO.5368/DEL/2012 5 TAXING THE RIGHT PERSON WITH RESPECT TO THAT INCOME . HE FURTHER STATED THAT FURTHER THE PERSON LAWFULLY LIABLE TO BE TAXED CA N CLAIM NO IMMUNITY BECAUSE THE AO HAS TAXED THE SAID INCOME IN THE HANDS OF AN OTHER PERSON CONTRARY TO LAW. HE FURTHER STATED THAT THE WRONG TAX PAYER HAS THE REMEDY OF REVISION U/S. 264 OF THE I.T. ACT. IF THE ASSESSMENT OF THE WRONG TAX PA YER HAS BEEN MADE U/S. 143(3) OR 144 THEN THE WRONG TAX PAYER CAN APPLY TO THE C IT OR PR. CIT TO REVISE THE ASSESSMENT AS PER LAW. 11. WE HAVE HEARD THE LD. DR AS WELL AS LD. COUNSE L OF THE ASSESSEE. THE ARGUMENTS ADVANCED BY THE LD. DR ARE CONTRARY TO TH E FACTS OF THE PRESENT CASE BECAUSE WE CANNOT GO BEYOND THE ISSUE IN DISPUTE A ND THEREFORE WE ARE DECIDING THE ISSUE IN DISPUTE AFTER HEARING BOTH THE PARTI ES AND ACCORDING TO THE ORDERS PASSED BY THE REVENUE AUTHORITIES AS WELL AS THE PR OVISIONS OF LAW. AS FAR AS ADDITIONAL GROUND AND GROUND NO. 2 AS AFORESAID A RE CONCERNED WE NOTE THAT THESE GROUNDS ARE RELATING TO ADDITION OF RS. 6 CR ORE MADE IN THE HANDS OF THE ASSESSEE WHICH HAS ALREADY BEEN TAXED IN THE HANDS OF ITS HOLDING COMPANY RENDERING THE IMPUGNED ADDITION AS EX-FACIE ILLEGAL ARBITRARY AND UNJUSTIFIED. THE HOLDING COMPANY I.E. M/S SPORTS STATION INDIA P VT. LTD. FILED ITS RETURN OF INCOME FOR A.Y. 2008-09 ON 30/09/2008 BEFORE THE AD DL. CIT RANGE -9 NEW DELHI. THIS COMPANY DECLARED THE AMOUNT OF RS. 6 CR ORE AS AN EXTRAORDINARY ITEM IN ITS P & L ACCOUNT. THIS AMOUNT OF RS. 6 CRORE WA S TAXED ACCORDINGLY BY THE THEN AO VIDE ASSESSMENT ORDER DATED 20/12/2010 U/S 143(3) OF THE I.T. ACT. (PLACED AT PAGE 275 OF THE PAPER BOOK). THIS ASSES SMENT ORDER OF THE HOLDING COMPANY HAS ATTAINED FINALITY. THE AO [ITO WARD-9 (2)] OF THE ASSESSEE HAS AGAIN TAXED THIS AMOUNT OF RS. 6 CRORE IN THE HANDS OF THE ASSESSEE I.E. THE SUBSIDIARY IN THE A. Y. 2009-10 VIDE ASSESSMENT O RDER DATED 28/12/2011 U/S ITA NO.5368/DEL/2012 6 143(3) I.E. AFTER MORE THAN A YEAR. THE CARDINAL PRINCIPLE OF TAXATION IS THAT AN INCOME CANNOT BE TAXED TWICE UNLESS IT IS SO PROVID ED IN THE IT ACT. THEREFORE IN OUR CONSIDERED OPINION THE ADDITION MADE BY THE AO IS TOTALLY ILLEGAL AND ACCORDINGLY THE ASSESSMENT ORDER IS ILLEGAL TO THIS EXTENT. THEREFORE THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 6 CRORE IN THE HANDS OF THE ASSESSEE. WE FIND THAT IN THE CASE OF LAXMIPAT SI NGHANIA VS. CIT (1969) 72 ITR 0291 (SC) IT HAS BEEN HELD AS UNDER:- 8. IT IS A FUNDAMENTAL RULE OF THE LAW OF TAXATI ON THAT UNLESS OTHERWISE EXPRESSLY PROVIDED INCOME CANNOT BE TAXE D TWICE ...... 11.1 IN THE CASE OF CIT VS. R. DALMIA (1982) 135 I TR 0346 (DEL) IT HAS BEEN HELD THAT 'DIVIDEND-CHARGEABILITY-DIVIDEND RETURNED BY ASSESSEE IN ASST. YR. 1959-60 ASSESSMENT MADE AND ATTAINED FINALITY SAM E CANNOT BE TAXED AGAIN IN ASST. YR. 1960-61' 11.2 IN THE CASE OF JYOTINDRA NATWARLAL NAIK VS ITO (2013) 21 ITR(TRIB.) 0252 (MUM) 'CONCLUSION: WHERE INCOME I.E. CAPITAL GAINS FROM SALE OF ANCES TRAL PROPERTY AND INTEREST ON MUTUAL FUNDS HAS BEEN SHOWN BY HUF AND HAS BEEN ACCEPTED BY THE DEPARTMENT SAME CANNOT BE ASSESSED IN THE INDIVIDUAL CAPACITY' 11.3 IN THE CASE OF DCIT VS. STANDARD FIREWORKS (P) LTD. (2010) 128 TTJ 0001 (CHENNAI) TM 1.HOWEVER AT THE SAME TIME ONE OF THE CARDINAL PRINCIPLES OF TAXATION IS THAT SAME INCOME CANNOT BE TAXED TWI CE.. ITA NO.5368/DEL/2012 7 11.4 IN THE CASE OF SURESH K JAJOO VS. ACIT (2010) 39 SOT 514 (MUM) 31.THE HONBLE COURT UPHELD THE ORDER OF THE TRIB UNAL AND HELD THAT THE SUM OF RS. 3 12 500/- ALREADY ASSESSE D FOR THE ASSTT. YEAR 1959-60 COULD NOT AGAIN BE ASSESSED FOR THE A SSTT. YEAR 1960-61 SINCE THE ORDERS OF THE IT AUTHORITIES FOR THE EARLIER YEAR HAD BECOME FINAL 11.5 IN THE BACKGROUND OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE IN THE CASE OF THE ASSESSEE WE NO TE THAT THE INCOME OF RS. 6 CRORE HAS ALREADY BEEN TAXED IN THE HANDS OF THE HO LDING COMPANY DURING LAST YEAR. THEREFORE THE SAME COULD NOT BE TAXED AGAIN IN THE HANDS OF THE SUBSIDIARY COMPANY DURING THIS YEAR. ACCORDINGLY WE ARE OF THE CONSIDERED VIEW THAT THE ABOVE ISSUE IS EXACTLY THE SIMILAR AND IDENTICAL TO THE ISSUE INVOLVED IN THE PRESENT APPEAL AND IS SQUARELY COVE RED BY THE DECISIONS AS DISCUSSED ABOVE. HENCE RESPECTFULLY FOLLOWING TH E ABOVE PRECEDENTS WE DELETE THE ADDITION OF RS. 6 CRORES (RUPEES SIX CRO RES) AND DECIDE THE ADDITIONAL GROUND AND GROUND NO. 2 RAISED IN THE AS SESSEES APPEAL IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. 12. WITH REGARD TO GROUND NO. 3 RELATING TO SUSTAI NING THE ADDITION OF RS. 42 75 600/- BEING THE COMPENSATION RECEIVED ON ACC OUNT OF STORE DEPOSIT UNDER THE TRANSFER AGREEMENT AS BUSINESS INCOME IS CONCERNED WE FIND THAT THIS ADDITION IS OF RS.42 75 600/- ON ACCOUNT OF ADVANCE GIVEN FOR HIRING THE PREMISES FOR OPENING A NEW STORE IN THE SHOPPING MALL NAMED EMPORIO DLF PLACE VASANT KUNJ NEW DELHI. THE AMOUNT OF RS. 42 75 600/ - WAS PAID BY THE HOLDING COMPANY DIRECTLY TO THE LANDLORD I.E. M/S REGENCY PARK PROPERTY MANAGEMENT ITA NO.5368/DEL/2012 8 SERVICES PVT. LTD ON BEHALF OF THE ASSESSEE. SINCE THE PAYMENT WAS MADE DIRECTLY BY THE HOLDING COMPANY AND NOT THROUGH THE ASSESSEE THE ENTRY DID NOT FIND PLACE IN THE ACCOUNTS OF THE ASSESSEE. IN THE BOOKS OF THE ACCOUNT OF THE HOLDING COMPANY IT IS REFLECTED AS SECURITY DEPOSIT. SUBSE QUENTLY IT WAS TRANSFERRED FROM THE SECURITY DEPOSIT TO THE ASSESSEE'S ACCOUNT IN THE NEXT YEAR. THEREFORE IN OUR CONSIDERED OPINION THE AMOUNT OF RS. 42 75 600/- BEING ADVANCE GIVEN BY THE HOLDING COMPANY DIRECTLY TO THE LANDLORD ON BEHALF OF THE ASSESSEE WAS TRANSFERRED TO THE ASSESSEE'S ACCOUNT SUBSEQUENTLY. WE ALSO NOTE THAT NO PROFIT ELEMENT IS INVOLVED IN THIS TRANSACTION WHICH IS IN FACT AN ADVANCE GIVEN TO THE ASSESSEE THROUGH THE SECURITY DEPOSIT ROUTE AND DES ERVE TO BE DELETED. ACCORDINGLY WE DELETE THE ADDITION OF RS. 42 75 60 0/- AND ALLOW THE GROUND NO. 3 IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENU E. 13. IN THE RESULT THE ASSESSEES APPEAL STANDS A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29-09-2016. SD/- SD/- (O.P. KANT) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29-09-2016 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A) NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.