Pace Express Travels & Cargo (P) Ltd., ... vs Department Of Income Tax

I.T.A.No.6157/DEL/2013 (A.Y. 2005-06) DCIT, Circle 14(1) Vs. Pace Express Travels & Cargo P Ltd. New Delhi Khasra no.1027/1, 1st floor, Plot no.29 Road no.6, Mahipal Pur Ex. NH 8 New Delhi 110 037

PAN: AACCP 7113 Q

(APPELLANT) (RESPONDENT)

Assessee by : None. Department by : Sh. Vikram Sahay, Sr. DR

ORDER

PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER

This is an appeal filed by the Revenue directed against the order of the Ld.CIT(A)-XVII, New Delhi dated 12.8.2013 pertaining to the Assessment Year (AY) 2005-06, on the following grounds.

"1. On facts and circumstances of the case, the Ld.CIT(A)has erred in quashing the rectification order u/s 154 of the Act and holding that there was no mistake apparent from record.

2. On facts and circumstances of the case, the Ld.CIT(A)has erred in not appreciating the fact that mistake of Rs.97,70,312/- in income declared was evident obvious from record.

3. On facts and circumstances of the case, the Ld.CIT(A)has erred in taking into cognizance the details filed by the assessee regarding the working of gross turnover without adhering the provisions of Rule 46A in respect of additional evidence during appellate proceedings.

ITA No.6157/Del/2013 AY: 2005-06 Pace Express Travels & Cargo P.Ltd., N.Del

4. The appellant craves to be allowed to add any fresh grounds of appeal and/or delete or amend any other grounds of appeal."

2. None appeared on behalf of the assessee despite issual of notice. Under the

circumstances we dispose of the case ex parte on merits qua the assessee after

hearing the Ld.Sr.D.R.

3. Heard Shri Vikram Sahay, Ld.Sr.D.R. on behalf of the Revenue. The First

Appellate Authority in this case has quashed the order of the AO passed u/s 154

of the Income Tax Act, 1961 (the Act) amending his order passed u/s 143(3) on

28.12.2007.

4. The assessee is in the business of forwarding cargo on behalf of various

agents and receives commission on quantum of total turnover. In turn the

assessee pays incentives and commission to various Agents. The assessee had been

consistently following a system of accounting, whereby after deducting expenses

from gross receipts, the net receipts are shown in the Profit and Loss account,

whereas the TDS is on the gross receipts.

5. The Assessment Officer (A.O.) completed assessment u/s 143(3) of the

Act on 28.12.2007. Later in an order passed u/s 154, he held that the turnover

credited by the assessee to the Profit and Loss a/c was Rs.3,42,12,514/- and

whereas the TDS benefit claimed was Rs.17,24,171/-. He worked out the receipts

as per the TDS Certificates at Rs.4,39,82,826/- and added an amount of

Rs.97,70,312/- to the income of the assessee u/s 154 of the Act.

2 ITA No.6157/Del/2013

AY: 2005-06 Pace Express Travels & Cargo P.Ltd., N.Del

6. The First Appellate Authority deleted this addition on the ground that it

does not fall within the ken of S.154 of the Act, particularly when in the system

of accounting followed by the assessee, it disclosed only net receipts in the Profit

and Loss a/c. Thus the computation made u/s 154 by the AO is erroneous. In

any event, the order on hand cannot be considered as a correction of a mistake

apparent on record. The additions made are highly debatable issues. The

difference in question cannot be treated as income, unless the facts and figures are

verified with reference to the books of accounts etc. The First Appellate

Authority has rightly relied on the decision of judgement in the case of CIT vs.

Hero Cycles (SC) 94 Taxman 271 and held that the order passed by the A.O. u/s

154 is not sustainable. We do not find any infirmity in the order of the First

Appellate Authority. Hence we uphold the same and dismiss this appeal by the

Revenue.

7. In the result Revenue's appeal is dismissed.

Order pronounced in the Open Court on 11th June, 2015.

Sd/- Sd/-

[A.T. VARKEY] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER

Dt. the 11th June, 2015

· Manga

3 ITA No.6157/Del/2013 AY: 2005-06 Pace Express Travels & Cargo P.Ltd., N.Del

Copy forwarded to: - 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order,

Assistant Registrar, ITAT, Delhi Benches

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