IN THE INCOME TAX APPELLATE TRIBUNAL
`B' : NEW DELHI
DELHI BENCH `B
GUPTA, VICE PRESIDENT AND
BEFORE SHRI G.C. GUPTA,
KAPOOR, ACCOUNTANT MEMBER
SHRI T.S. KAPOOR,
No.5258/Del/2012
ITA No.
2009-10
Assessment Year : 2009-
Income Tax Officer, Vs. M/s Diamond Pocket Books
Ward-
Ward-10(3), Pvt.Ltd.,
New Delhi. X-30, Okhla Industrial Area,
Phase-
Phase-II,
New Delhi 110 020.
PAN : AAACD2474L.
(Appellant) (Respondent)
Appellant by : Smt. Parwinder Kaur, Sr.DR.
Respondent by : Shri Sanjay Nath, CA.
Date of hearing : 18.02.2015
Date of pronouncement : 04.03.2015
ORDER
GUPTA, VP :
PER G.C. GUPTA,
This appeal by the Revenue for the AY 2009-10 is directed
against the order of learned CIT(A)-XIII, New Delhi dated 21st August,
2012.
2. Ground No.1 of the Revenue's appeal is as under:-
"On the facts and in the circumstances of the case and
law, the ld.CIT(A) has erred in deleting the addition of
Rs.48,57,508/- made u/s 40(a)(ia) of the Act on account
of non deduction of TDS on payments made against
printing and processing work."
3. Learned DR submitted that the CIT(A) has not called for any
remand report in this case and therefore, the order of the CIT(A) is not
2 ITA-5258/Del/2012
sustainable. She submitted that information was gathered that M/s
Print-O-Pack Ltd. has raised bills and copy thereof shows that they
were raised for printing and processing work undertaken by the said
party. The assessee has failed to make any TDS out of the amount
paid to the said party and therefore, the provisions of Section 40(a)(ia)
of the Income-tax Act, 1961 were rightly applicable to the facts of the
case of the assessee. She submitted that the work done by the said
party was in the nature of job work and not in the nature of purchases.
She referred to paragraph 3 of the assessment order in support of the
case of the Revenue. She relied on the order of the Assessing Officer.
4. Learned counsel for the assessee submitted that it was a clear
case of transaction of purchase of books and not job work and
therefore, the provisions of Section 40(a)(ia) do not apply to the facts
of the case of the assessee. He submitted that no remand report was
necessary in this case as suggested by the learned DR. He relied on
the order of the CIT(A).
5. We have considered the rival submissions and have perused the
order of the Assessing Officer and the CIT(A). We find that in the facts
of the case, no remand report was necessary to adjudicate the issue
before the CIT(A). We find that the assessee has filed copies of bills
pertaining to M/s Print-O-Pack Ltd. The same were on account of
purchases of magazines and promotional forms. The CIT(A) has
recorded that these bills show that the assessee has purchased
magazines and promotional forms and the cost of magazine etc.
includes cost of paper, printing and binding. He has further recorded
that the assessee has also filed confirmation from M/s Print-O-Pack Ltd.
vide letter dated 28th November, 2011 wherein it is mentioned that the
bills were raised for magazines and brochures which include the cost of
paper, printing and binding. The CIT(A) has given a finding that the
3 ITA-5258/Del/2012
confirmation from M/s Print-O-Pack Ltd. proves that the payments were
made not for the job work or printing charges and in the case of the
assessee, it was purchase of magazines and promotional forms and
therefore, there was no question of deducting TDS. There being no
mistake in the order of the learned CIT(A) on this issue, the same is
confirmed and ground No.1 of the Revenue's appeal is dismissed.
6. Ground No.2 of the Revenue's appeal is as under:-
"On the facts and in the circumstances of the case and
law, the ld.CIT(A) has erred in deleting the addition of
Rs.7,34,316/- made u/s 40(a)(ia) of the Act on account
of non deduction of TDS on payments made against
packing and forwarding charges while accepting
additional evidences."
7. Learned DR submitted that the CIT(A) has accepted the
additional evidence in contravention of the relevant rules. She
submitted that the assessee has not furnished any copy of bill from the
parties to substantiate its claim of deduction and also no address or
permanent account number was given of these parties so as to enable
the Assessing Officer to make independent enquiries. She submitted
that the onus was on the assessee to prove which the assessee has
failed to discharge. She submitted that the expenditure being packing
and forwarding charges falls under the category of job work and
contract and therefore, the provisions of Section 194C were applicable
to the case of the assessee.
8. Learned counsel for the assessee has opposed the submissions
of the learned DR. He submitted that the Assessing Officer never
required to produce the bills before him and therefore, the same could
not be produced before the Assessing Officer. However, it was a clear
transaction of purchases and therefore, the provision of Section
4 ITA-5258/Del/2012
40(a)(ia) of the Act is not applicable to the case of the assessee. He
referred to the relevant portion of the appellate order passed by the
CIT(A) in support of the case of the assessee.
9. We have considered the rival submissions and perused the order
of the Assessing Officer and the CIT(A). We find that it is not a fit case
to restore the matter again before the Assessing Officer. The assessee
has filed copies of bills and confirmations of parties before the CIT(A).
The CIT(A) has given a finding that on going through these bills, it was
seen that the assessee has purchased poly shrink and polythene bags
from M/s Allied Plast, board from Chandra Shekhar (Puraney Dabbey
Waley) and Bale Hessien Cloth from Ghanshyam Jute Trading Co. He
has recorded a finding that these items are purchases of packing and
forwarding material and not the payment for packing and forwarding
as observed by the Assessing Officer and therefore, are not covered
under the provisions of Section 194C of the Act. In these facts of the
case, we are of the view that since the payments were made for
purchase of packing and forwarding material, the provision of Section
194C was inapplicable and therefore, no disallowance under Section
40(a)(ia) of the Act could be made. Accordingly, the order of CIT(A) on
this issue is confirmed and ground No.2 of the Revenue's appeal is
dismissed.
10. Ground No.3 of the Revenue's appeal is as under:-
"On the facts and in the circumstances of the case and
law, the ld.CIT(A) has erred in deleting the addition of
Rs.11,55,465/- made on account of unverified bad debts
while accepting additional evidences and not calling for
a report from the AO thereon."
5 ITA-5258/Del/2012
11. Learned DR submitted that the onus was on the assessee to
prove the unverified bad debt amounts and the additional evidence
was accepted by the CIT(A).
12. Learned counsel for the assessee submitted that there was no
correspondence with the debtor parties and no record of address of
debtor parties was available with the assessee. However, as per the
details of the bad debts, the amounts due from various parties were
very small and therefore, it was not advisable to initiate legal
proceedings against the said parties. He relied on the order of the
CIT(A).
13. We have considered the rival submissions and perused the order
of the Assessing Officer and the CIT(A) and also the details of the bad
debts claimed by the assessee as filed in the compilation before us.
We find that the assessee could not file even the postal address of the
debtor parties. A perusal of the details written off as filed in the
compilation before us shows that it consists of various debtor parties
whose amount due was ranging from `513/- to `5,80,601/-. Allowing
the small amounts due from various parties and written off by the
assessee, the balance amounts exceeding `20,000/- are addable due
to no evidence whatsoever produced by the assessee to show that
these were genuine items of bad debts written off by the assessee, the
details whereof are as under:-
Sl.No. Name of Party Amount
1. Vijayalaxmi Publishers (Chennai) 24,358.00
2. The Corner Book Store (Delhi) 47,838.00
3. Security Deposits 27,749.00
4. Popular Book Distributors (Trivendrum) 71,694.00
5. Pen Books Pvt.Ltd. (Aluva) 26,166.00
6 ITA-5258/Del/2012
6. Osho Time Centre (Rajkot) 24,548.00
7. English Edition Publishers & Distt. 5,80,601.00
(Mumbai)(4/n)
8. Circle News Agency (Ghaziabad) 94 24,067.00
9. Children Book Centre Pvt.Ltd. (Patna)(1/a) 67,055.00
10. Balaji Book Distributor (Chennai) 42,522.00
Total 9,36,598.00
14. Accordingly, the amount of `9,36,598/- is disallowed on account
of failure of the assessee to provide any copy of correspondence with
these parties and also failure to communicate the address of these
debtor parties and addition is sustained to that extent and the balance
addition is deleted. Accordingly, ground No.3 of the Revenue's appeal
is partly allowed.
15. Ground No.4 of the Revenue's appeal is as under:-
"On the facts and in the circumstances of the case and
law, the ld.CIT(A) has erred in deleting the addition of
Rs.5,40,637/- made u/s 2(22)(e) of the Act on account of
deemed dividend."
16. Learned DR submitted that the CIT(A) has admitted additional
evidence in contravention of Rule 46A of the Income-tax Rules, 1962.
She relied on the order of the Assessing Officer.
17. Learned counsel for the assessee submitted that the relevant
details have been filed at page 187 and 188 of the compilation filed
before the Tribunal. He submitted that the provision of Section
2(22)(e) does not apply to the facts of the assessee's case since
deemed dividend addition could be made only in the hands of a person
who is a shareholder of the lender company and not in the hands of a
person other than a shareholder.
7 ITA-5258/Del/2012
18. We have considered the submissions of both the sides and also
the details filed by the assessee in the compilation before us. We find
that the provision of Section 2(22)(e) was not applicable in the case of
the assessee as it is well settled that deemed dividend can be
assessed only in the hands of a person who is a shareholder of the
lender company and not in the hands of a person other than a
shareholder. The issue is covered in favour of the assessee by the
decision of Mumbai Bench of the Tribunal in the case of ACIT Vs.
Bhaumik Colors Pvt.Ltd. 27 SOT 270 (Bom). The CIT(A) has decided
the issue correctly in favour of the assessee and accordingly, the order
of the CIT(A) on this issue is confirmed and ground No.4 of the
Revenue's appeal is dismissed.
19. In the result, the appeal of the Revenue is partly allowed.
Decision pronounced in the open Court on 4th March, 2015.
Sd/- Sd/-
KAPOOR)
(T.S. KAPOOR) (G.C. GUPTA)
(G.C. GUPTA)
ACCOUNTANT MEMBER VICE PRESIDENT
VK.
Copy forwarded to: -
1. Appellant : Income Tax Officer,
Ward-
Ward-10(3), New Delhi.
2. Respondent : M/s Diamond Pocket Books Pvt.Ltd.,
Phase-II,
X-30, Okhla Industrial Area, Phase-
New Delhi 110 020.
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar
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