ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-25(1), NEW DELHI, DELHI V. VEOLIA INDIA PRIVATE LIMITED, DELHI

ITA 4074/DEL/2024

AI Insights

The case involves an appeal by the Revenue against Veolia India Pvt Ltd concerning the deletion of an addition of Rs. 12,00,46,611/- related to contract revenue under Accounting Standard AS-7 for the Assessment Year 2014-15. The primary legal issue was whether the CIT(A) erred in law and on facts in deleting this addition. The Tribunal noted that the assessee's method of recognizing contract revenue had been previously accepted by the department and upheld by the ITAT in earlier years (AY 2011-12, AY 2013-14, AY 2015-16, and AY 2016-17). The Tribunal found no new grounds or changes in the facts of the case that would warrant a departure from the established precedent.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314468 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Other Referred Cases: AY 2015-16, AY 2016-17, AY 2011-12, AY 2013-14
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIMISHA SINGH

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 4074/DEL/2024 [A.Y 2014-15] The A.C.I.T Vs. Veolia India Pvt Ltd Circle - 25(1) B-1, Marble Arch New Delhi Prithviraj Road, New Delhi PAN: AABCV 7389 R (Appellant) Respondent) Assessee By : None Department By : Ms. Nimisha Singh, CIT- DR Date of Hearing : 08.05.2025 Date of Pronouncement : 08.05.2025 ORDER PER NAVEEN CHANDRA, AM :- This appeal by the Revenue is directed against the order of the ld. NFAC, New Delhi dated 25.06.2024 for A.Y 2014-15. 2 ITA No. 4074 /DEL/2024 Veolia India Pvt Ltd [A.Y 2014-15] 2. The grounds raised by the Revenue read as under: 1. \"Whether the Ld. CIT(A) has erred in law and on the facts case, in deleting the addition of Rs. 12,00,46,611/- on account of contract revenue under Accounting Standard [AS]-7 [Construction contracts] in respect of various contracts undertaken by the assessee. 2. The appellant craves to be allowed to add any fresh ground(s) of appeal and/or delete or amend any of the ground(s) of appeal.” 3. None appeared on behalf of the assessee. We decided to proceed ex-parte. The ld. DR was heard at length. Case records carefully perused. 4. At the very outset, it would be pertinent to reproduce the findings of the ld. CIT(A) with regard to the contract revenue under AS-7 which read as under: “Accounts regularly maintained in the course of business are to be taken as correct unless there are strong and sufficient reasons to indicate that they are unreliable. The Ld. AO has not invoked the provisions of section 145(3) of the Income-tax Act, 1961. He has neither made any adverse comments on the correctness or completeness of the accounts maintained by the assessee nor 3 ITA No. 4074 /DEL/2024 Veolia India Pvt Ltd [A.Y 2014-15] provided any finding in the assessment order that the assessee has not followed the accounting standards notified under sub-section(2) of the said section. The appellant’s methodology of estimating budgeted contract cost, determining the percentage of completion and computing contract revenue has also been duly accepted by the auditors of the appellant. In the absence of any adverse finding by the Ld. AO as to the correctness or completeness of accounts, or that the assessee has not followed the accounting standards notified under subsection (2), the method adopted by the assessee for recognizing contract revenue as per AS7 should not be disturbed and must be accepted as correct. 5. In light of the above detailed discussion, it is crystal clear that the method adopted by the appellant for recognizing contract revenue under accounting standard AS-7 has already been accepted by the department for the AY 2015-16 and AY 2016- 17. The Hon’ble ITAT has also deleted the additions made by the Ld.AO for contract revenue allegedly short-recognized by the appellant for the AY 2011-12 and the AY 2013-14. The Hon’ble ITAT found that the methodology consistently applied by the appellant for computing budgeted costs to arrive at the contract revenue to be recognized as income under contract revenue under AS-7 is correct and rejected the methodologies adopted by the Ld. AO and by the Hon’ble DRP because such methodologies lacked merit. The facts of the appellant’s business and the manner of recognizing contract revenue for the year ended 31 Mar 2014 (AY 2014-15) have remained unchanged vis-à-vis the above years. Hence, the addition 4 ITA No. 4074 /DEL/2024 Veolia India Pvt Ltd [A.Y 2014-15] of Rs. 12,00,46,611/- made by the Ld. AO towards contract revenue under accounting standard AS-7 is not sustainable and is liable to be deleted. The addition of Rs. 12,00,46,611 /- is, therefore, deleted and the grounds of appeal in respect of this issue are hereby allowed.” 5. We have heard the ld. DR and have perused the relevant material on record. The ld. CIT(A) has followed the decision of the coordinate bench of the ITAT in assessee’s own case for A.Ys 2011-12 and 2013-14, which has upheld the methodology adopted by the assessee for computing contract revenue under AS-7. Accordingly, finding no plausible reason, we decline to interfere with the order of the first appellate authority and dismiss the ground raised by the Revenue. 6. In the result, appeal of Revenue in ITA No. 4074/DEL/2024 is dismissed. Order pronounced in open court on 08.05.2025. Sd/- Sd/- [SATBEER SINGH GODARA] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 08th MAY, 2025. VL/ 5 ITA No. 4074 /DEL/2024 Veolia India Pvt Ltd [A.Y 2014-15] Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 3. Date on which the typed draft Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order "