Soma BSCPL Joint Venture, Hyderabad V. ACIT, Circle 6(1), Hyderabad

CO 3/HYD/2011

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6213 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 05-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA SINHA
• Assessee Lawyers: V RAGHAVENDRA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMB ER ITA NO.1320/HYD/10: ASST . YEAR: 2007-08 ACIT, CIR-6(1), HYDERABAD. VS BGS-SGS- SOMA (JV), HYDERABAD. PAN: AAAAB 3714 F (APPELLANT) (RESPONDENT) C.O. NO. 2/HYD/11: ASST. YEAR 2007-08 (IN ITA NO. 1320/HYD/10) BGS-SGS- SOMA (JV), -V- ACIT , CIR-6(1), HYDERABAD. HYDERABAD. PAN: AAAAB 3714 F (APPELLANT) (RESPONDENT) ITA NO.1321/HYD/10: ASST . YEAR: 2007-08 ACIT, CIR-6(1), HYDERABAD. VS M/S. SOMA-BSCPL (JV), HYDERABAD. PAN: AACAS 0399 F (APPELLANT) (RESPONDENT) C.O. NO. 3/HYD/11: ASST. YEAR 2007-08 (IN ITA NO. 1321/HYD/10) M/S. SOMA-BSCPL (JV), ACIT, CIR-6(1) HYDERABAD. V- HYDERABAD. PAN: AACAS 0399 F (APPELLANT) APPELLANT BY : SHRI. V. RAGHAVENDRA RAO RESPONDENT BY : SMT. VASUNDHARA SINHA ITA NOS. 1320 & 1321 OF 2010 AND CO NOS. 2 AND 3 OF 2011 BGS-SGS-SOMA (JV) & OTHER, HYDERABAD. ================================ 2 O R D E R PER AKBER BASHA, AM:- THESE TWO APPEALS BY THE REVENUE AND OTHER TWO CROSS OBJECTIONS BY TWO DIFFERENT ASSESSEES ARE DIRECTED AGAINST T HE SEPARATE ORDERS OF CIT (A)-IV, HYDERABAD AND THEY PERTAIN TO T HE ASSESSMENT YEAR 2007-08. SINCE COMMON ISSUES FOR CONSIDERATION ARE INVOLVED AND THE REPRESENTATIVE OF THE ASSESSEES IS ALSO COMMON IN THESE APPEALS & CROSS OBJECTIONS, THESE ARE TAKEN UP TOGETHER AND DISPO SED OFF BY THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. 2. SINCE COMMON AND IDENTICAL GROUNDS WERE TAKEN BY THE REVENUE IN ITS APPEALS, FOR THE SAKE OF BREVITY, WE REPRODUCE HEREUNDER THE GROUNDS RAISED BY THE REVENUE IN ITA NO .1320/HYD/10: 1. THE ORDER OF THE LD. CIT (A) IS BAD CONTRARY T O THE PROVISION OF THE INCOME-TAX ACT. 2. THE CIT (A) ERRED IN DIRECTING TO ALLOW CREDIT FOR TH E AMOUNT OF TDS EVEN THOUGH THE CORRESPONDING RECEIPTS ARE NOT OFFE RED TO TAX. THE PROVISIONS OF SECTION 199 OF THE INCOME-TAX A CT ALLOW CREDIT FOR TDS ONLY TO THE EXTENT OF RECEIPTS OFFERED TO TAX ON WHICH TDS WAS DEDUCTED. 3. THE CIT (A) IS NOT CORRECT IN HOLDING TAT THE PROVISION S OF LAW CONTAINED IN SECTION 199 DO NOT STAND IN THE WAY OF TH E CLAIM MADE BY THE ASSESSEE FOR CREDIT IN RESPECT OF TDS MADE D URING THE RELEVANT PREVIOUS YEAR. ITA NOS. 1320 & 1321 OF 2010 AND CO NOS. 2 AND 3 OF 2011 BGS-SGS-SOMA (JV) & OTHER, HYDERABAD. ================================ 3 4. THE CIT (A) ERRED IN REFERRING TO THE DECISIONS OF TH E M/S PROGRESSIVE CONSTRUCTION LIMITED, IN ITA NO.482 & 557/HYD/2001 DATED 23-11-2006. 5. IN THE CASE OF PRADEEP KUMAR DHIR VS. ACIT REPORTED IN 303 ITR (AT) 45 (CHD) (ALSO REPORTED IN 107 ITD 118), THE THI RD MEMBER HAS HELD THAT TDS CREDIT CAN BE GIVEN ONLY IN THE YEAR IN WHICH THE INCOME AS PER TDS CERTIFICATE IS OFFERED TO TAX AND THE SAME WAS FOLLOWED BY THE HONBLE JURISDICTIONAL ITAT IN THE CASE OF MS. LIMAK SOMA (JV), ITA NO.99/HYD/2010 FOR TH E ASSESSMENT YEAR 2005-06. 6. ANY OTHER GROUND OF APPEAL THAT MAYBE URGED AT THE TIME OF HEARING. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT THE CIT [A] IS NOT CORRECT IN ALLOWING THE CREDIT FOR THE AMOUNT OF TDS EVEN THOUGH THE CORRESPONDING RECEIPTS ARE NOT OFFE RED TO TAX. THE PROVISIONS OF SECTION 199 OF THE INCOME-TAX ACT ALLOW CRED IT FOR TDS ONLY TO THE EXTENT OF RECEIPTS OFFERED TO TAX ON WHICH TDS WAS DEDUCTED. HE RELIED ON THE DECISION OF IN THE CASE OF PRADEEP KUMAR DHIR VS. ACIT REPORTED IN 303 ITR (AT) 45 (CHD), THE THIRD MEMBER HAS HELD THAT TDS CREDIT CAN BE GIVEN ONLY IN THE YEAR IN WHICH THE INCOME AS PER TDS CERTIFICATE IS OFFERED TO TAX AND THE SAME WAS FOLLO WED BY THE HONBLE JURISDICTIONAL ITAT IN THE CASE OF M/S. LIMAK SOM A (JV), ITA NO.99/HYD/2010 FOR THE ASSESSMENT YEAR 2005-06. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF PROGRESSIV E CONSTRUCTIONS LIMITED, HYDERABAD [SUPRA] HAS CONSIDERED VAR IOUS ITA NOS. 1320 & 1321 OF 2010 AND CO NOS. 2 AND 3 OF 2011 BGS-SGS-SOMA (JV) & OTHER, HYDERABAD. ================================ 4 DECISIONS OF DIFFERENT BENCHES OF THE TRIBUNAL AND HAS HE LD THAT THEY ARE INCLINED TO FOLLOW THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S TOYO ENGINEERING INDIA LTD. REPORTED IN 5 SOT 616 (MUM.) HE SUBMITTED THAT THE ISSUE IN THIS APPEAL IS ALSO COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HYDERABAD TRIBUNAL DATED 7-7- 2010 IN ITA NO.515/HYD/2010 IN THE CASE M/S PATEL SOMA J.V. HYDERABAD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSU E OF ALLOWING CREDIT OF TDS MADE ON MOBILIZATION CHARGES IS COVERED IN FAVOR OF THE ASSESSEE WITH THE LATEST DECISION OF HYDERABAD BENCH OF THE TRIBU NAL DATED 7-7- 2010 IN M/S, PATEL SOMA J.V. IN ITA NO.515/HYD/10, WH EREIN THE EARLIER DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF M/S PROGRESSIVE CONSTRUCTION LIMITED (ITA NO.482/HYD/01` DAT ED 23-11- 2006) WAS FOLLOWED. FACTS OF THE CASES OF THE ASSESSEE BEFOR E US BEING SIMILAR TO THE ONE CONSIDERED AND DECIDED BY THE HYDERA BAD BENCH OF THE TRIBUNAL IN THE CASE OF M/S. PATEL SOMA J.V. AND W E BEING IN AGREEMENT WITH THE DECISION OF THE TRIBUNAL RELIED UP ON BY THE LEARNED COUNSEL FOR THE ASSESSEE, DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND REJECT THE GROUNDS OF THE REVENUE IN THESE APPEALS FOR THE SAME REASONS. WE ALSO SEE MERIT IN THE ARGUMENTS OF THE LEAN ED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE OFFERED THE VALUE OF WORK IN PROGRESS AS ITS REVENUE IN THE PROFIT AND LOSS ACCOUNT BY PLACING RE LIANCE ON THE PROFIT AND LOSS ACCOUNT PLACED BEFORE US AND HENCE, THE AS SESSEE ALREADY OFFERED THE INCOME AS THE VALUE OF WORK IN PROGRESS IN ITS PROFIT AND LOSS ACCOUNT RELATING TO THE MOBILIZATION ADVANCE ON WHICH T DS WAS DEDUCTED. IN THE CASE RELIED ON BY THE LEARNED DEPART MENTAL ITA NOS. 1320 & 1321 OF 2010 AND CO NOS. 2 AND 3 OF 2011 BGS-SGS-SOMA (JV) & OTHER, HYDERABAD. ================================ 5 REPRESENTATIVE IN THE CASE OF M/S. LIMAK SOMA & OTHERS (SUPRA), THERE IS NO FINDING BY THE BENCH WITH REGARD TO THE VALUE O F WORK-IN-PROGRESS SHOWN IN THE PROFIT & LOSS ACCOUNT AS THE INCOME OF THE A SSESSEE, RELATING TO THE MOBILIZATION OF ADVANCE RECEIVED. IN VIEW OF THE ABOVE, BY THE ASSESSEE MERELY SUPPORT THE ORDERS OF THE CIT (A) AND ACCORDINGLY THE SAME HAVE BECOME INFRUCTUOUS. HENCE THEY A RE DISMISSED AS SUCH. 6. IN THE RESULT, BOTH THE APPEALS BY THE REVENUE AS WELL AS THE CROSS OBJECTIONS FILED BY THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 08 -06-2011. SD/- SD/- (G.C. GUPTA)) (AKBER BASHA) VICE PRESIDENT. ACCOUNTANT MEMBER. DT/-08-06-2011. COPY FORWARDED TO: 1. ACIT, CIR-6(1), IT TOWERS, MASAB TANK, HYDERABAD. 2. 3. 4. 5. 6. 7. JMR* M/S. BGS-SGS-SOMA (JV),8-2-623/5/1/1/14, AVENUE-4, BANJARA HILLS, HYDERABAD. BGS-SGS SOMA JOINT VENTURE, AVENUE-4, BANJARA HILLS, HYDERABAD. CIT (A)-IV, HYDERABAD. CIT, AP, HYDERABAD. THE DR, ITAT, HYDERABAD. ITA NOS. 1320 & 1321 OF 2010 AND CO NOS. 2 AND 3 OF 2011 BGS-SGS-SOMA (JV) & OTHER, HYDERABAD. ================================ 6