M/s SVEC Constructions Limited, Hyderabad V. ACIT, Circle 3(3), Hyderabad

CO 7/HYD/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7463 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 07-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K GNANAPRAKASH
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Reopening of assessment
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.1172/HYD/2010 (ASSESSMENT YEAR 2005-06) ASSTT . COMMISSIONER OF INCOME - TAX, CIRCLE 3(3), HYDERABAD (APPELLANT) V/S M/S. SVEC CONSTRUCTIONS LTD., HYDERABAD ( PAN - AADCS 2215 B ) (RESPONDENT) CROSS-OBJECTION NO.7/HYD/2011 ( IN ITA NO.1172/HYD/2010) (ASSESSMENT YEAR 2005-06) M/S. SVEC CONSTRUCTIONS LTD., HYDERABAD ( PAN - AADCS 2215 B ) (CROSS-OBJECTOR) V/S ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE 3(3), HYDERABAD (RESPONDENT) ASSESSEE BY : SHRI V.RAGHAVENDRA RAO DEPARTMENT BY : SHRI K.GNANA PRAKASH DATE OF HEARING 5.7.2012 DATE OF PRONOUNCEMENT 11.7.2012 O R D E R PER D.KARUNAKARA RAO, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE AND CROSS-OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMM ISSIONER OF INCOME- TAX(APPEALS) IV, HYDERABAD DATED 13.6.2010, FOR THE ASSESSMENT YEAR 2005-06. ITA NO.1172/HYD/2010 & CO 7/HYD/2011 M/S. SVEC CONSTRUCTIONS LTD., HYDERABAD 2 2. AT THE OUTSET, WE MAY NOTE THAT THERE IS A DELA Y OF 101 DAYS IN THE FILING OF THE CROSS-OBJECTIONS BY THE ASSESS EE. ASSESSEE HAS FILED A PETITION, SUPPORTED BY AN AFFIDAVIT, SEEKING CONDON ATION OF DELAY. IT IS PLEADED THAT THE CROSS-OBJECTION HAS COME TO BE FIL ED BELATEDLY DUE TO GENUINE MISUNDERSTANDING OF THE STAFF IN PROMPTLY S ENDING THE PAPERS TO THE ADVOCATE REPRESENTING THE MATTERS OF THE ASSESS EE FOR FILING OF THE SAME BEFORE THE TRIBUNAL. WE ARE CONVINCED WITH T HE REASONABLENESS OF THE CAUSE FOR THE DELAY IN THE FILING OF THE CROSS- OBJECTION. WE ACCORDINGLY CONDONE THE DELAY AND ADMIT THE CROSS-P ETITION FOR ADJUDICATION ON MERITS. REVENUES APPEAL: ITA NO.1172/HYD/2010 : ASSE SSMENT YEAR 2005-06 3. EFFECTIVE GROUNDS OF THE REVENUE IN THIS APPEA L READ AS FOLLOWS- (I) THE COMMISSIONER OF INCOME-TAX(APPEALS) IV HYD ERABAD HAS ERRED BOTH ON FACTS AND IN LAW. (II) THE CIT(A) HAS ERRED IN DIRECTING THE AO TO AL LOW CREDIT FOR TDS ON MOBILIZATION ADVANCE OF RS.8,64,09,300/- AFT ER DUE VERIFICATION ALTHOUGH MOBILIZATION ADVANCE DID NOT FORM PART OF THE TOTAL TURNOVER OF THE ASSESSEE. (III) THE CIT(A) FAILED TO APPRECIATE THE FACT THA T THE ASSESSEE- COMPANY IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTIN G AS PER WHICH CREDIT FOR TDS MAY BE ALLOWED IN THE YEAR IN WHICH THE MOBILISATION ADVANCE IS DEDUCTED FORM THE BILLS OF THE ASSESSEE AND WHEN IT FORMS PART OF THE GROSS CO NTRACT RECEIPTS OF THE ASSESSEE. (IV) THE DECISIONS IN THE CASE OF (I) PROGRESSIVE C ONSTRUCTIONS LTD. (ITA NO.482 AND 557/HYD/2001) AND (II) BGS-SGS SOMA JOINT VENTURE RELIED UPON BY THE CIT(A) HAVE N OT BEEN ACCEPTED BY THE REVENUE AND APPEALS HAVE BEEN MADE BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. 3. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE ISSUE INVOLVED IN THE ABOVE GROUNDS OF THE REVENUE IS COVERED BY THE CONSISTENT DECISIONS OF THE TRIBUNAL IN SIMILAR MATTERS. HE FILED A COPY ITA NO.1172/HYD/2010 & CO 7/HYD/2011 M/S. SVEC CONSTRUCTIONS LTD., HYDERABAD 3 OF THE DECISION OF THE CO-ORDINATE BENCH OF THE TRI BUNAL DATED 6.9.2011 IN THE CASE OF M/S.CSCHK-SOMA JOINT VENTURE, HYDERABAD (ITA NO.1357/HYD/2010 AND CO NO.1/HYD/2011) FOR THE ASSE SSMENT YEAR 2007-08, AND HENCE, SUBMITTED THAT IMPUGNED ORDER O F THE CIT(A) SHOULD BE UPHELD. 4. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESE NTATIVE STRONGLY SUPPORTED THE ORDER OF THE CIT(A), REITERA TING THE AVERMENTS MADE IN THE ABOVE GROUNDS OF APPEAL. 5. WE HEARD BOTH SIDES AND PERUSED THE MATERIAL AV AILABLE ON RECORD. WE FIND THAT AS NOTED IN THE VERY GROUNDS OF APPEAL, THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE CONSISTENT DECISIONS OF THE TRIBUNAL IN SIMILAR MATTERS. IN THE CASE OF M/ S. CSCHK SOMA JOINT VENTURE, HYDERABAD (SUPRA), VIDE ITS ORDER DATED 9. 9.2011, COPY OF WHICH IS FURNISHED BEFORE US, THE TRIBUNAL FOLLOWING STIL L EARLIER ORDER OF THE TRIBUNAL DATED 24.9.2010 IN THE CASE OF THAT VERY A SSESSEE FOR ASSESSMENT YEAR 2005-06, HELD THAT CREDIT FOR TDS IS TO BE GIVEN ON CORRESPONDING RECEIPTS OFFERED FOR TAX INCLUDING WO RK IN PROGRESS IF THE WORK IN PROGRESS WAS SUBJECT TO TDS ON RECEIPT OF A DVANCE TOWARDS IT . IN THE ORDER OF THE CIT(A) IMPUGNED IN THIS APPEAL, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO VERIFY THE TDS MADE IN RES PECT OF MOBILIZATION ADVANCES OF RS.8,64,09,300/0- AND GIVE CREDIT FO5R THE SAME AFTER NECESSARY VERIFICATION. SINCE THE DIRECTION OF THE CIT(A) ARE IN CONSONANCE WITH THE CONSISTENT VIEW TAKEN BY THE TR IBUNAL IN SIMILAR MATTERS, WE FIND NO JUSTIFICATION TO INTERFERE WITH THE IMPUGNED ORDER OF THE CIT(A). THE SAME IS ACCORDINGLY UPHELD AND THE GROUNDS OF THE REVENUE IN THIS APPEAL ARE DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.1172/HYD/2010 & CO 7/HYD/2011 M/S. SVEC CONSTRUCTIONS LTD., HYDERABAD 4 ASSESSEE.S CROSS OBJECTION: C.O. NO.7/HYD/2011 (IN ITA NO.1172/HYD/2010) : ASSESSMENT Y EAR 2005-06 7. THE FIRST TWO EFFECTIVE GROUNDS OF THE ASSESSEE IN THE CROSS- OBJECTIONS ARE AGAINST LEGALITY AND VALIDITY OF THE REOPENING OF ASSESSMENT UNDER S.147/148 OF THE ACT, AND THE SAME READ AS FO LLOWS- 1. THE INITIATION OF PROCEEDINGS U/S. 147 ARE INVALID FOR THE REASON THAT THE REASONS RECORDED U/S. 148(2) OF THE IT ACT HAVE NOT BEEN COMMUNICATED TO THE ASSESSEE. 2. THE PROCEEDINGS U/S. 147 OF THE ACT ARE INVALID ALS O FOR THE REASON THAT THERE WAS NO ESCAPEMENT OF INCOME TO ASSESSMENT. T HE INCOME ORIGINALLY DETERMINED U/S. 143(3) OF THE IT ACT AND THAT DETERMINED IN THE RE-ASSESSMENT IS THE SAME. AT THE TIME OF HEARING, NO SERIOUS ARGUMENTS ARE AD VANCED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE ISSUE INVOLVED IN T HE ABOVE GROUNDS. ACCORDINGLY, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 8. THROUGH THE REMAINING TWO GROUNDS URGED IN THE CROSS- OBJECTIONS, ASSESSEE MERELY SEEKS TO SUPPORT THE OR DER OF THE CIT(A), IN THE LIGHT OF THE GROUNDS OF THE REVENUE IN ITS APPE AL. SINCE THOSE GROUNDS DO NOT WARRANT ANY INDEPENDENT ADJUDICATION , THEY ARE REDUNDANT, AND THEY ARE ACCORDINGLY DISMISSED. 9. IN THE RESULT, CROSS-OBJECTION OF THE ASSESSEE IS ALSO DISMISSED. 10. TO SUM UP, APPEAL OF THE REVENUE AS WELL AS TH E CROSS- OBJECTION OF THE ASSESSEE ARE DISMISSED. ITA NO.1172/HYD/2010 & CO 7/HYD/2011 M/S. SVEC CONSTRUCTIONS LTD., HYDERABAD 5 ORDER PRONOUNCED IN THE COURT ON 11.7.2012 SD/- SD/- (ASHA VIJAYARAGHAVAN) (D.KARUNAKARA RAO) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 11TH JULY, 2012 COPY FORWARDED TO: 1. 2. M/S. SVEC CONSTRUCTIONS LTD., 1014, RAGHAVA RATNA TOWERS, CHIRAG ALI LANE HYDERABAD 500 001. ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE 3(3), HYD ERABAD 3 . COMMISSIONER OF INCOME - TAX(APPEALS) - I V HYDERABAD 4 . COMMISSIONER OF INCOME - TAX , III , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.