IL&FS RAIL LTD.,GURGAON V. DCIT, GURGAON

ITA 1288/DEL/2016

AI Insights

The case involves IL & FS Rail Limited, the appellant, contesting an addition of Rs. 2,94,11,091 to their income for the Assessment Year 2011-12, which was affirmed by the CIT(A). The addition was based on the recalculated profits by the Assessing Officer, who invoked AS-7 standards, which the assessee argued was inappropriate for their case. The Tribunal found merit in the assessee's arguments and directed a re-adjudication. Additionally, the assessee contested the rejection of their TDS claim of Rs. 55,84,00,470, which was based on the non-inclusion of a mobilization advance in the income for the year. The Tribunal upheld the CIT(A)'s decision, rejecting the claim.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471784 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Other Referred Cases: Toyo engg. India Ltd. (11 SOT 422 Mumbai), Pradeep Kumar Dhir 107 ITD 118 (Chandigarh)
• Laws Referred To: AS-7
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: TARANDEEP SINGH
• Keywords: Set aside; Opportunity of being heard; TDS

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘F’: NEW DELHI) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No:-1288/Del/2016 (Assessment Year- 2011-12) IL & FS Rail Limited 2nd Floor, Ambiance Corporate Towers, Ambiance Island, NH-8, Gurgaon- 122001 Vs. DCIT Circle -1 (1) Gurgaon PAN No:AABCI8621F APPELLANT RESPONDENT Appellant by: Shri Tarandeep Singh, FCA Respondent by:Ms.Harpreet Kaur Hansra, Sr.DR Date of Hearing :17.03.2025 Date of Pronouncement :17.03.2025 ORDER PER BENCH This appeal filed by the assessee is directed against the order dated 28.12.2015 passed by CIT(A)-I, Gurgaon, arising out of the order passed by Assessing Officer dated 31.03.2014 for A.Y.2011-12. 2. The First issue raised by the assessee vide grounds of the appeal no 1-3 are regarding an addition of Rs. 2,94,11,091/- made by the Ld. Assessing Officer. The LD. Council for the assessee has argued for that the addition has been made/affirmed on the basis of in adequate appreciation of true facts of the case. The Ld. Council for the assessee has argued that the invocation of AS-7 Standards by the Ld. AO is not inline with facts of the present case. It has been argued that the addition of Rs. 2,94,11,091/- on the basis of recalculated profits is incorrect. The Ld. Council has been submitted that two category of expenses included by the Ld. AO included in his calculations, are not its business expenses but rather reimbursement of expenses as per contracts with third parties. The Ld. Council accordingly requested for deletion of the addition. The Ld. DR argued in favour of order of lower authorities. 3. We have heard rival submission on the matter in the light of material available records. We are of the considered view that there exists a case for re-adjudication of the matter at the end of the Ld. AO in the light of the arguments and evidenceput forth by the assessee. Accordingly, in the interest of justice, we set aside the order of lower authorities on this issue and direct the Ld. AO to re-adjudicate the matter De Novo, after giving due opportunity of being heard to the assessee and by passing a speaking order. The assessee shall comply with statutory notices issued by the Ld. AO. Accordingly, grounds of appeal no 1-3 raised by the assessee are allowed for statistical purposes. 4. The next issue raised by the assessee vide grounds of the appeal no 4 & 5 is regarding rejection of assessee claim for the TDS amount of Rs. 55,84,00,470/-. The Ld. AO made the impugned addition on the premise that the impugned mobilisation advance of Rs. 27,92,23,478/- upon which TDS was claimed has not been shown asincome in the year under consideration. The Ld. CIT(A) has considered the issue in para 4.2 of his order on page 16. Applying the ratio laid down by Hon’ble Mumbai Bench & the Chandigarh Bench of this tribunal in Toyo engg. India Ltd. (11 SOT 422 Mumbai) and Pradeep Kumar Dhir 107 ITD 118 (Chandigarh) he, rejected the claim of appellant. The Ld. Counsel for the assessee reiterated the arguments taken before the Ld. First Appellate Authority. The Ld. DR argued in favour of the lower authorities. 5. We have heard rival submission on the matter in the light of material available records. We have noted that the decision of the lower authorities is based upon correct understanding of the statutory provisions governing the matter. We are therefore of the considered view that there is no case for interference to the order of the Ld. CIT(A) at this stage. The same is therefore confirmed and the grounds of appeal no 4 & 5 is dismissed. 6. In the result appeal of the assessee is partly allowed. Order pronounced in the Open Court on 17.03.2025 Sd/- Sd/- (SATBEER SINGH GODARA) (AMITABH SHUKLA) JUDICIAL MEMBER ACCOUNTANT MEMBER *Neha, Sr. PS* Dated: /03/2025. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "