Asst. Comm. of Income-tax, Pune V. Shri Tukaram J. Naik, Pune

ITA 1034/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9715 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH SHRI RAJIV JAIN
• Keywords: Revised return
• Section: 133A; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.1034/PN/2011 (ASSTT. YEAR : 2007-08) ACIT, CIRCLE-5, PUNE. .. APPELLANT VS. TUKARAM J.NAIK, PROP: T.J.NAIK & CO., NEAR FOREST COLONY, SHALIMAR CHOWK, DAUND. .. RESPONDENT PAN: ABMPN1377L ASSESSEE BY : WRITTEN SUBMISSIONS DEPARTMENT BY : SHRI S.K.SINGH/ SHRI RAJIV JAIN DATE OF HEARING : 23.08.2012 DATE OF PRONOUNCEMENT : 28.08.2012 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF THE CIT(A) ON FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(APPEALS) ERRED IN DELETING THE ADDI TION OF RS.23,64,240/- MADE ON ACCOUNT OF CLOSING WORK IN P ROGRESS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(APPEALS) ERRED IN FAILING TO APPREC IATE THAT THE ASSESSEE HAD NOT SHOWN THE RECEIVABLES IN THE BALAN CE SHEET NOR HAD SHOWN THE WORK IN PROGRESS AGAINST SUCH REC EIVABLES EVEN WHILE CLAIMING THE CORRESPONDING EXPENSES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(APPEALS) ERRED IN REFUSING TO CONSI DER THE ENTIRE MATTER WITH REGARD TO THE SURVEY ACTION U/S 133A DURING WHICH THE ASSESSEE HAD OFFERED ADDITIONAL UNACCOUNT ED INCOME TOWARDS WORK IN PROGRESS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(APPEALS) ERRED IN HOLDING THAT SINC E THE PROVISIONS OF SECTION 145(3) HAD NOT BEEN SPECIFICA LLY INVOKED BY THE ASSESSING OFFICER, THE SAME COULD NOT BE MAD E APPLICABLE. 2 5. WITHOUT PREJUDICE TO THE ABOVE, THE ORDER OF THE LE ARNED CIT(APPEALS) BE SET ASIDE AND DIRECTIONS BE ISSUED TO ADJUDICATE THE MATTER AFRESH AFTER CONSIDERING THE ISSUE OF SURVEY. 6. FOR THESE REASONS AND SUCH OTHER REASONS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT(A PPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RES TORED. 2. THE MAIN ISSUE IS WITH REGARD TO ADDITION OF RS. 23,64,240/- MADE ON ACCOUNT OF CLOSING WORK IN PROGRESS. THE A SSESSEE, THROUGH WRITTEN SUBMISSIONS, POINTED OUT THAT AN ID ENTICAL ISSUE AROSE IN ASSESSEES OWN CASE FOR A.YS. 2000-01, 200 1-02, 2002-03, 2003-04 AND 2004-05 WHEREIN SIMILAR ISSUE WAS DECID ED BY HON'BLE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 16. IN VIEW OF THE AFORESAID DISCUSSION, IT IS QUI TE CLEAR THAT THE CIRCUMSTANCES PREVAILING WITH THE ASSESSEE TO R EVISE AND RE-REVISE ITS RETURNS OF INCOME ARE WELL FOUNDED. IT IS QUITE CLEAR THAT ORIGINALLY THE INCOME OF RS.80 LAKHS WAS DECLARED IN THE COMPUTATION OF INCOME, AS IS EVIDENT FROM A COP Y PLACED AT PAGE 109 OF THE PAPER BOOK. IT IS ALSO CLEAR THAT THE INCOME FROM BUSINESS OTHER THAN RS.80 LAKHS ON ACCOUNT OF WIP, HAS BEEN DECLARED AS PER REGULAR METHOD OF ACCOUNTING F OLLOWED, I.E., CASH SYSTEM OF ACCOUNTING. NOTABLY, ADDITION AL INCOME OF RS.80 LAKHS HAS BEEN OFFERED IN THE COMPUTATION OF INCOME AND HAS NOT AFFECTED THE REGULAR ACCOUNTING SYSTEM FOLLOWED. THEREFORE, THE PLEA OF THE LEARNED DEPARTMENTAL REP RESENTATIVE THAT THE RETURN HAS BEEN REVISED TO CHANGE THE METH OD OF ACCOUNTING, IN OUR VIEW, IS UNTENABLE. FACTUALLY, ADDITIONAL INCOME OF RS.80 LAKHS WHICH WAS HITHERTO DECLARED I N THE REVISED RETURN CANNOT BE SAID TO BE A CHANGE MADE I N ACCOUNTING SYSTEM, BECAUSE AT THE ORIGINAL STAGE TH ERE WAS NO ADJUSTMENT MADE IN THE BOOKS OF ACCOUNT WHICH CONTI NUED TO BE MAINTAINED ON CASH BASIS, WHILE THE SAID AMOUNT WAS DECLARED AS ADDITIONAL INCOME BY WAY OF COMPUTATION OF INCOME. UNDER THESE CIRCUMSTANCES, THE RELIANCE PL ACED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE JUDG MENT OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE O F DEEPNARAYAN NAGU & CO. (SUPRA) TO ARGUE THE UNTENAB ILITY OF THE REVISED RETURN, IS MISPLACED. ACCORDING TO THE LEARNED DEPARTMENTAL REPRESENTATIVE, AS PER THE HON'BLE MAD HYA PRADESH HIGH COURT, A REVISED RETURN CANNOT BE FILE D IN ORDER TO ADJUST OR REVISE THE METHOD OF ACCOUNTING. ON A CTS, IN THIS CASE, WE DO NOT FIND THAT THE RETURN HAS BEEN REVIS ED TO EFFECTUATE ANY CHANGE IN THE METHOD OF ACCOUNTING. MOREOVER, AS EXPLAINED BY THE LEARNED COUNSEL, THE DECLARATIO N OF RS.80 LAKHS ON ACCOUNT OF ONLY CLOSING WIP IN THE ASSESSM ENT YEAR 2003-04 IS UNDENIABLY INCONSISTENT WITH THE NORMS O F ACCOUNTING, SINCE IT DOES NOT TAKE INTO CONSIDERATI ON THE 3 ADJUSTMENT IN THE OPENING WIP AND, THEREFORE, THIS ITSELF CONSTITUTES A WRONG WITHIN THE MEANING OF SECTION 139(5) OF THE ACT. APART THEREFROM, THE CIRCUMSTANCES EXPLAI NED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) IN TERMS OF WHI CH THE REVISED RETURN WAS NECESSITATED, HAVE NOT BEEN CONT ROVERTED BEFORE US. CONSIDERING ALL THESE FACTORS, IN OUR V IEW, THE COMMISSIONER OF INCOME-TAX(APPEALS) MADE NO MISTAKE IN HOLDING THAT THE REVISED AND RE-REVISED RETURNS FAL L WITHIN THE PARAMETERS OF SECTION 139(5) OF THE ACT. THUS THE ACTION OF THE ASSESSING OFFICER IN MAKING THE ADDITION MERELY BEC AUSE THE AMOUNT WAS OFFERED IN THE ORIGINAL RETURN OF INCOME WAS FILED ON 29.11.2003 CANNOT BE UPHELD, SINCE IT WAS INCUMB ENT ON THE REVENUE TO HAVE CONSIDERED THE REVISED AND RE-R EVISED RETURNS AND THE REASONS PREVAILING FOR THE SAME AND ONLY AFTER EVALUATING THE SAME THE ISSUE WAS REQUIRED TO BE EX AMINED. IN OUR VIEW, THE COMMISSIONER OF INCOME-TAX(APPEALS ) HAS CORRECTLY APPRECIATED THE CONTROVERSY AND UNDER THE SE CIRCUMSTANCES, WE HEREBY AFFIRM HIS ORDER. NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE BY THE REVENUE. FACTS BEING SIMILAR SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING OF THE CIT(A) WHO HAS DELETED THE ADDITION OF RS.23,64,240/- MADE ON ACCOUNT OF CLOSI NG WORK IN PROGRESS. SAME IS UPHELD. 3. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF AUGUST, 2012. SD/- SD/- ( R.K.PANDA ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 28 TH AUGUST, 2012. COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ACIT, CIRCLE-5, PUNE. 3. THE CIT(A)-III, PUNE. 4. THE CIT-III, PUNE. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.