Shri D.Sivakumar, CHENNAI V. ACIT, CHENNAI

ITA 1087/CHNY/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 9876 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 06-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T PADMANABHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH A : CHENNAI [BEFORE SHRI PRADEEP PARIKH, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NO. 1087/MDS/09 ASSESSMENT YEAR : 2004-05 SHRI D. SIVAKUMAR B-402, CENTRAL PARK ELCOT AVENUE SHOLINGANALLUR CHENNAI - 119 VS THE ACIT CIRCLE V CHENNAI [PAN AMAPS 9769 A ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T. PADMANABHAN RESPONDENT BY : SHRI SHAJI P JACOB O R D E R PER HARI OM MARATHA, JM: THIS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2004-05 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 6.4.2009. 2. THE SOLE ISSUE RAISED IN THIS APPEAL RELATES TO ALLEGED SUPPRESSED CONTRACT RECEIPTS TO THE TUNE OF RS. 7,1 7,500. THE FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE EXECUTES C ONTRACT WORK AND DURING THE RELEVANT PERIOD, HE EXECUTED WORK MAINLY ENTRUSTED BY THE CLASSIC GROUP OF COMPANIES, ESPECIALLY OF M/S CLASS IC CONSTRUCTIONS. THE ASSESSEE HAS SHOWN AN AMOUNT OF RS. 10,50,000 AS CONTRACT RECEIPTS OF THE YEAR FROM M/S CLASSIC CONSTRUCTIONS , BUT AS A RESULT OF SURVEY CONDUCTED IN THE PREMISES OF M/S CLASSIC CON STRUCTIONS, IT WAS ITA 1087/09 :- 2 -: REVEALED THAT A SUM OF RS. 17,67,500 WAS PAID TO TH IS ASSESSEE FOR VARIOUS CIVIL WORKS EXECUTED BY HIM DURING THE FINA NCIAL YEAR 2003-04. DURING THE SURVEY, IT WAS ALSO FOUND THAT SHRI D.SI VAKUMAR (THE CONTRACTOR) HAD WRITTEN A LETTER DATED 4.7.2006 TO M/S CLASSIC CONSTRUCTIONS (THE CONTRACTEE) STATING THEREIN THAT THE CONTRACT WORK TO THE EXTENT OF RS. 17,67,500 WAS EXECUTED BY HIM AND SAME THING WAS ALSO REPEATED IN LETTER DATED 15.10.2006 ADDRESSED TO THE CONTRACTEE. BY TREATING THESE LETTERS AS ASSESSEES ADMISSION O F EXECUTING WORK TO THE TUNE OF RS. 17,67,500, THE ASSESSING OFFICER RE PLACED THIS FIGURE WITH RS. 10,50,000 SHOWN BY THE ASSESSEE IN HIS PRO FIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.3.2007 AND MADE THE ADDITION OF RS. 7,17,500 TO THE TOTAL INCOME OF THE ASSESSEE. THIS ADDITION WA S ASSAILED IN FIRST APPEAL BEFORE THE LD. CIT(A), BUT THE ASSESSEE COUL D NOT SUCCEED AS THE FIRST APPELLATE AUTHORITY ALSO RELIED ON THE LE TTERS WRITTEN BY THE CONTRACTOR TO THE CONTRACTEE AS DISCUSSED ABOVE. 3. BEFORE US SIMILAR ARGUMENTS WERE TENDERED FROM B OTH SIDES. BUT IN ADDITION TO THE ABOVE, IT WAS ARGUED, WITH REFER ENCE TO A COPY OF TRIBUNAL ORDER DATED 6.2.2009 RENDERED IN THE CASE OF CONTRACTEE NAMELY, M/S CLASSIC CONSTRUCTIONS FOR THE SAME ASS ESSMENT YEAR IN I.T.A.NO. 625/MDS/08 IN WHICH IT HAS BEEN HELD THAT THE OUTSTANDING AMOUNT OF RS. 7,17,500 WAS THE INCOME OF THE CONTR ACTEE AND HAS BEEN CONFIRMED IN CONTRACTEES HANDS. WITH THE H ELP OF THIS FINDING OF THE TRIBUNAL IN CONTRACTEES CASE, IT WAS ARGUED TH AT WITH NO STRETCH OF ITA 1087/09 :- 3 -: IMAGINATION, THIS AMOUNT CAN NOW BE ADDED IN THE HA NDS OF THE CONTRACTOR - ASSESSEE. 4. WE HAVE GONE THROUGH THE TRIBUNAL ORDER(SUPRA) A ND ARE CONVINCED THAT THE TRIBUNAL HAS FOUND THAT THE DIFF ERENCE AMOUNT OF RS.7,17,500, WHICH WAS ACTUALLY IN DISPUTE, WAS NEV ER PAID TO THIS CONTRACTOR. IN THE GIVEN FACTS OF THE CASE, THIS A MOUNT HAS BEEN CONFIRMED IN THE HANDS OF THE CONTRACTEE. SINCE VE RY THIS AMOUNT HAS BEEN TREATED AS THE INCOME OF THE CONTRACTEE THEN H OW COME IT BE TREATED AS THE CONTRACT RECEIPT OF THIS ASSESSEE. THIS FACTUAL MATRIX COULD NOT BE CONTROVERTED BY THE LD.DR. HENCE, IN VIEW OF THE FINDING OF THE HON'BLE TRIBUNAL IN CONTRACTEES CASE, WE CA NNOT SUSTAIN THIS ADDITION IN THE HANDS OF THE ASSESSEE AND THEREFORE , WE ORDER TO DELETE THIS AMOUNT FROM THE HANDS OF THE THE ASSES SEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05. 01.2010. (PRADEEP PARIKH) VICE-PRESIDENT ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 05 TH JANUARY, 10 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR