Deputy Commissioner of Income-tax, Pune V. M/s. B.G. Shirke Construction Technology Pvt.Ltd, Pune

ITA 1114/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6044 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 05-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N ASHOK BABU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1 114 /P U N/201 7 / ASSESSMENT YEAR : 20 1 3 - 14 DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE ....... / APPELLANT / V/S. M/S. B.G. SHIRKE CONSTRUCTION TECHNOLOGY PVT. LTD., 72 - 76, INDUSTRIAL ESTATE, MUNDHWA, PUNE 411036 PAN : AAACB7293D / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI N. ASHOK BABU / DATE OF HEARING : 24 - 07 - 2019 / DATE OF PRONOUNCEMENT : 01 - 0 8 - 201 9 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 1, PUNE DATED 27 - 02 - 2017 FOR THE ASSESSMENT YEAR 201 3 - 14. 2. THE REVENUE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING FOLLOWING G ROUNDS : 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) IS CONTRARY TO THE LAW AND ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2 ITA NO . 1114/PUN/2017, A.Y. 2013 - 14 2. THE LD.CIT(A) ERRED IN DECIDING THAT RETENTION MONEY HAS TO BE TAXED IN THE YEAR OF RECEIPT AND NOT ON ACCRUAL BASIS EVEN THOUGH ASSESSEE IS FOLLOWING MERCANTILE SYSTEM AND ASSESSEE HAS DEBITED ALL EXPENDITURE RELATED TO SUCH CONTRACT RECEIPT INCLUDING RETENTION MONEY. 3. THE LD. CIT(A) ERRED IN CONFIRMING THE VIEW OF ASSESSEE THAT RETENTION MONEY HAS TO B E EXCLUDED IN COMPUTATION OF INCOME, ALTHOUGH THE SAME HAS BEEN SHOWN AS RECEIPT DURING THE YEAR AND CREDITED IN PROFIT AND LOSS ACCOUNT. 4. THE LD. CIT(A) ERRED IN CONFIRMING THE VIEW OF ASSESSEE THAT RETENTION MONEY HAS TO BE EXCLUDED IN COMPUTATION OF INCOME IN VIEW OF DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CABLES (P.) LTD. VS. DY.CIT [2006] REPORTED IN 286 ITR 596 (BOM.) ALTHOUGH THE FACTS OF PRESENT CASE IS DISTINGUISHED. 5. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6. THE APPELLANT CRAVES TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUND OF APPEAL DURING THE COURSE OF APPELLATE P ROCEEDINGS BEFORE THE HON'BLE TRIBUNAL. 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2012 - 13 SIMILAR ADDITION WAS MADE BY THE ASSESSING OFFICER . IN FIRST APPEAL , T HE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION. THE DEPARTMENT CARRIED THE ISSUE IN APPEAL BEFORE THE TRIBUNAL IN ITA NO. 2771/PUN/2016. THE TRIBUNAL VIDE ORDER DATED 07 - 09 - 2018 UPHELD THE FINDINGS OF FIRST APPELLATE AUT HORITY AND DELETED THE ADDITION. 4. ON THE OTHER HAND SHRI N. ASHOK BABU REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. HOWEVER, THE LD. DR FAIRLY ADMITTED THAT IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN APPEAL BY THE DEPARTMENT IN ASSESSMENT YEAR 2012 - 13. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. THE SOLITARY ISSUE RAISED IN APPEAL BY THE DEPARTMENT IS AGAINST DELETING THE ADDITION OF RETENTION MONEY. WE FIND THAT THIS ISSUE IS RECURRING IN NATURE. 3 ITA NO . 1114/PUN/2017, A.Y. 2013 - 14 THE ASSESSING OFFICER MADE ADDITION OF RETENTION MONEY IN ASSESSMENT YEARS 2003 - 04, 2006 - 07, 2007 - 08, 2008 - 09, 2011 - 12 AND 2012 - 13. THE TRIBUNAL HAS BEEN CONSISTENTLY DELETED THE ADDITI ON IN THE HANDS OF ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE IMPUGNED ORDER HAS DELETED THE ADDITION BY FOLLOWING THE ORDER OF TRIBUNAL IN PRECEDING ASSESSMENT YEAR. THE LD. AR HAS PLACED BEFORE US A COPY OF THE ORDER PASSED BY THE CO - ORD INATE BENCH OF TRIBUNAL IN THE APPEAL FILED BY THE DEPARTMENT IN ITA NO. 2771/PUN/2016 FOR ASSESSMENT YEAR 2012 - 13 DECIDED ON 07 - 09 - 2018. WE OBSERVE THAT THE REVENUE IN PRESENT APPEAL HAS RAISED IDENTICAL GROUND AS WERE RAISED IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. THE CO - ORDINATE BENCH DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY OBSERVING AS UNDER : 5. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE SOLITARY ISSUE RAISED IN PRESENT APPEAL BY THE REVENUE IS AGAINST DELETING ADDITION OF RETENTION MONEY. WE FIND THAT THIS ISSUE IS RECURRING SINCE ASSESSMENT YEAR 2003 - 04. THE TRIBUNAL FOR THE FIRST TIME IN BUNCH OF APPEALS IN ASSESSEES OWN CASE IN ITA NOS.727 TO 730/PN/2012(SUP RA.) AFTER CONSIDERING THE ASSESSEES CLAIM, IN PRINCIPLE DIRECTED FOR EXCLUSION OF RETENTION MONEY SUBJECT TO VERIFICATION OF QUANTUM. THEREAFTER, THE TRIBUNAL IN APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 11 (ITA NO.1146/PM/2014) & ASSESSMENT YEAR 2 011 - 12 (ITA NO.1330/PUN/2015) HAS TAKEN A CONSISTENT VIEW IN DELETING THE ADDITION SUBJECT TO VERIFICATION IN SIMILAR TERMS. FOR THE SAKE OF COMPLETENESS, THE RELEVANT EXTRACT OF THE FINDINGS OF THE TRIBUNAL IN ITA NO.727 TO 730/PN/2010(SUPRA) ARE REPRODUC ED HEREIN BELOW: 25. IN SO FAR AS THE MERITS OF THE CLAIM IS CONCERNED, NO DOUBT IN PRINCIPLE THE SAME IS COVERED BY THE RATIO OF THE JUDGEMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CABLES P. LTD. (SUPRA). THE ASSESSEE HAS ALSO FURNISHED THE YEAR - WISE WORKING OF THE CLAIM OF EXCLUDING INCOME ON ACCOUNT OF RETENTION MONEY FOR THE ASSESSMENT YEARS IN QUESTION. SUCH DETAILS ARE PLACED IN THE PAPER BOOK FILED BEFORE US AND IT HAS BEEN ASSERTED THAT THE SAME WAS ALSO AVAILABLE ON THE RECORD OF THE AUTHORITIES BELOW. OSTENSIBLY, THE ASSESSING OFFICER AS WELL THE CIT(A) HAVE NOT EXAMINED THE MERITS OF THE CLAIM BECAUSE THE SAME WAS REJECTED AT THE THRESHOLD ITSELF. AT THE TIME OF HEARING, THE APPELLANT HAS PREFERRED ADDITIONAL GROUNDS OF APPEAL RE - QUANTIFYING THE CLAIM FOR ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 IN THE EVENT OF SIMILAR CLAIMS NOT BEING FOUND EXIGIBLE FOR ASSESSMENT YEARS 2003 - 04 AND 2006 - 07. IN ORDER TO ENABLE THE ASSESSING OFFICER TO VERIFY THE WORKINGS OF THE CLAIM FOR ASS ESSMENT YEARS 2007 - 08 AND 2008 - 09, WE RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER . THE ASSESSING OFF I CER SHALL E X AMINE THE WORKING OF THE CLAIM MADE BY THE ASSESSEE , INCLUDING THE REVISED WORKINGS CONSEQUENT TO NON - ADMISSION OF SIMI L AR C L A IM F OR ASSESSMENT YEARS 2003 - 04 AND 2006 - 07 , AND THEREAFTER ALLOW THE APPROPRIATE CLAIM AS PER LAW . NEEDLESS TO SAY , THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A R EASONABLE OPPORTUNITY OF FURNISH I NG APPROPRIATE DETA I LS IN SUPPORT OF THE CLA I M AND ONLY THEREAFTE R THE ASSESSING OFFICER SHALL ADJUDICATE IT AS PER LAW AND RE - COMPUTE THE TOTAL I NCOME ACCORD I NG L Y F OR THE ASSESSMENT YEARS 2007 - 08 AND 2008 - 09. 4 ITA NO . 1114/PUN/2017, A.Y. 2013 - 14 THE ISSUE HAS BEEN LAID TO REST BY THE TRIBUNAL HOLDING EXCLUSION OF RETENTION MONEY AND THE REVENUE HAS NOT BROUGHT ON RECORD ANY CONTRARY DECISION. THUS, IN THE LIGHT OF THE ORDERS OF TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS, WE UPHOLD THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND DISMISS THE GROUNDS RAISED BY THE REVENUE. 6. SINCE, NO NEW FACT HAS BEEN BROUGHT ON RECORD BY THE DEPARTMENT, WE FIND NO REASON TO TAKE A DIFFERENT VIEW. THE APPEAL OF REVENUE IS DISMISSED FOR THE PARITY OF REASONS GIVEN BY THE CO - ORDINATE BENCH WHILE DECIDING THE APPEAL OF REVENUE IN ASSESSMENT YEAR 2012 - 13. 7. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSED. O RDER PRONOUNCED ON THURSDAY, THE 01 ST DAY OF AUGUST, 2019. SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 01 ST AUGUST, 2019. RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 1 , PUNE 4. THE PR. CIT - 1, PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE