National Projects Construction Ltd., New Delhi V. ACIT (OSD), New Delhi

ITA 1152/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3353 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 28-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 43B; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. AMIT SHUKLA , JM IT A NO.1 152 /DEL/201 4 ASS ESSMENT YEAR : 200 8 - 09 NATIONAL PROJECTS CONS TRUCTION CORPORATION LIMITED, 30 31, RAJA HOUSE, NEHRU PLACE, NEW DELHI 110 019. PAN NO. AAACR6117Q VS ACIT (OSD) CIT - V , NEW DELHI. (APPELLANT) (RESPONDENT) ITA NO. 735 /DEL/2014 ASSESSMENT YEAR : 2008 - 09 ACIT, CIRCLE 13 (1), NEW DELHI. VS NATIONAL PROJECTS CONSTRUCTION CORPORATION LIMITED, 30 31, RAJA HOUSE, NEHRU PLACE, NEW DELHI 110 019. PAN NO. AAACR6117Q (APPELLANT) (RESPONDENT) CO NO.264/DEL/2014 (IN ITA NO. 735 /DEL/ 201 4) ASSESSMENT YEAR : 2008 - 09 NATIONAL PROJECTS CONSTRUCTION CORPORATION LIMITED, 30 31, RAJA HOUSE, NEHRU PLACE, NEW DELHI 110 019. PAN NO. AAACR6117Q VS ACIT (OSD) CIT - V , NEW DEL HI. (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA, ADVOCATE AND SHRI SOMIL AGGARWAL, ADVOCATE REVENUE BY : SH RI H.K. CHOUDHARY, CIT DR DATE OF HEARING : 1 8 .0 4 .201 7 DATE OF PRONOUNCE MENT : 27 .04 . 201 7 ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 2 ORDER PER N. K. SAINI, AM : THE APPEAL & THE CROSS OBJECTION FILED BY THE ASSESSEE AND THE APPEAL FILED BY THE DEPARTMENT ARE DIRECTED AGAINST THE ORDER DATED 18.11.2013 OF THE LD. CIT (A) - XVI, DELHI. 2. IN THE ASSESSEE S APP EAL IN ITA NO. 1152/DEL/2014 , THE FOL LOWING GROUNDS HAVE BEEN RAISED : - 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS.3,66,61,812/ - ON ACCOUNT OF SUB CONTRACT WORK. 3. THAT IN ANY CASE AND IN ANY VIEW OF MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS.3,66,61,812/ - ON ACCOUNT OF SUB CONTRACT WORK, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMST ANCES OF THE CASE. 3. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. FROM THE AFORESAID GROUNDS, IT WOULD BE CLE AR THAT THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATION OF ADDITION OF RS.3,66,61,812/ - MADE BY THE AO ON ACCOUNT OF SUB - CONTRACT WORK. ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 3 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.2009 SHOWIN G NIL INCOME BUT ALSO SHOWING CURRENT YEAR S LOSS AT RS.24,51,69,394/ - WHICH WAS REVISED ON 05.02.2009 AND THE LOSS OF RS.21,72,34,449/ - WAS DECLARED. THE SAID RETURN W AS PROCESSED UNDER SECTION 143(1) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE FURNISHED UNIT - WISE AUDIT REPORT WHIC H REVEALED THAT THE ASSESSEE HAD MADE SUB - CONTRACT WORK PROVISION OF RS.3,66,6 1,812/ - AS PER ANNEXURE C OF THE RANCHI WORKS UNIT FOR THE ASSESSMENT YEAR 2007 - 08 BUT DID NOT DEDUCT WHILE COMPUTING THE TAXABLE INCOME FOR THE ASSESSMENT YEAR 2008 - 09. THE AO ASKED THE ASSESSEE TO FILE THE DETAILS OF PROVISIONS OF SUB - CONTRACT WORK OF RANCHI UNIT AND AS TO HOW IT WAS ALLOWABLE. THE AO POINTED OUT THAT THE ASSESSEE FAILED TO FURNISH ANY DETAIL. HE, THEREFORE, DISALLOWED THE SAID AMOUNT OF RS.3,66,61,812/ - AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 5. BEING AGGRIEVED THE ASSESS EE CARRIED THE MATTER TO THE LD. CIT (A) AND SUBMITTED THAT THE IMPUGNED DISALLOWANCE WAS MADE BY THE AO BY ASSUMING THAT IT WAS MERE A PROVISION AND DID NOT RELATE TO ANY LIABILITY. IT WAS FURTHER SUBMITTED THAT THE PROJECT WAS UNDER CONSTRUCTION AT RANC HI WORKS UNIT WHICH WAS GIVEN ON SUB - CONTRACT ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 4 DURING THE YEAR UNDER CONSTRUCTION AND THE BILL OF THE SAME WAS SUBMITTED BY THE CONTRACTOR ON POST BALANCE SHEET DATE AND THAT THE ACTUAL FIGURE OF WORK DONE UP TO 31.03.2008 HAD BEEN CREDITED FOR LIABILITY OF THE CONTRACTOR BY DEBITING THE COST OF PROJECT UNDER CONSTRUCTION AT RANCHI WORKS UNIT THEREBY SHOWING AN INCREASED VALUE OF PROJECT UNDER CONSTRUCTION IN THE CLOSING STOCK IN THE BALANCE SHEET. IT WAS FURTHER SUBMITTED THAT THE SAID LIABILITY AS INCURRE D IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND WAS NOT IN THE NATURE OF CAPITAL OR PERSONAL ACCOUNT RATHER THE SAME WAS INCURRED IN THE NORMAL COURSE OF BUSINESS OF THE ASSESSEE AND THAT THE SAID LIABILITY HAD BEEN ADDED TO THE STOCK (BUSINESS ASSETS) OF THE ASSESSEE, THEREFORE, THE DISALLOWANCE BY ASSUMING AND IGNORING THE FACTS AND SUBMISSIONS OF THE ASSESSEE WAS LIABLE T O BE DELETED. THE ASSESSEE ALSO FURNISHED THE ADDITIONAL EVIDENCES UNDER RULE 46A OF THE INCOME - TAX RUL ES, 1962 (HEREINAFTER REFERRED TO AS THE RULES ). THE LD. CIT (A) FORWARDED THE ADDITIONAL EVIDENCES TO THE AO BY OBSERVING THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ASKED FOR MORE TIME BUT THE AO ALLOWED TIME UP TO 30.11.2010 AND TH E ASSESSEE COULD NOT FURNISH SINCE THE PROJECTS AND BUSINESS ACTIVITIES OF THE ASSESSEE WERE SPREAD OVER THROUGHOUT INDIA WHICH WAS MANAGED BY APPROXIMATELY 175 BRANCHES /UNITS AND THE REGISTERED OFFICE IN DELHI , THEREFORE, COLLECTION ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 5 INFORMATION S FROM DIFF ERENCE BRANCHES SPREAD OVER DIFFERENT PARTS OF INDIA WILL NATURALLY TAKE SOME TIME. 6. THE LD. CIT (A) ADMITTED THOSE ADDITIONAL EVIDENCES UNDER RULE 46A (2) OF THE RULES. HOWEVER, THERE WAS NO RESPONSE FROM THE AO. THE LD. CIT (A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, SUSTAINED THE DISALLOWANCE BY OBSERVING IN PARA 5.4.2 IN THE IMPU GNED ORDER WHICH READS AS UNDER : - 5.4.2 THE ABOVE AMOUNTS WERE INCLUDED UNDER THE HEAD CONSTRUCTION & WORK EXPENSES AND DEBITED IN THE P&L ACCOUNT UNDER SCHE DULE J. FROM THE TRANSFER VOUCHER OF THE RANCHI WORKS UNIT AND RESPECTIVE DETAILS IT IS OBSERVED THAT THE ABOVE LIABILITY WAS DEBITED AGAINST PROVISION FOR EXPENSES ON WORKS. THEREFORE, IT IS CLEAR THAT THE LIABILITY DID NOT CRYSTALLIZE DURING THE PREVIOUS YEAR RELEVANT TO A Y 2008 - 09. IN VIEW OF THE ABOVE, THE ABOVE LIABILITY BEING A PROVISION ONLY BEING DEBITED IN THE P&L ACCOUNT, THEREFORE, THE SAME SHOULD HAVE BEEN ADDED BACK IN THE COMPUTATION OF TAXABLE INCOME. SINCE, THE SAID AMOUNT WAS NOT ADDED BA CK BEING PROVISION, THEREFORE, THE AO IS JUSTIFIED IN MAKING THE SAID ADDITION. THE APPEAL FAILS IN THIS GROUND. 7. NOW, THE ASSESSEE IS IN APPEAL. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE DETAILS WERE FURNISHED BEFORE THE LD. CTI (A) WHO ASKED THE REMAND REPORT ON THE ADDITIONAL EVIDENCES BUT THE AO DID NOT COMMENT ON THE EVIDENCES. IT WAS FURTHER SUBMITTED THAT ACTUAL FIGURE OF THE WORK DONE UP TO 31.03.2008 HAD BEEN CREDITED FOR LIABILITY OF THE CONTRACTOR ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 6 BY DEBITING TO THE COST OF PROJECT UNDER CONSTRUCTION AT RANCHI WORKS UNIT THEREBY SHOWING AN INCREASED VALUE OF PROJECT UNDER CONSTRUCTION/CLOSING VALUE OF THE ASSETS IN THE BALANCE SHEET. A REFERENCE WAS MADE TO PAGE NO.12 OF THE ASSESSEE S PAPER BOOK WHICH IS A COPY OF THE LETT ER DATED 04.01.2011 OF DEPUTY MANAGER (FINANCE) WHEREIN IT WAS STATED THAT NET PROVISION OF RS.3,66,61,812/ - HAD TO BE CREATED AGAINST THE BILLS SUBMITTED FOR PAYMENT TO THE SUB - CONTRACTORS ON RECEIPT OF THE PAYMENTS FROM THE DEPARTMENTS AGAINST THE BILLS SUBMITTED AT THAT TIME AND THAT ALL THE LIABILITIES AGAINST THE SAID PROVISIONS HAD ALREADY BEEN CLEARED AFTER RECEIPT OF THE PAYMENTS AGAINST THE VALUE OF WORK DONE (VWD) SUSPEN S E ACCOUNT 2007 - 08 . A REFERENCE WAS MADE TO PAGE NO. 14 OF THE ASSESSEE S PAP ER BOOK WHEREIN GROSS VALUE OF VWD / SUSPENSE HAS BEEN MENTIONED , OUT OF WHICH CORPORATION MARGIN AND PROVISION SHOWN IN THE FINANCIAL YEAR 2006 - 07 AS WELL AS THE NET PROVISIONS HAS BEEN SHOWN. IT WAS SUBMITTED THAT THE GROSS AMOUNT WAS CREDITED IN THE PROF IT & LOSS ACCOUNT AND THE AMOUNT OF NET PROVISION WAS INCLUDED IN THE SAID OVERALL GROSS VWD ON WHICH TAX HAD BEEN PAID BUT NEITHER THE AO NOR THE LD. CIT (A) APPRECIATED THE FACTS IN RIGHT PERSPECTIVE. IN HIS RIVAL SUBMISSIONS, THE LD. DR SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 7 PRESENT CASE, IT APPEARS THAT THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT (A) WERE NOT AVAILABLE TO THE AO, THEREFORE, HE HAD NO OCCASION TO EXAMINE THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE SAID ADDITIONAL EVIDENCES WERE FORWARDED TO THE AO FOR HIS COMMENTS BY THE LD. CIT(A) BUT AO DID NOT COMMENT AND FURNISH THE REMAND REPORT. THE LD. CIT (A) ALSO DID NOT APPRECIATE THE FACTS IN THE RIGHT PERSPECTIVE , PARTICULARLY THIS SUBMISSION OF THE ASSESSEE THAT THE NET PROVISION SHOWN WAS ALREADY INCLUDED IN THE GROSS VALUE OF VWD WHICH WAS CREDITED IN THE P ROFIT AND LOSS ACCOUNT. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, DEEM IT PROPER TO REMAND THIS ISSUE BACK TO THE FILE OF THE AO FOR RE - ADJUDICATION AFTER CONSIDERING THE RECONCILIATION STATEMENT FURNISHED BY THE ASSESSEE, COPY OF WHICH IS PLA CED AT PAGE NO.18 OF THE ASSESSEE S PAPER BOOK, AND TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. AS REGARDS TO THE CROSS OBJECTION NO. 264/DEL/2014 , THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT HE HAS THE INSTRUCTION NOT TO PRESS THE SAME AND GAVE IN WRITING AS UNDER : - CROSS OBJECTION NOT PRESSED. SD/ - ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 8 IN VIEW OF THE ABOVE, THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED . 11. IN THE DEPART MENT S APPEAL IN ITA NO. 735/DEL/2014 , FOLLOWING GROUNDS HAVE BEEN RAISED: - 1. ON THE FACTS & IN THE CIRC UMSTANCES OF THE CASE, THE LD. C IT (A) HAS ERRED IN RE DUCING THE DISALLOWANCE U/S 40 ( A ) (IA) OF THE ACT FROM RS.20,69,74,740/ - TO RS.1,11,83,140/ - . 1 .1 ON THE FACTS & IN THE CIRCU MSTANCES OF THE CASE, THE LD. CI T (A) HAS ERRED IN REDUCING THE DISALLOWANCE U/S 40 ( A ) (IA) BY ACCEPTING THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE DURING APPELLATE PROCEEDINGS AND NOT APPRECIATING THE FACT THAT THE ASS ESSEE WAS PROVIDED MANY OPPORTUNITIES TO FURNISH ITS REPLY AND EVIDENCES. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. C I T (A) HAS ERRED IN REDUCING THE DISALLOWANCE U/S 43B OF THE ACT FROM RS.23,06,980/ - TO RS.56,037/ - BY IGNORING THE FAC T THAT THE DISCREPANCY WAS POINTED OUT BY THE AO FROM THE AUDITED ACCOUNTS/ TAX AUDIT REPORT OF THE REGISTERED AUDITOR OF THE ASSESSEE LEADS TO THE IMPLICATION THAT EITHER THE ASSESSEE OR THE AUDITOR HAS PROVIDED THE WRONG FIGURES/FACTS. 2.1 ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. C IT (A) HAS ERRED IN HOLDING THAT OTHER TAX LIABILITY OF RS.7,29,982/ - BEING RELATED TO EARLIER YEARS AND OUTSTANDING IN THE YEAR UNDER CONSIDERATION CANNOT ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 9 BE DISALLOWED U/S 43B BY IGNORING THE PROVISION OF SEC TION 43B ( A) OF THE ACT. 2.2 ON THE FACTS & IN THE CIRCUMSTANC ES OF THE CASE, THE LD. CI T (A) HAS ERRED IN HOLDING THAT AMOUNT OF RS.14,41,770/ - BEING BROUGHT FORWARD FROM EARLIER YEARS AND OUTSTANDING IN THE YEAR UNDER CONSIDERATION CANNOT BE DISALLOWED U/S 43B OF THE ACT BY IGNORING THE PROVISION OF SECTION 43B ( A) OF THE ACT WHICH DEARLY POINTS OUT THAT 'IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED BY THE ASSESSEE ACCORDING TO THE METHOD OF ACCOUNTING REGULARLY E MPLOYED BY HIM. 12. VIDE GROUNDS NO.1 & 1.1, THE GRIEVANCE OF THE DEPARTMENT RELATES TO THE REDUCTION IN DISALLOWANCE U/S 40 ( A ) (IA) OF THE ACT FROM RS.20,69,74,740/ - TO RS.1,11,83,140/ - . 13. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE AO DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TDS @ 1% ON ACCOUNT OF SUB - CONTRACT WORK EXPENSES AS PER THE PROVISIONS OF SECTION 194C OF THE ACT AND THE QUANTUM OF SUB - CONTRACT EXPENSES WORKED OUT TO RS.20,12,78,3 00/ - THEREON TDS OF RS.20,12,783/ - WAS NOT DEPOSITED TO THE GOVERNMENT ACCOUNT. HE ALSO NOTICED THAT THE ASSESSEE FAILED TO DEDUCT / DEPOSIT TDS ON THE EXPENSES OF RS.56,96,440/ - INCURRED DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CON SIDERATION. HE ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 10 DISALLOWED TOTAL EXPENSES OF RS.20,69,74,740/ - (RS.56,96,440/ - + RS.20,12,78,300/ - ) U/S 40A(IA) OF THE ACT. 14. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT (A) AND SUBMITTED THAT OUT OF TOTAL TDS OF RS.20,12,783/ - TAKEN INTO ACCOUNT BY THE AO, A SUM OF RS.13,78,183/ - PERTAINED TO EARLIER YEARS, THEREFORE, NO DISALLOWANCE COULD HAVE BEEN MADE IN RESPECT OF TDS FIGURES WHICH HAVE BEEN BROUGHT FORWARD FROM EARLIER YEARS. IT WAS FURTHER SUBMITTED THAT A SUM OF RS.4,07,901/ - , WHICH WAS DEDUCTED DURING THE YEAR, WAS DEPOSITED IN GOVERNMENT ACCOUNT BEFORE THE DUE DATE OF FILING THE INCOME - TAX RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THEREFORE, NO DISALLOWANCE COULD HAVE BEEN MADE ON THIS ACCOUNT . 15. THE LD. CIT ( A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE SUSTAINED THE DISALLOWANCE OF RS.1,11,83,140/ - BY OBSERVING IN PARA 5.2.4 OF THE IMPUGNED ORDER WHICH READS AS UNDER : - 5.2.4 IT IS ALSO EVIDENT FROM THE REPLIES SENT BY THE JALPAIGURI UNIT THAT THE SUM OF RS.61,602/ - (TRB) HAS BEEN WRONGLY REPORTED BY THE AUDITOR AS TDS NOT DEPOSITED. SIMILARLY, FROM THE REPLIES SENT BY THE UNITS IT IS SEEN THAT RS.81,716: KOPILI AND RS. 1,529: KARBILANGI IS MORE THAN 15 YEARS OLD. HOWEVER, NO EXPLANATION OR REPLY IS AV AILABLE IN RESPECT O F TDS OF RS. 54,867: DURGAPUR. THEREFORE, DI SALLOWANCE OF ONLY RS.54,86,700/ - IS JUSTIFIED ON ACCOUNT OF NON DEPOSIT OF TDS OF RS. 54,867/ - (DURGAPUR). IN VIEW OF THE ABOVE ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 11 THE DISALLOWANCE OF SUB - CONTRACT EXPENSES OF RS. 20,12,78,300/ - MADE BY THE AO U/S 40 ( A ) (IA) ON ACCOUNT OF NON - DEPOSIT OF TDS IS REDUCED TO RS. 54,86,700/ - . THE AO IS HOWEVER DIRECTED TO VERIFY WHETHER ABOVE TDS OF RS.4,07,901/ - WERE DEPOSITED IN GOVERNMENT ACCOUNT BEFORE THE DUE DATE OF FILING OF IT RETURN FOR A.Y 20 08 - 09. REGARDING THE DISALLOWANCE OF RS.56,96,440/ - MADE BY THE AO U/S 40(A)(IA), NO SUBMISSION HAVE BEEN MADE AND THE SAME WA S ALSO NOT PRESSED FOR BY THE A/ R. THEREFORE, NO ADJUDICATION IS CALLED FOR ON THIS DISALLOWANCE. IN VIEW OF THE ABOVE, THE DISALL OWANCE MADE BY THE AO IS REDUCED FROM RS.20,69,74,740/ - TO RS.1,11,83,140/ - SUBJECT TO CORRECTNESS OF THE CLAIM THAT THE TDS WERE DEPOSITED BEFORE THE DUE DATE OF RETURN. 16 . NOW, THE DEPARTMENT IS IN APPEAL. 17 . THE LD. DR SUPPORTED THE ORDER OF THE A O AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT (A) AND STRONGLY SUPPORTED THE IMPUGNED ORDER. 18 . WE HAVE CONSIDERED THE SUBMIS SIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT APPEARS THAT LD. CIT (A) AFTER PROPER VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE CAME TO THE CONCLUSION THAT THE ASSESSEE COULD NOT E XPLAIN THE DEPOSIT OF TDS OF RS.54,867/ - IN RESPECT OF DURGAPUR UNIT , SO DISALLOWANCE OF RS. 54,86,700/ - WAS ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 12 JUSTIFIED ON ACCOUNT OF NON - DEPOSIT OF TDS. HE ALSO OBSERVED THAT THE ASSESSEE DID NOT PRESS FOR DISALLOWANCE OF RS.56,96,440/ - . IN OUR OPINION, T HE LD. CIT (A) WAS JUSTIFIED IN SUSTAINING THE DISALLOWANCE TO THE EXTENT OF RS.1,11,83,140/ - (RS.54,86,700/ - + RS.56,96,440/ - ) . THE LD. CIT (A) ALSO DIRECTED THE AO TO VERIFY AS TO WHETHER TDS OF RS.4,07,901/ - WAS DEPOSITED IN THE GOVERNMENT ACCOUNT BEFO RE THE DUE DATE OF THE FILING OF THE RETURN. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS GIVEN BY THE LD. CIT (A) ON THIS ISSUE IN THE IMPUGNED ORDER. ACCORDINGLY, WE DO NOT SEE MERIT I N THIS GROUND OF THE DEPARTMENT. 1 9 . THE NEXT ISSUE VIDE GRO UND NO.2 TO 2.2 RELATES TO THE R EDUCTION OF DISALLOWANCE U/S 43B OF THE ACT OF RS.23,06,980/ - TO RS.56,037/ - . 20 . THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE AO DURING THE COURSE OF AS SESSMENT PROCEEDINGS NOTICED THAT THE NOTES ON ACCOUNTS OF ANNUAL REPORT FURNISHED BY THE ASSESSEE REVEALED THAT AN AMOUNT OF RS.20,12,783/ - WAS PERTAINING TO INCOME - TAX OUT OF THE TOTAL TAX LIABILITY OF RS.43,19,763/ - . HE DISALLOWED A SUM OF RS.23,06,980 / - (RS.43,19,763/ - - RS.20,12,783/ - ) ON ACCOUNT OF UNPAID OTHER TAX LIABILITY U/S 43B OF THE ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 13 21 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT (A) AND SUBMITTED THAT THE TAX LIABILI TY OF RS.9,192/ - NCR, NOIDA WAS MORE THAN 10 YEARS OLD , RS.3,29,013/ - RAURKELA PERTAINED TO FY 1994 - 95, RS.3,45,203/ - RAURKELA PERTAINED TO FY 1999 - 00, RS.26,981 / - TRB WAS WRONG REPORTING, THEREFORE, THE ABOVE OTHER TAX LIABILITIES AMOUNTING TO RS.7,29,982 / - WAS RELATING TO EARLIER YEARS AND WAS NOT REQUIRED TO BE CONSIDERED FOR DISALLOWANCE U/S 43B OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE TAX LIABILITY OF RS.48,130/ - AND RS.624/ - OF DOT CRPF, RS.624/ - PASSIGHAT AND RS.27,169/ - RAIPUR ZONAL OFFICE WE RE DEPOSITED BEFORE THE DUE DATE OF FILING THE RETURN, THEREFORE, THE ABOVE AMOUNT OF RS.76,547/ - BEING DEPOSITED BEFORE THE DUE DATE OF FILING THE RETURN SHOULD NOT HAVE BEEN DISALLOWED. IT WAS FURTHER SUBMITTED THAT A SUM OF RS.14,41,770/ - HAD BEEN BROU GHT FORWARD FROM THE EARLIER YEARS AS WAS EVIDENT FROM THE ANNUAL REPORT FOR THE FY 2006 - 07 RELEVANT TO AY 2007 - 08. THE LD. CIT (A) ACCEPTED THE AFOREMENTIONED CONTENTION OF THE ASSESSEE. AS REGARDS TO THE REMAINING AMOUNT OF RS. 56,037/ - COMPRISING OF RS .45,180/ - RAILWAYS AND RS.10,857/ - PASSIGHAT WHICH WERE DEPOSITED AFTER DUE DATE OF FILING THE RETURN, THE LD. CIT (A) SUSTAINED THE SAID DISALLOWANCE. 22 . NOW, THE DEPARTMENT IS IN APPEAL. ITA NO .1 1 52 /DEL/2014 ITA NO.735/DEL/2014 CO NO.264/DEL/2014 14 23 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND C AREFULLY PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE LD. CIT (A), AFTER PROPER VERIFICATION, ACCEPTED THE CLAIM OF THE ASSESSEE , THE LD. DR COULD NOT REBUT THE AFORESAID FINDINGS OF THE LD. CIT (A). WE, THEREFORE, D O NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS GIVEN BY THE LD. CIT (A). ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENT S APPEAL. 24 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE DEPARTMENT AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27 /0 4 /2017) SD/ - SD/ - (AMIT SHUKLA ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 /04 /2017 SUBODH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR