Enmas GB Power System Projects Ltd., CHENNAI V. DCIT, CHENNAI

ITA 1166/CHNY/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1447 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 29-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: N ARJUN RAJ CA MR S SRIDHAR
• Section: 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , ! . , ! & BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.1166/CHNY/2016 /ASSESSMENT YEAR: 2011-12 M/S.ENMAS GB POWER SYSTEM - PROJECTS LTD., NO.443, IV FLOOR, GUNA BUILDING MAIN, ANNA SALAI, TEYNAMPET, CHENNAI-600 018. [PAN: AAACE 1267 G] VS. THE DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-II(1), CHENNAI. ( ( /APPELLANT) ( )*( /RESPONDENT) ( + / APPELLANT BY : MR.N.ARJUN RAJ, CA FOR MR.S.SRIDHAR, ADV. )*( + /RESPONDENT BY : MR. AR.V.SREENIVASAN, JCIT + /DATE OF HEARING : 10.06.2019 + /DATE OF PRONOUNCEMENT : 10.06.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI, IN ITA NO.102/CIT(A)- 6/2014-15 DATED 11.03.2016 FOR THE AY 2011-12. 2. SHRI AR.V.SREENIVASAN, JCIT, REPRESENTED ON BEHA LF OF THE REVENUE AND SHRI N.ARJUN RAJ, CA FOR MR.S.SRIDHAR, ADV., R EPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.1166/CHNY/2016 :- 2 -: 3. THE LD.AR FILED A PETITION FOR ADJOURNMENT ON TH E GROUND THAT HE IS UNDER THE PROCESS OF OBTAINING ADDITIONAL DETAILS F ROM THE INSTRUCTING CHARTERED ACCOUNTANTS. A PERUSAL OF THE FACTS CLEA RLY SHOWS THAT THE APPEAL WAS PRESENTED BY HAND ON 29.04.2016 AND HAS BEEN POSTED FOR HEARING ON VARIOUS DATES BEING IN 2016 ON 04 TH JULY, 10 TH AUGUST, 10 TH NOVEMBER, IN 2017 ON 23 RD JANUARY, 25 TH JANUARY, 14 TH MARCH, 03 RD MAY, 08 TH JUNE, 14 TH AUGUST, 23 RD OCTOBER, 28 TH DECEMBER, IN 2018 ON 08 TH FEBRUARY, 01 ST MARCH, 12 TH APRIL, 23 RD MAY, 10 TH JULY, 26 TH SEPTEMBER, 27 TH DECEMBER AND IN 2019 ON 28 TH MARCH AND NOW ON 10 TH JUNE. ON ALL THE DATES, THE ADJOURNMENT WAS SOUGHT FOR ON BEHALF OF THE ASSESSEE AND THE REASON GIVEN CONTINUOUS TO BE THE SAME IN THE PROC ESS OF OBTAINING ADDITIONAL DETAILS FROM THE INSTRUCTING CHARTERED A CCOUNTANTS TO SUPPORT THEIR STAND. AS SUBSTANTIAL OPPORTUNITIES HAVE BEE N GIVEN AND THE ASSESSEE IS NOT MAKING ANY ATTEMPT TO REPRESENT ITS APPEAL, THE ADJOURNMENT SOUGHT FOR IS REJECTED AND THE APPEAL I S DISPOSED OFF ON MERITS. 4. THE LD.AR WAS REQUESTED TO SUBSTANTIATE ITS APPE AL. IT WAS SUBMITTED BY THE LD.AR THAT THE ISSUE IN THE APPEAL WAS IN RESPECT OF THE LOSS ON CONTRACTS TO THE EXTENT OF RS.8,83,814/-. IT WAS A SUBMISSION THAT THE LOSS WAS ASCERTAINED LOSS AND THE SAME WAS ALLO WABLE IN VIEW OF THE ACCOUNTING STANDARD-7. ITA NO.1166/CHNY/2016 :- 3 -: 5. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE LD.CIT(A). HE RELIED UPON THE ORDER OF THE LD. CIT(A) IN PARA NO.5.3, WHEREIN, THE LD.CIT(A) HAS FOLLOWED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S.ROTORK CONTROLS INDIA P. L TD., REPORTED IN 314 ITR 62 (SC). IT WAS A SUBMISSION THAT THE ASSESSEE HAS NOT DEMONSTRATED BEFORE THE AO OR BEFORE THE LD.CIT(A) THAT THE IMPU GNED PROVISIONS FOR THE LOSS IN RESPECT OF THE CONTRACT WAS CREATED ON A SCIENTIFIC AND ASCERTAINED BASIS. IT WAS A SUBMISSION THAT NO DET AILS HAVE BEEN PRODUCED BEFORE THE AO, BEFORE THE LD.CIT(A) OR BEF ORE THE TRIBUNAL. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 7. A PERUSAL OF THE ORDER OF THE LD.CIT(A) CLEARLY SHOWS THAT THE LD.CIT(A) HAS FOLLOWED THE BINDING DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S.ROTORK CONTROLS INDIA P. LTD. T HE CLAIM OF THE ASSESSEE THAT HE WANTS TO PRODUCE THE DETAILS TO SUBSTANTIAT E THE CLAIM OF THE LOSS COMPUTED IN RESPECT OF THE CONTRACTS AND THE PROVIS IONS MADE THEREIN CANNOT BE ACCEDED TO, ALSO BECAUSE NO EVIDENCE HAVE BEEN PRODUCED BEFORE THE AO OR BEFORE THE LD.CIT(A) OR BEFORE THE TRIBUNAL. THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN AS TO HOW THI S PROVISION FOR LOSS ON THE CONTRACT HAS BEEN DETERMINED AT RS.8,53,814/-. WHETHER IT IS A PERCENTAGE OF THE TOTAL CONTRACT OR WHETHER IT IS B ASED ON THE PERCENTAGE OBTAINED ON THE BASIS OF THE LOSS MADE IN THE EARLI ER YEARS OR WHETHER IT IS ON THE BASIS OF ANY GUIDELINE METHOD PRESCRIBED. P RIMARILY RELYING ON ITA NO.1166/CHNY/2016 :- 4 -: ACCOUNTING STANDARD-7 WOULD NOT SUBSTANTIATE THE PR OVISION. THIS BEING SO, RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF M/S.ROTORK CONTROLS INDIA P. LTD., AS HAS B EEN FOLLOWED BY THE LD.CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE LD.CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 10 TH DAY OF JUNE, 2019, IN CHENNAI. SD/- SD/- ( . ) ( S. JAYARAMAN ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER /CHENNAI, 2 /DATED: 10 TH JUNE, 2019. TLN + )34 54 /COPY TO: 1. ( /APPELLANT 4. 6 /CIT 2. )*( /RESPONDENT 5. 4 ) /DR 3. 6 ( ) /CIT(A) 6. /GF