DCIT, Circle - 10, Kolkata V. M/s. Ober Construction Enterprises (P) Ltd., Kolkata

ITA 1198/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2519 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 29-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 15-07-2009
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: C DUTTA
• Keywords: TDS; Set aside
• Section: 133(6)

Judgement Text

, A , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA () BEFORE . . . . . . . . , , , , , !' !' !' !' /AND . .. . . .. .! !! !, , , , # [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI C. D. RAO , AM] '$ '$ '$ '$ / ITA NO. 1198 /KOL/2009 %&' !() %&' !() %&' !() %&' !()/ // / ASSESSMENT YEAR : 2005-06 DEPUTY COMMISSIONER OF INCOME-TAX, -VS- M/S. OBER CONSTRUCTION ENTERPRISES (P) CIRCLE-10, KOLKATA LTD. (PA NO. AAACO 2863 N) (+, / APPELLANT ) (-+,/ RESPONDENT ) !' !' !' !' /AND C.O. NO.58/KOL/2009 IN '$ '$ '$ '$ / ITA NO. 1198 /KOL/2009 %&' !() %&' !() %&' !() %&' !()/ // / ASSESSMENT YEAR : 2005-06 M/S. OBER CONSTRUCTION ENTERPRISES (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-10, KOLKATA. (CROSS OBJECTOR) (RESPONDENT) +, . / / FOR THE APPELLANT: : / SRI PIYUSH KOLHE -+, . / / FOR THE RESPONDENT : / SHRI C. DUTTA 0 / ORDER PER D. K. TYAGI, JM ( . . . . . . . . , , , , ) THIS APPEAL PREFERRED BY THE REVENUE AND THE CROSS OBJECTION PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD . CIT(A), KOLKATA DATED 25.03.2009 FOR THE ASSESSMENT YEAR 2005-06. SINCE BOTH THE APPEA L AND THE CROSS OBJECTION HAVE BEEN HEARD TOGETHER, WE DISPOSE OF THE SAME BY THIS CONS OLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP THE REVENUES APPEAL. THE REVEN UE HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, WHETHER THE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS.7,73,476/- B EING THE DIFFERENCE IN TOTAL VALUE OF WORK DONE AND SHOWN IN THE PROFIT AND LOSS ACCOUNT THOUGH THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, WHETHER LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS.32,12,150/- WHICH WAS N OT SHOWN IN THE INCOME THOUGH THE AMOUNT WAS INCLUDED IN THE BILLS RAISED BY THE ASSE SSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE ASE , WHETHER LD. CIT(A) WAS CORRECT IN TREATING THE AMOUNT OF RS.13,71,317/- AS INFRACTUOU S THOUGH THE AMOUNT WAS NOT REFLECTED IN THE ACCOUNT AS SUNDRY DEBTOR. 2 3. GROUND NO. 1 RELATES TO DELETION OF ADDITION OF RS.7,73,476/- ON ACCOUNT OF THE DIFFERENCE IN TOTAL VALUE OF WORK. BRIEFLY STATED F ACTS OF THE CASE ARE THAT THE ASSESSEE IS A CIVIL CONTRACTOR AND DURING THE YEAR UNDER CONSID ERATION IT CARRIED OUT JOBS FOR POWER GRID CORPORATION OF INDIA LTD. (PGCIL). DURING THE ASSESSMENT PROCEEDINGS, THE AO CALLED FOR INFORMATION UNDER SECTION 133(6) OF THE I. T. ACT FROM THE PGCIL REGARDING THE TOTAL VALUE OF WORK DONE BY THE ASSESSEE FOR TH EM DURING THE YEAR. FROM THE INFORMATION RECEIVED FROM PGCIL, THE AO NOTICED A D IFFERENCE OF RS.7,73,746/- BETWEEN THE VALUE OF THE WORK DISCLOSED BY THE ASSE SSEE AND THAT INFORMED BY THE PGCIL. THE AO ACCORDINGLY, ADDED THE SUM OF RS.7,7 3,746/- TO THE INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) DIRECTED THE AO TO DELETE THE ADDITION. AGGRIEVED BY THE SAID ORDER, NOW THE REVENUE IS IN APPEAL BEF ORE US. 4. AT THE TIME OF HEARING BEFORE US, THE LD. DR REL IED ON THE ORDER OF THE AO AND PRAYED BEFORE THE BENCH TO CONFIRM HIS ACTION. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE REITERATING HIS SAME SUBMISSIONS AS SUBMITTED BEFORE THE LOWER AUTHORITI ES RELIED ON THE ORDER OF THE LD. CIT(A) AND URGED BEFORE THE BENCH TO CONFIRM THE SA ME. HE ALSO CONTENDED THAT THE ABSTRACT OF EXECUTION OF CONTRACTS ALONG WITH DETAI LED CHART OF RUNNING BILLWISE AND CONTRACTEEWISE WHERE CLEARLY MENTIONED THE WORK DON E. ADVANCES RECEIPTS, OTHER RECEIPTS, OPENING DEBTORS RECEIPTS AFTER RECOVERIES PAYMENT RECEIPTS BY ACCOUNT PAYEE CHEQUES SHOWING CLOSING DEBTORS BALANCE ALSO. THE AO HAS MISCONCEIVED THE TOTAL CALCULATION AND ARRIVED AT RS.7,73,476/- ON ACCOUNT OF SUPPRESSION OF WORK DONE. HE HAS CALCULATED THE DIFFERENCE OF RS.7,73,746/- BETWEEN THE VALUE OF THE WORK DISCLOSED BY THE ASSESSEE AND THAT INFORMED BY THE PGCIL. HE, T HEREFORE, CONTENDED THAT THE ABOVE CALCULATION IS WRONG AND NEEDS TO BE RECTIFIED. HE ALSO SUBMITTED A CALCULATION AND SUBMITTED THAT FROM THE SAME IT IS CLEAR THAT THERE IS NO SUPPRESSION OF WORK AT ALL IN THE RELEVANT ASSESSMENT YEAR ON THIS ACCOUNT. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE LD. CI T(A) DELETED THE ADDITION BY OBSERVING AS UNDER : ON GOING THROUGH THE EVIDENCES, AS SUBMITTED BY TH E APPELLANT, IS SEEN THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THIS REG ARD ARE NOT SUSTAINABLE INASMUCH AS THOSE RECEIPTS BY THE APPELLANT FROM PGCIL WERE ON ACCOUNT OF OUTSTANDING DUES OF RS.3,13,407/- OF THE PREVIOUS PERIOD AND THE RECEIP TS OF RS.1,55,000/- AND RS.3,10,800/- STOOD AGAINST ALLOWABLE MATERIAL ADVANCE, BILLS AS WELL AS THE LEDGER ACCOUNT PRODUCED BEFORE ME HAVE SUBSTANTIATED THE SAME FACT. THE AS SESSING OFFICER IS, THEREFORE, DIRECTED TO DELETE THE ADDITION. 3 SINCE THE LD. DR DID NOT CONTROVERT THE ABOVE FINDI NG OF THE LD. CIT(A) BY ADDUCING ANY COGENT MATERIAL/EVIDENCE AT THE TIME OF HEARING BEFORE US, WE DO NOT SEE ANY REASON TO INTERFERE WITH HIS ORDER AND THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 7. GROUND NO. 2 RELATES TO DELETION OF ADDITION OF RS.32,12,150/- ON ACCOUNT OF SUPPRESSION OF WORK DONE UNDER THE JOB FOR NF RAILW AYS. AT THE TIME OF ASSESSMENT PROCEEDINGS THE AO CALLED FOR THE INFORMATION U/S. 133(6) FROM NF RAILWAY (NFR) REGARDING THE VALUE OF WORK DONE BY THE ASSESSEE FO R THEM DURING THE PERIOD UNDER CONSIDERATION. FROM THE INFORMATION RECEIVED THE A O OBSERVED THAT THE TOTAL BILLS SUBMITTED BY THE ASSESSEE TO NFR WERE TO THE TUNE O F RS.1,93,02,315/- AGAINST THE TOTAL AMOUNT OF RS.1,77,32,704/- DECLARED BY THE ASSESSEE . HE ACCORDINGLY, ADDED THE DIFFERENCE OF RS.32,12,158/- TO THE INCOME OF THE A SSESSEE. BEFORE THE LD. CIT(A) THE ASSESEE SUBMITTED THAT THE SAID AMOUNT OF RS.32,12, 158/- WAS MATERIAL ADVANCE RECEIVED AND IT WAS INCLUDED IN THE SUM OF RS.1,77, 32,705/- BEING THE VALUE OF THE TOTAL WORK DONE BY THE ASSESEE FOR NFR. HE ALSO DREW THE ATTENTION OF THE LD. CIT(A) TO THE BILL OF THE NFR WHEREIN THIS FACT WAS CLEARLY MENTI ONED. HE ALSO SUBMITTED BEFORE THE LD. CIT(A) THAT THE SAID BILL WAS SUBMITTED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO AT THE TIME OF HEAR ING FOR THE REMAND REPORT PURPOSES. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE AO, THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : FROM THE ABOVE IT APPEARS THAT THE AO HAS MISUNDER STOOD THE FACTS. A PERUSAL OF THE BILL OF NFR SHOWS THE TOTAL VALUE OF THE WORK DONE BY THE ASSESSEE DURING THE PERIOD UNDER CONSIDERATION WAS RS.1,77,32,705/- WHICH INCL UDED RECOVERY OF RS.72,06,170/- BEING SECURED ADVANCES. THESE FIGURES OF RS.72,06, 170/- WERE INCLUSIVE OF THE OPENING SECURED ADVANCE OF RS.39,94,012/- AND THE RECOVERY OF SECURED/MATERIAL ADVANCE OF RS.32,12,158/- FOR THE PERIOD UNDER CONSIDERATION. THEREFORE, THE AMOUNT OF RS.1,77,32,705/- WAS INCLUSIVE OF THE SUM OF RS.32, 12,158/- BEING SECURED ADVANCES. THEREFORE, THE AOS OBSERVATION THAT THERE WAS DIFF ERENCE OF RS.32,12,158/- IN THE VALUE OF WORK DONE BY THE ASSESEE AND THAT REPORTED BY NF R-II IS FACTUALLY INCORRECT AND THEREFORE, THE SAME IS DIRECTED TO BE DELETED. ACC ORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. AGGRIEVED BY THE SAID ORDER, NOW THE REVENUE IS I N APPEAL BEFORE US. 8. AT THE TIME OF HEARING BEFORE US, THE LD. DR REL IED ON THE ORDER OF THE AO AND URGED BEFORE THE BENCH TO SET ASIDE THE ORDER OF TH E LD. CIT(A) AND RESTORE THAT OF AO SINCE THE ASSESSEE THROUGH HIS REPLY DID NOT EXPLA IN THE DIFFERENCE AND HENCE, THE AO ADDED THE SAID DIFFERENCE OF RS.32,12,158 TO THE TO TAL INCOME OF THE ASSESSEE. 4 9. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE RELYING ON THE ORDER OF THE LD. CIT(A) REITERATED HIS SAME SUBMISSIONS AS S UBMITTED BEFORE THE LOWER AUTHORITIES AND PRAYED BEFORE US TO CONFIRM THE SAM E. 10. AFTER HEARING THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE LD. DR DID NOT CONTROVE RT THE ABOVE FINDINGS OF THE LD. CIT(A) AT THE TIME OF HEARING BEFORE US BY PRODUCIN G ANY COGENT MATERIAL/EVIDENCE. THEREFORE, IN THE ABSENCE OF ANY CONTROVERTING MATE RIAL PLACED BY THE LD. DR AT THE TIME OF HEARING BEFORE US, WE DECLIN TO INTERFERE WITH T HE ORDER OF THE LD.CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 11. GROUND NO. 3 RELATES TO WHETHER LD. CIT(A) WAS CORRECT IN TREATING THE AMOUNT OF RS.13,71,317/- AS INFRUCTUOUS. WE FIND THAT THE LD. CIT(A) HAS DEALT THE ISSUE AS UNDER : IN THE REMAND REPORT I FIND THAT THE ASSESSING OFF ICER IN REGARD TO POINT NO. 3A HAS RAISED AN ADDITIONAL OBSERVATION FRESH ADDITIONS O F RS.13,71,317/- ON ACCOUNT OF SUPPRESSION OF DEBTORS. THE ARS IN THIS REGARD DREW MY ATTENTION TO THE LAST BILL NO. 5 OF NFR-II FOR RS.16,42,547/- DETAILS OF EXECUTION OF C ONTRACT WITH NFR-II, THEIR LEDGER ACCOUNT, DETAILS OF ADVANCE FROM NFR II, BANK STA TEMENT ETC. WHICH CLEARLY PROVES THAT AFTER ADJUSTMENT OF ADVANCE, RECOVERY OF TDS O N A/C OF SALES TAX, INCOME TAX, ONLY AN AMOUNT OF RS.2,71,230/- STANDS AS THE CLOSING BA LANCE AND IN FACT, THE SAME AMOUNT WAS SHOWN AS CLOSING BALANCE OF SUNDRY DEBTORS IN A CCOUNT OF NFR-II BY THE APPELLANT. THUS, THIS OBSERVATION OF THE ASSESING OFFICER IN H IS REMAND REPORT FAILS AND IS TO BE TREATED INFRUCTUOUS. AT THE TIME OF HEARING BEFORE US, THE LD. DR DID NO T CONTROVERT THE ABOVE FINDINGS OF THE LD. CIT(A) BY PRODUCING ANY MATERIAL/EVIDENCE BEFOR E US SO THAT THE OBSERVATION OF THE LD. CIT(A) BE TREATED AS WRONG. THEREFORE, WE DO N OT FIND ANY INFIRMITY IN THE AFORESAID ORDER OF THE LD. CIT(A) AND THE SAME IS H EREBY UPHELD. THIS GROUND OF THE REVENUE IS ALSO DISMISSED. 12. NOW, WE ARE COMING TO ASSESSEES CROSS OBJECTION. T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. FOR THAT THE LD. ASSESSING OFFICER WAS NOT JUST IFIED TO INITIATE SCRUTINY ASSESSMENT IN CONTRARY TO. THE BOARDS INSTRUCTION REPORTED IN 11 1 TAXMAN 723(ST). 2. FOR THAT CHARGING INTEREST U/S 234(B) IS ILLEGAL AND ERRONEOUS. 3. FOR THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN SUGGESTING THE ADDITIONS OF RS.13,71,317/- WHICH HE HAS NOT ASSESSED IN THE ORI GINAL ASSESSMENT. 4. FOR THAT GROUND NO. 1 TAKEN BY THE LD., DCIT IN DELETING THE ADDITIONS OF RS.7,73,4761- IN APPEAL ORDER PASSED BY THE LD. CIT (A) XXXII, KOLKATA WAS WRONG AND THE SAME IS DULY CLARIFIED WITH SUBMISSION, STA TEMENT AND DOCUMENTS IN POINT NO. 1 OF THE FACT SHEET AS ENCLOSED BY YOUR RESPONDENT. F ROM THE STATEMENT AND DOCUMENTS IT APPEARED THAT THE SAID RECEIPT BY YOUR RESPONDENT W ERE ON ACCOUNT OF REFUND OF RETENTION MONEY OF RS.313407/- FOR THE PRECEDING PE RIOD AND RS.155000/- AND RS.310800/- WERE RECEIVED AS MATERIAL ADVANCES DURI NG THE PERIOD FROM CONTRACTEE 5 ALONG WITH SOME ADJUSTMENT ENTRIES. THE LD. DCIT WA S EARED IN ASSUMING THE SAME AS VALUE OF WORK DONE DURING THE PERIOD UNDER ASSESSME NT. 5: FOR THAT GROUND NO. 2 TAKEN BY THE LD. DCIT IN D ELETING THE ADDITIONS OF RS.3212150/- IN APPEAL ORDER PASSED WAS MISCONCEIVE D. IN FACT THE SAID AMOUNT WERE RECEIVED BY YOUR RESPONDENT FROM CONTRACTEE DURING THE PERIOD AS SECURED ADVANCE AND DULY RECORDED IN THE BOOKS OF ACCOUNTS OF YOUR RESP ONDENT. FROM THE FACT SHEET IN POINT NO. 2 ALONG WITH THE STATEMENTS AND DOCUMENTS IT WILL BE REVEALED THAT THE LD. DCIT WAS MISUNDERSTOOD THE FACTS AND WRONGLY ADDED THE SAME IN ASSESSED INCOME OF YOUR RESPONDENT. 6. FOR THAT THE GROUND NO. 3 TAKEN BY THE LD. DCIT IS MOST ERRONEOUS. IT IS A POST PERIOD OBSERVATION MADE BY THE LD. DCIT IN HIS REMAND REPO RT. IN FACT, HERE THE LD. DCIT HAS FAILED TO COMPREHEND THE NET ASSETS CONCEPT. THE LD . DCIT WRONGLY ARRIVED THE FIGURE OF RS.1371317/- AS CLOSING BALANCE OF DEBTORS ON A/C O F NFR II. FROM THE SUBMISSION, STATEMENTS AND DOCUMENTS IT WILL BE VERY MUCH CLEAR AS IN POINT NO. 3 OF THE FACT SHEET THAT THE CLOSING BALANCE OF RS.271230/- WAS CORRECT LY RECORDED BY YOUR RESPONDENT. 13. AT THE TIME OF HEARING BEFORE US, THE LD. COUNS EL FOR THE ASSESSEE DID NOT PRESS ANY GROUND TAKEN IN THE CROSS OBJECTION EXCEPT GROU ND NO. 2 AND TO WHICH HE ALSO FAIRLY CONCEDED THAT THIS BEING CONSEQUENTIAL IN NA TURE, DOES NOT REQUIRE ANY ADJUDICATION. HENCE, THE CROSS OBJECTION FILED BY T HE ASSESSEE IS TREATED AS DISMISSED BEING NOT PRESSED. 14. IN THE RESULT, BOTH THE APPEAL AND THE CROSS O BJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.6.2010 SD/- SD/- . .. . . .. .! !! !, , , , # . . . . . . . . , , , , (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (# # # #) )) ) DATED : 30 TH JUNE, 2010 !12 %&34 %5! JD.(SR.P.S.) 0 . -%%6 76(8- COPY OF THE ORDER FORWARDED TO: 1. +, /APPELLANT - D CIT, CIRCLE-10, KOLKATA 2 -+, / M/S. OBER CONSTRUCTION ENTERPRISES (P) LTD., CB-5 7, SALT LAKE CITY, SECTOR II, KOLKATA-64.. 3. %0&/ THE CIT, 4. %0& ()/ THE CIT(A), 5. !?% -%& / DR, KOLKATA BENCHES, KOLKATA 6 -%/ TRUE COPY , 0&@/ BY ORDER , A '4 / DEPUTY REGISTRAR .