DCIT, Circle-2, Udaipur V. M/s.Unique Infra Engineering India Private Limited , Udaipur

ITA 124/JODH/2020

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9720 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 14-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K.C. BADHOK LD.
• Assessee Lawyers: YOGESH POKHARNA LD
• Section: 143(3); 37(1)

Judgement Text

1 ITA NO.124/JODH/2020 ASSESSMENT YEAR: 2016-17 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR , , BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.124/JODH/2020 ( / ASSESSMENT YEAR: 2016-17) D CIT - CIRCLE - 2 AAYKAR BHAVAN, 2 ND FLOOR SUB CITY CENTRE NEAR RETI STAND, UDAIPUR RAJASTHAN-313 001. / VS. M/S. UNIQUE INFRA ENGINEERING INDIA PRIVATE LIMITED 5 , SECOND FLOOR 5-C MADHUBAN, UDAIPUR RAJASTHAN-313 001. ./ ./ PAN/GIR NO.AAACU-4363-M ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI YOGESH POKHARNA (CA)- LD. AR REVENUE BY : SHRI K.C. BADHOK - LD. CIT- DR / DATE OF HEARING : 04/11/2020 / DATE OF PRONOUNCEMENT : 21/12/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR (AY) 2016- 17 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME- TAX (APPEALS)- 1, UDAIPUR, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO.203/IT/UDR/2018-19 DATED 18/06/2020 ON FOLLOWING EFFECTIVE GROUNDS:- 2 ITA NO.124/JODH/2020 ASSESSMENT YEAR: 2016-17 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE AD DITION OF RS.1,53,55,879/- BEING THE AMOUNT CLAIMED UNDER THE HEA D REBATE AND DISCOUNT ON ACCOUNT OF NON-ACCEPTANCE OF BILLS BY THE AWARDER COMPANY I.E. M/S AMERICAN INTERNATIONAL HEALTH MANAGEMENT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS.1,53,55,879/- WITHOUT APPRECIATING THE FACT THAT IF THESE EXPENSE S OF RS.1,53,55,879/- AS RAISED AS PER BILLS WERE REJECTED BY THE AWARDER CO MPANY AND SUCH REJECTION OF EXPENSES WERE NOT DISPUTED OR LITIGATED BY THE A SSESSEE AND THEN IN SUCH CASE THESE EXPENSES OF RS.1,53,55,879/- CANNOT BE S AID TO BE PERTAINING TO CONTRACTUAL WORK AS AWARDED TO THE ASSESSEE BY THE AWARDER COMPANY. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS.1,53,55,879/- MERELY BY RELYING THE GENERAL SUBMISSION OF THE ASS ESSEE AND WITHOUT ASSIGNING ANY SPECIFIC REASON. 4. THE LEARNED CIT(A) FAILED TO CONSIDER THE FACT T HAT ONCE THESE EXPENSES OF RS.1,53,55,879/-WHICH WERE NOT ACCEPTED BY THE AWAR DER COMPANY TO BE RELATED TO THE CONTRACTUAL WORK AS AWARDED TO THE A SSESSEE, THE SAME CANNOT BE HELD TO BE LEGITIMATELY CLAIMED TO BE INCURRED W HOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND PROFESSION OF THE ASSESSEE. 5. THE ID. CIT(A) FAILED TO CONSIDER THE FACT THAT THIS NON ACCEPTANCE OF EXPENSES OF RS.1,53,55,879/- IF NOT CONSIDERED TO B E PART OF CONTRACTUAL RECEIPTS, THE SAME CANNOT BE CONSIDERED AS PART OF CONTRACTUAL EXPENSES OR BUSINESS LOSS AND HENCE CLAIM OF SUCH EXPENSES UNDE R THE HEAD REBATE AND DISCOUNT WAS LIABLE TO BE DISALLOWED. THIS IS MORE PARTICULARLY IN VIEW OF THE FACT THAT THE ASSESSEE HAS NEVER LITIGATED OR DISPU TED SUCH NON ACCEPTANCE OR REJECTION OF EXPENSES OF RS. 1,53,55,879/- BY THE A WARDER COMPANY AND THEREFORE, THESE EXPENDITURES CANNOT BE SAID TO BE INCURRED FOR THE PURPOSE OF BUSINESS AND PROFESSION AS THE SAME WERE NOT RELATE D TO CONTRACTUAL WORK AWARDED TO THE ASSESSEE. AS EVIDENT, THE REVENUE IS AGGRIEVED BY DELETION OF ADDITION OF RS.153.55 LACS BY LD. CIT(A). 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING WRITTEN SUBMI SSIONS AND DOCUMENTS PLACED IN THE PAPER BOOK. THE JUDICIAL PR ECEDENTS AS RELIED UPON DURING THE COURSE OF HEARING HAVE DULY BEEN DELIBERATED UPON. OUR ADJUDICATION TO THE SUBJECT MATTER WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3 ITA NO.124/JODH/2020 ASSESSMENT YEAR: 2016-17 3.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE WAS ASSESSED U/S 143(3) ON 27/12 /2018 WHEREIN IT WAS SADDLED WITH IMPUGNED ADDITION OF RS .153.55 LACS. THE SAME WOULD STEM FROM THE FACT THAT THE ASSESSEE REDUCED THIS AMOUNT FROM SALES TURNOVER AS WRITTEN-OFF. THE SAID AMOUNT WAS UNDER THE HEAD CONTRACT RECEIPTS WITH RESPECT TO A PARTY NAMELY M/S AMERICAN INTERNATIONAL HEALTH MANAGEMENT, UDAIPUR. 3.2 THE ASSESSEE JUSTIFIED THE DEDUCTION OF THE SAM E U/S 37(1) SINCE THESE WERE IN THE NATURE OF REBATE AND DISCOU NT ON BILLS RAISED BY THE ASSESSEE. THE ASSESSEE WAS A CONTRACTOR AND IT WAS QUITE NORMAL IN THE LINE OF THE BUSINESS THAT THE ENTIRE BILLS WOULD NOT BE ACCEPTED BY THE AWARDER FOR VARIOUS REASONS LIKE CA LCULATION OF PERCENTAGE OF COMPLETION METHOD, PHYSICAL MEASUREME NT SYSTEM, AND QUALITATIVE DIFFERENCES ETC. HOWEVER, REJECTING THE SUBMISSIONS, THE SAME WAS ADDED BACK TO THE INCOME OF THE ASSESS EE. 3.3 BEFORE LD. CIT(A), THE ASSESSEE REITERATED THE CIRCUMSTANCES UNDER WHICH THE AMOUNTS WERE WRITTEN-OFF AND SUBMIT TED THAT REBATE AND DISCOUNT REPRESENT NON-ACCEPTANCE OF CERTAIN PA RTS OF BILLS RAISED BY THE ASSESSEE. THE REBATES WERE LESS THAN 2.04% OF TOTAL BILLED AMOUNT DURING THE YEAR AND IT WAS NORMAL PRE VAILING TREND IN THE LINE OF ASSESSEES BUSINESS. THE SAME WAS A BUS INESS LOSS AND AN ALLOWABLE DEDUCTION U/S 37(1). IN SUPPORT, CONFI RMED COPY OF ACCOUNT OF M/S AMERICAN INTERNATIONAL HEALTH MANAGE MENT RECONCILING THE DIFFERENCE OF RS.153.55 LACS WAS AL SO FILED. THE SAID FIGURES WERE STATED TO BE NOT REDUCED FROM SER VICE TAX RETURNS SINCE THERE WAS NO COLUMN IN THE RETURN TO CLAIM SU CH DEDUCTION. 4 ITA NO.124/JODH/2020 ASSESSMENT YEAR: 2016-17 3.4 THE AFORESAID SUBMISSIONS AND EXPLANATIONS FOUN D FAVOR WITH LD. CIT(A) WHO IN THE BACKDROP OF CONFIRMED COPY OF STATEMENT AS WELL AS IN THE LIGHT OF VARIOUS JUDICIAL PRECEDENTS , DELETED THE ADDITIONS. AGGRIEVED, THE REVENUE IS IN FURTHER APP EAL BEFORE US. 4. GOING BY THE ENUMERATION OF FACTS AS ABOVE, WE F IND THAT CERTAIN PART OF BILLS RAISED BY THE ASSESSEE WERE N OT ACCEPTED BY THE AWARDER ENTITY NAMELY M/S AMERICAN INTERNATIONAL HE ALTH MANAGEMENT AND ACCORDINGLY THE SAME WAS CLAIMED AS REBATE & DISCOUNT. THE SALES FIGURES AS REFLECTED IN THE AUD ITED ACCOUNTS WERE DULY RECONCILED BY THE ASSESSEE WITH SERVICE T AX RETURN FIGURES. IN SUPPORT OF CLAIM, THE CONFIRMED COPY OF LEDGER ACCOUNT OF M/S AMERICAN INTERNATIONAL HEALTH MANAGEMENT WAS AL SO FILED WHICH WAS FOUND TO BE IN ORDER. HENCE, ON THE BASIS OF THESE FACTS, THE CLAIM THUS MADE BY THE ASSESSEE WAS CLEARLY ALL OWABLE U/S 37(1). THE ADDITIONS MADE BY LD. AO WOULD HAVE NO L EGS TO STAND AND THEREFORE, LD. CIT(A) WAS QUITE RIGHT IN DELETI NG THE SAME. 5. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED U/R 34(4) OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. SD/- SD/- (SANDEEP GOSAIN) (MAN OJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/12/2020 SR.PS:-JAISY VARGHESE 5 ITA NO.124/JODH/2020 ASSESSMENT YEAR: 2016-17 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. # ( ) / THE CIT(A) 4. # / CIT CONCERNED 5. $%!& ' , ' , ' / DR, ITAT, JODHPUR 6. %)*+ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, JODHPUR.