ITO, New Delhi V. M/s. Knowledge Infrastructure Systems Pvt. Ltd., New Delhi

ITA 1287/DEL/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1708 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 31-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 06-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K KHANNA
• Keywords: Assessment record
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-I NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER ITA NO. 1287/DEL/2014 ASSTT. YRS: 2005-06 INCOME-TAX OFFICER, VS. M/S KNOWLEDGE INFRASTRUCTU RE WARD 5(3), NEW DELHI. SYSTEMS PVT. LTD., (1) A-2/22, SAFDARJUNG ENCLAVE, N. DELHI. (2) G-02, SALCON AURUM COMPLEX, 4, COMMERCIAL CENTRE, JASOLA, NEW DELHI. PAN: AACCK 4380 L ( APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI V.K. KHANNA ADDL. CIT (DR) RESPONDENT BY : SHRI R.S. SINGHVI CA DATE OF HEARING : 31/08/2015. DATE OF ORDER : 09/10/2015. O R D E R PER S.V. MEHROTRA, A.M.. : THIS APPEAL, PREFERRED BY THE REVENUE, IS DIRECTE D AGAINST THE ORDER DATED 11-12-2013, PASSED BY THE LD. CIT(A)-VIII4, NEW DELHI IN APPEAL NO. 0069/2012-13, RELATING TO A.Y. 2005-06. SOLE EFFECT IVE GROUND IS AS UNDER: WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION M ADE BY THE AO OF RS. 13,75,400/- WHICH HAS BEEN NOT OFFERED FO R TAXATION DURING THE YEAR UNDER CONSIDERATION, AS PER PROVISI ON OF SECTION 198/199 OF THE INCOME TAX ACT, 1961. 2 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPA NY IN THE RELEVANT ASSESSMENT YEAR WAS ENGAGED IN THE BUSINESS OF PRO VIDING CONSULTANCY SERVICES IN THE FIELD OF EDUCATION AND INFRASTRUCTU RE AREA SUCH AS ENERGY, POWER AND CONSTRUCTION AND PROVIDING CONSULTANCY DU RING THE YEAR UNDER CONSIDERATION. IT HAD FILED ITS RETURN DECLARING IN COME OF RS. 16,505/-. ORIGINAL RETURN HAD BEEN COMPLETED U/S 143(3) ON 23 -11-2007 AT THE RETURNED INCOME. ON VERIFICATION OF ASSESSMENT RECORD THE AO NOTICED THAT THE ASSESSEE COMPANY HAD RECEIVED A SUM OF RS. 34,75,4 00/- (21,00,000 + 13,75,400), TOWARDS TOTAL FEE FOR PROFESSIONAL AND TECHNICAL SERVICES BUT ONLY RS. 21 LACS HAD BEEN SHOWN IN THE P&L A/C AND THE B ALANCE AMOUNT OF RS. 13,75,400/- HAD NOT BEEN OFFERED FOR TAXATION. ACCO RDINGLY, NOTICE U/S 148 WAS ISSUED, IN RESPONSE TO WHICH ASSESSEE REPLIED T HAT THE ORIGINAL RETURN FILED ON 27-10-2005 BE TREATED AS RETURN IN RESPONS E TO NOTICE U/S 148. THE ASSESSEE WAS REQUIRED TO SHOW AS TO WHY THE RECEIPT OF RS. 13,75,400/-, NOT SHOWN IN THE RETURN FOR THE YEAR UNDER CONSIDERATIO N, ON WHICH CREDIT OF TDS WAS CLAIMED AND WAS ALLOWED, BE NOT ADDED BACK TO A SSESSEES INCOME. 3. AFTER CONSIDERING THE ASSESSEES REPLY THE AO RE FERRED TO THE PROVISION OF SECTION 198 AND POINTED OUT THAT INCOME IS TO BE ASSESSED IN THE YEAR IN WHICH THE ASSESSEE CLAIMS THE CREDIT FOR TAX DEDUCT ED AT SOURCE OF SUCH INCOME. HE, ACCORDINGLY MADE ADDITION OF RS. 13,75, 400/-. 4. LD. CIT(A) ALLOWED THE ASSESSEES APPEAL ON MERI TS AND, ACCORDINGLY, DID NOT DECIDE THE ISSUE RELATING TO REOPENING OF T HE ASSESSMENT. 5. BEING AGGRIEVED THE DEPARTMENT IS IN APPEAL BEFO RE US. 6. THE ASSESSEE HAD SUBMITTED BEFORE LD. CIT(A) THA T THE IMPUGNED AMOUNTS WERE IN THE NATURE OF ADVANCE AND SAME WAS EITHER SUBJECTED TO TAX IN THE SUBSEQUENT YEAR OR REFUNDED. THE SUBMISSIONS WERE AS UNDER: 3 I. ADVANCE FROM M/S. NAT WEST CONSTRUCTIONS PVT. LTD. RS. 6 LACS II. ADVANCE FROM MIS. MUKAND LTD. RS. 5 LACS III. SERVICE TAX RS. 2,75,0001- I. ADVANCE FROM M/S. NAT WEST CONSTRUCTIONS PVT. LT D. AMOUNTING TO RS. 6 LACS DULY ACCOUNTED FOR AND TAXE D IN THE A. Y 2006-07. IN SUPPORT OF ABOVE POSITION, COPY OF BA LANCE SHEET AND ASSESSMENT ORDER IS ENCLOSED. II. THE AMOUNT OF 5 LACS BEING ADVANCE FROM M/S. M UKAND LTD. WHICH WAS REFUNDED BACK AS THE ASSESSEE HAS NO T PROVIDED PROFESSIONAL AND TECHNICAL SERVICES AND AS SUCH THE SAME IS NOT LIABLE TO TAX IN THE ASSESSMENT YEAR 2005-06 OR 200 6-07, COPY OF ACCOUNT OF M/S. MUKAND LTD. AND BANK STATEMENT IS E NCLOSED IN SUPPORT AND FOR REFERENCE. III. SERVICE TAX TO THE EXTENT OF RS. 2, 75,000/- WAS DULY PAID TO THE GOVERNMENT AND THERE IS NO CASE OF ANY INCO ME OR TAX LIABILITY IN RESPECT OF THE SAME. 7. HAVING HEARD BOTH THE PARTIES I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A), BECAUSE NONE OF THE F ACTS NARRATED IN THE FINDINGS OF LD. CIT(A) HAVE BEEN CONTROVERTED BY TH E DEPARTMENT. IT IS NOT DISPUTED THAT THE IMPUGNED AMOUNTS WERE IN THE NATU RE OF ADVANCE ON WHICH SERVICE TAX WAS PAID TO THE GOVERNMENT. AS REGARDS ADVANCE FROM M/S NAT WEST CONSTRUCTIONS PVT. LTD., THE AMOUNT HAD DULY B EEN ACCOUNTED FOR AND TAXED IN ASSESSMENT YEAR 2006-07, FOR WHICH ASSESSE E HAD FILED BALANCE-SHEET AND ASSESSMENT ORDER. LD. CIT(A) HAS OBSERVED THAT OUT OF ADVANCE OF RS. 6 LACS, RS. 1,32,005/- WAS CONSIDERED AS INCOME IN AY 2006-07 AND IT WAS SHOWN IN THE TAX AUDIT REPORT OF THE ASSESSEE IN TH E NEXT YEAR. 8. AS REGARDS ADVANCE FROM M/S MUKAND LTD., OF RS. 5 LACS, THE SAME WAS REFUNDED BACK AS THE ASSESSEE HAD NOT PROVIDED PROFESSIONAL AND 4 TECHNICAL SERVICES. THE ASSESSEE HAS DULY ACCOUNTED FOR THIS AMOUNT IN ITS BOOKS OF ACCOUNT AND ASSESSEE HAD FURNISHED THE BAN K STATEMENT ALSO IN SUPPORT OF ITS CONTENTION REGARDING REFUND OF ADVAN CE. 9. IN VIEW OF ABOVE, ORDER OF THE LD. CIT(A) IS UPH ELD AND THE DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 09/10/2015. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 09/10/2015. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. 5 -+ DATE INITIAL 1. DRAFT DICTATED ON -09.2015 PS 2. DRAFT PLACED BEFORE AUTHOR .09.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.