ITO Wd 36(2), Kolkata, Kolkata V. M/s Shree Vinayak Udyog, Kolkata

ITA 1584/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83153 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 01-11-2012
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: P R KOTHARI
• Keywords: Depreciation
• Section: 244A; 194C; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI MAHAVIR SINGH, JM& HONBLE S RI SHAMIM YAHYA, AM ] ITA NO.1584/KOL/2012 ASSESSMENT YEAR : 2004-05 ( APPELLANT ) (RESPONDENT) I.T.O., WARD-36(2), ..-VS- M/S.SHREE VINAYAK UD YOG KOLKATA KOLKATA (PAN: ABAFS 2661 N) FOR THE APPELLANT SHRI ARINDAM BHATTACHARJEE, JCIT, SR.DR FOR THE RESPONDENT SHRI P.R.KOTHARI, FCA DATE OF HEARING : 15.10.2014 DATE OF PRONOUNCEMENT : 28. 10.2014. ORDER PER SHRI SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. C.I.T.(A)- XX, KOLKATA DT. 18.07.2012 AND PERTAINS TO ASSESSMENT Y EAR 2004-05.. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA D AS UNDER :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF CIT(A) IS ERRONEOUS DUE TO THE FACT THAT IT IS NOT TREATING THE RECEIPT AS INC OME. 2. THE APPELLANT CRAVES LEAVE TO MAKE ANY ADDITION, MODIFICATION AND REMODELING OF THE GROUNDS. 3. THIS IS THE SECOND ROUND IN WHICH THE APPEAL HAS CO ME TO THE TRIBUNAL. EARLIER THE ISSUE HAS BEEN REMITTED TO THE FILE OF AO BY IT AT. THE BRIEF FACTS OF THE CASE ARE AS UNDER :- THE APPELLANT ENTERED INTO AN AGREEMENT (MOU) ON 2 4.2.03 WITH BALASORE ALLOYS UNDER WHICH THE APPELLANT WAS REQUIRED TO PROCESS T HE CHROME ORE SUPPLIED BY BALASORE ALLOYS AFTER SETTING UP REQUIRED UPGRADATION PLANT . UNDER THE SAID MOU, BALASORE ALLOYS WAS REQUIRED TO GIVE CERTAIN ADJUSTABLE ADV ANCES/DEPOSITS TO THE APPELLANT TOWARDS COST OF PLANT AND MACHINERY AND REIMBURSEME NT FOR CONSTRUCTION OF FACTORY SHED, BORING WELL AND THE OFFICE SPACE AND ACCOMMOD ATION. ACCORDINGLY, BALSORE ALLOYS ITA.NO.1584/KOL/2012 M/S.S HREE VINAYAK UDYOG A.YR.2004-05 2 MADE CLAIMED OF THE FOLLOWING PAYMENT TOWARDS AFORE SAID ADVANCE/DEPOSITS & RE- IMBURSEMENTS: A) DIRECTLY TO THE APPELLANT : RS.27,00,000/- B) PAID TO THIRD PARTIES : RS. 7,00,000/- RS.34,00,000 /- OUT OF 27 LAKHS PAID DIRECTLY TO THE APPELLANT, A S UM OF RS.5,81,083.80 WERE APPROPRIATED BY THE APPELLANT AS REIMBURSEMENT AGAI NST THE COST INCURRED FOR FACTORY SHED & BOREWELL AND BALANCE AMOUNT OF RS.21,18,916. 20 WAS SHOWN AS LIABILITY IN APPELLANTS BALANCE SHEET AS ON 31.03.2004. THE JOB CHARGES DONE FOR BALASORE ALLOYS WORTH RS.200616.08 DURING THE YEAR UNDER CONSIDERAT ION WERE SHOWN AS INCOME IN THE P&L A/C OF THE APPELLANT AND SAID AMOUNT WAS REFLEC TED AS SUNDRY DEBTORS IN THE B/SHEET OF THE APPELLANT AS AT 31.03.2004. THE APPE LLANT WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. BALASORE ALLOYS DEDUCTED A SUM OF RS.70,000/- AS TD S ON AFORESAID PAYMENTS AND FILED T.D.S. RETURN. INITIALLY BALASORE ALLOYS SHOWED T HE NATURE OF PAYMENT OF RS.34,00,000/- AS TRANSPORTATION CHARGES IN ITS TDS CERTIFICATE FOR RS.70000/- DEDUCTED AS TDS BUT BY A CLARIFICATION LETTER DATED 27.07.2009 SUBSEQUENTL Y ISSUED BY BALASORE ALLOYS AS WELL AS AN AFFIDAVIT BY BALASORE ALLOYS SWORN ON 11.01.2011 IT ADMITTED THAT THE TDS WAS AGAINST THE ADVANCE PAYMENT OF RS.34 LAKHS MADE BY THEM WHICH WAS TO BE ADJUSTED AGAINST THE RUNNING BILLS FOR CONVERSION CHARGES AN D DUE TO OVERSIGHT, THE NATURE OF PAYMENT WAS MENTIONED AS TRANSPORTATION CHARGES I NSTEAD OF JOB WORK IN THE TDS CERTIFICATE. ON ACCOUNT OF DISPUTES BETWEEN THE APP ELLANT AND BALASORE ALLOYS, BALASORE ALLOYS FILED AN ARBITRATION PETITION BEFORE HONBLE ORISSA HIGH COURT ON 29.07.2005. ULTIMATELY, THE APPELLANT HAD TO PAY BACK MUTUALLY SETTLED RS.25,00,000/- UNDER AN ARBITRATION AWARD DATED 20.10.2009. THE APPELLANT F ILED BEFORE THE AO WRITTEN SUBMISSION WITH EVIDENCES DATED 02.06.2011 AS WELL AS A LETTER DATED 29.08.2011 EXPLAINING AND RECONCILING THE DIFFERENT AMOUNT AS POINTED OUT BY ITAT IN ITS ORDER SETTING ASIDE THE ISSUE TO FILE OF A.O. 4.2.THE AO, ADDED THE AFORESAID AMOUNT OF RS.34,00, 000/- AS UNDISCLOSED INCOME FROM TRANSPORTATION CHARGES IN THE IMPUGNED ORDER AS W AS DONE BY HIS PREDECESSOR IN THE ORDER WHICH WAS SET ASIDE BY THE ITAT BY ITS AFORES AID ORDER DATED 11.06.2010. THE A.O. MADE ADDITION BASED ON FOLLOWING OBSERVAT IONS : A) THE RATE OF TDS IS NOTED @2.1% WHICH ESTABLISHES TH AT THE PAYMENT WAS MADE U/S 194C. B) THE ARBITRATION PETITION FILED BEFORE THE HONBLE O RISSA HIGH COURT BY BALASORE ALLOYS DOES NOT TAKE A SHAPE IN DETERMINING THE INC OME OF THE ASSESSEE FOR THE CONCERNED ASST.YEAR. C) THE ISSUE INVOLVED IN THIS CASE IS NOT A CASE OF T HE PRINCIPAL OF METHOD OF ACCOUNTING I.E. CASH BASIS, MERCANTILE BASIS & HYBRID BASIS. THE ISSUE INVOLVED IN THE INSTANT CASE CLEARLY VIOLATED THE PROVISIONS OF TDS READ WITH SE CTION 198 OF THE IT ACT, 1961 WHICH CLEARLY DESCRIBES THAT ALL SUMS DEDUCTED IN ACCORDA NCE WITH SECTION 194 R.W. PROVISIONS OF THIS CHAPTER SHALL FOR THE PURPOSE OF COMPUTING THE INCOME OF AN ASSESSEE, BE DEEMED TO BE THE INCOME RECEIVED, PROVIDED THAT THE SUM BE ING TAX PAID UNDER, SUB-SECTION 1A OF SECTION 192 FOR THE PURPOSE OF COMPUTING THE INC OME OF AN ASSESSEE SHALL NOT BE DEEMED TO BE INCOME RECEIVED. THE ASSESSEE CLAIMED THE ENTIRE AMOUNT OF TDS OF RS .70000/- FOR THE YEAR UNDER CONSIDERATION AND ACCORDINGLY, IT HAS TO OFFER THE INCOME ACCRUED ON MAKING SUCH TDS ON THE AMOUNT TO BE THE TOTAL INCOME IN ITS COMPUTA TION WHICH IS CATEGORICALLY AND SPECIFICALLY STATED IN SECTION 198 OF THE IT ACT, 1 961. THE ASSESSEE HAS TAKEN A CREDIT OF RS.70000/- ON ACCOUNT OF TDS AND ALSO CLAIMED A REF UND OF RS.70000/- CORRESPONDING ITA.NO.1584/KOL/2012 M/S.S HREE VINAYAK UDYOG A.YR.2004-05 3 TO THE FIGURE OF TDS IN ITS RETURN OF INCOME FILED ON 01.11.2004. THE REFUND WAS DULY ISSUED GIVING INTEREST U/S 244A OF RS.8400/- TOTALI NG OF RS.78400/-. D) THE ASSESSEE ENCASHED THE SAID REFUND VOUCHER. E) THE CLAIM OF ASSESSEE THAT IT RECEIVED RS.270000 0/- ONLY AS AGAINST RS.3400000/-CLAIMED TO HAVE BEEN PAID BY BALASORE A LLOYS IS NOT AT ALL TENABLE AND ACCEPTABLE AS BALASORE ALLOYS HAS ALREADY STATED IN HIS SUBSEQUENT LETTER THAT RS.3400000/- WERE PAID/CREDITED TO THE ASSESSEE ON ACCOUNT OF JOB CHARGES INSTEAD OF TRANSPORTATION CHARGES. F) DESPITE REPEATED OPPORTUNITIES, THE ISSUE RAISE D BY HONBLE ITAT REMAINED UNANSWERED BY THE ASSESSEE AS IT FAILED TO RECONCIL E THE PAYMENT RECEIVED WITH THE SCHEDULE OF PAYMENT AS PER THE AGREEMENT WITH BALAS ORE ALLOYS LTD. AS WELL AS THE DETAILS OF PAYMENT RECEIVED BY IT AND PAYMENT MADE TO OTHER PARTIES AS CLAIMED. 4. AGAINST THE ABOVE ORDER THE ASSESSEE APPEALED BE FORE LD. CIT(A)AND FILED ELABORATE SUBMISSIONS. THE LD. CIT(A) REFERRED TO M OU BETWEEN THE ASSESSEE AND BALASORE ALLOYS DATED 24.02.2003. THE LD.CIT(A) DEL ETED THE ADDITION BY OBSERVING AS UNDER :- IN VIEW OF AFORESAID CLAUSES, IT IS CLEAR THAT THE BALASORE ALLOYS WAS REQUIRED TO PAY RS.14 LACS AS ADJUSTABLE ADVANCES AND RS.7 LACS AS DEPOSIT WHICH WAS REFUNDABLE AT THE TIME OF TERMINATION OF CONTRACT THUS TOTALING RS.21 LACS. THUS, OUT OF RS.27 LACS ACKNOWLEDGED TO HAVE BEEN RECEIVED BY APPELLANT UND ER THE SAID MOU, RS.21 LACS WERE TOWARDS ADJUSTABLE ADVANCES/REFUNDABLE DEPOSITS AS DESCRIBED ABOVE. APART FROM SAID RS.21 LACS, BALASORE ALLOYS WAS REQUIRED TO REIMBUR SE COST OF FACTORY SHED AND TUBEWELL/BOREWELL AGAINST WHICH THE APPELLANT ADJUS TED RS.554639.80 AGAINST COST OF FACTORY SHED AND RS.26000/- AGAINST THE COST OF TUB EWELL. THE APPELLANTS CLAIM OF ESCALATION OF REIMBURSEMENT AGAINST FACTORY SHED TO RS.5.55 LACS WAS DUE TO INCREASE IN COST IS REFLECTED IN ITS BOOKS OF ACCOUNTS. THE APP ELLANT HAD NOT CLAIMED ANY DEPRECIATION ON COST OF FACTORY SHED AND TUBEWELL BECAUSE OF REI MBURSEMENT OF COST BY BALASORE ALLOYS. THE BALANCE AMOUNT I.E. RS.27 LACS LESS APP ROPRIATION TOWARDS REIMBURSEMENT OF COST OF FIXED ASSETS HAD BEEN SHOWN AS LIABILITY IN THE BALANCE SHEET AS AT 31.03.2004. THUS, THE RECEIPT OF RS.27 LACS OUT OF RS.34 LACS I S FULLY EXPLAINED AND RECONCILED AND AS PER CLAUSES OF THE MOU AS REPRODUCED HEREINABOVE, T HERE IS NO DOUBT THAT THE RECEIPT OF RS.27 LACS WAS IN THE NATURE OF ADJUSTABLE ADVANCE/ REFUNDABLE DEPOSITS AND REIMBURSEMENT AGAINST COST OF FIXED ASSETS. SO FAR AS THE CLAIM OF BALASORE ALLOYS ABOUT THE PA YMENT OF RS.7 LACS TO THIRD PARTIES ON BEHALF OF THE APPELLANT IS CONCERNED, TH OUGH THE SAID CLAIM WAS NOT ACKNOWLEDGED BY THE APPELLANT, THE WHOLE OF RS.34 L ACS, WHICH INCLUDES RS.7 LACS CLAIMED TO HAVE BEEN GIVEN TO THIRD PARTIES, CATEGO RICALLY ACCEPTED TO HAVE BEEN GIVEN AS ADVANCES AGAINST JOB CHARGES AS IS EVIDENT FROM THE CLARIFICATION LETTER DATED 27.07.2009 AND AFFIDAVIT DATED 10.01.2011 OF THE BALASORE ALLO YS. THERE IS NOTHING ON RECORD TO DISPUTE THE ASSERTION/CLARIFICATION MADE BY BALASOR E ALLOYS IN THIS REGARD. THE RATE OF T.D.S. @2.1% OR MENTIONING OF SECTION 194C IN THE T .D.S. CERTIFICATE OR T.D.S. RETURN DOES NOT GO AGAINST THE CLAIM OF PAYMENT OF RS.34 LACS A S ADVANCE AS EVEN IN CASE OF ADVANCE AGAINST JOB CHARGES, THE RATE OF T.D.S. WOULD BE 2. 1% AND SECTION WOULD BE 194C. ONCE THE PAYMENT IS DEMONSTRATED TO BE ADVANCE OR DEPOSI T OR REIMBURSEMENT OF CAPITAL COST, THERE IS NO QUESTION OF TREATING THE SAME AS INCOM E UNLESS THE JOB AGAINST WHICH THE SAID ADVANCE WAS GIVEN, IS PERFORMED AS THE APPELLA NT WAS UNDISPUTEDLY FOLLOWING THE ITA.NO.1584/KOL/2012 M/S.S HREE VINAYAK UDYOG A.YR.2004-05 4 MERCANTILE SYSTEM OF ACCOUNTING. THE ULTIMATE REPAY MENT OF RS.25 LACS BY THE APPELLANT UNDER THE ARBITRATION AWARD IS ALSO A POINTER IN TH IS REGARD. AS PER AFFIDAVIT DATED 11.01.11 OF BALASORE ALLOYS LTD., THE NON CHARGING, AS ITS REVENUE EXPENSES OF THE YEAR UNDER CONSIDERATION, OF RS.4 LACS PAID BY IT, ALSO STRENGTHENS THE VIEW THAT SUBJECT SUM WAS NOT IN THE NATURE OF ANY CHARGES PAID FOR JOB A LREADY PERFORMED IN THE YEAR UNDER CONSIDERATION. THE JOB PERFORMED DURING THE YEAR WA S ALREADY SHOWN AS INCOME IN THE PROFIT & LOSS ACCOUNT OF THE APPELLANT. THE JUDGMEN TS IN CIT VS CORAL ELECTRONICS P.LTD. AND K.K.KHULLAR VS DCIT QUOTED BY THE APPELL ANT ARE APPLICABLE TO THE FACTS OF THE INSTANT APPEAL. SO FAR AS ISSUE OF CLAIM OF T.D.S. OF RS.70000/- BY THE APPELLANT AND THEREBY EXIGIBILITY OF SUM OF RS.34 LACS TO TAX AS CLAIMED BY AO IS CONCERNED, THE CLAIM OF THE A.O. IN THIS REGARD IS UNACCEPTABLE. ONLY BECAUSE O F TDS, THE AMOUNT ON WHICH TAX IS DEDUCTED DOES NOT BECOME LIABLE TO TAX. SECTION 198 NO WHERE PROVIDES SO. SECTION 198 COVERS ONLY THE AMOUNT OF TAX DEDUCTED AND NOT THE ENTIRE AMOUNT ON WHICH TAX WAS DEDUCTED. TAXABILITY OF A RECEIPT DEPENDS UPON THE ACCRUAL OR RECEIPT OF AN AMOUNT DEPENDING UPON THE MERCANTILE OR CASH SYSTEM OF ACC OUNTING FOLLOWED BY THE APPELLANT AND NOT ON THE CLAIM OF TDS MADE. ON THE OTHER HAND , CREDIT OF TDS IS ALLOWABLE ONLY UPON SHOWING AS INCOME THE CORRESPONDING AMOUNT ON WHICH TAX IS DEDUCTED. FURTHERMORE, SECTION 198 DOES NOT OVERRIDE SECTION 145 WHICH INCOME IS COMPUTED AS PER METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. THE CLAIM OF TDS BY APPELLANT HAD BEEN ADMITTED TO BE A MISTAKE BUT SAI D MISTAKE CANNOT BE SO FATAL TO MAKE THE APPELLANT LIABLE TO PAY TAX ON THE AMOUNT NOT Y ET ACCRUED AS PER MERCANTILE SYSTEM OF ACCOUNTING REGULARLY FOLLOWED BY IT. THE WRONG GRAN T OF REFUND CAN BE RECTIFIED BY REFUSING TO GRANT CREDIT OF TDS AND RECOVER THE AMO UNT ALREADY REFUNDED WITH DUE INTEREST. THE JUDGMENT IN ITO VS SIKKA INTERNATIONA L FREIGHT SERVICES P.LTD. QUOTED BY THE APPELLANT IS APPLICABLE FOR THIS ISSUE. THE APP ELLANT CLAIMED THAT IT HAD ALREADY DEPOSITED THE SAID REFUNDED AMOUNT WITH INTEREST T HEREON. IT IS ALSO NOTICED THAT APPELLANT IN HIS SUBMISSIO N HAS EXPLAINED AND RECONCILED THE DIFFERENT FIGURES OF RS.34 LACS, RS.27 LACS AND RS. 28 LACS AS POINTED OUT BY ITAT AND SAID RECONCILIATION WAS EXPLAINED TO A.O. ALSO BY LETTER DATED 29.08.2011 FILED BEFORE HIM AND THERE IS NO MATERIAL ON RECORD TO DISPUTE OR DI SPROVE APPELLANTS EXPLANATION/RECONCILIATION IN THIS RESPECT. SO FAR AS MENTIONING OF TRANSPORTATION CHARGES A S NATURE OF PAYMENT IN THE T.D.S. CERTIFICATE IS CONCERNED, THE APPELLANT CANNOT BE M ADE LIABLE TO TAX ONLY BECAUSE OF MISTAKE ORIGINALLY COMMITTED BY BALASORE ALLOYS WHI CH WAS SUBSEQUENTLY CLARIFIED/EXPLAINED BY BALASORE ALLOYS ITSELF. THER E IS NOTHING ON RECORD TO SUGGEST THAT ANY TRANSPORT VEHICLE WAS OWNED BY THE APPELLANT OR ANY EXPENSES RELATING TO INCOME FROM TRANSPORTATION CHARGES WERE INCURRED BY IT AND WITHOUT ANY VEHICLE OWNED AND WITHOUT ANY CORRESPONDING EXPENSES, HOW APPELLANT C AN BE SAID TO HAVE EARNED TRANSPORTATION CHARGES TO THE TUNE OF RS.34 LACS. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE AND IN LAW, THE APPEAL ON THIS GROUND IS ALLOWED AND THEREBY THE AD DITION MADE BY THE AO IS DIRECTED TO BE DELETED SUBJECT TO THE DIRECTION THAT THE CREDIT FOR TDS OF RS.70,000/- SHALL NOT BE ALLOWED TO THE APPELLANT IN THE YEAR UNDER CONSIDER ATION. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BE FORE US. ITA.NO.1584/KOL/2012 M/S.S HREE VINAYAK UDYOG A.YR.2004-05 5 5. WE HAVE HEARD BOTH THE COUNSEL AND CAREFULLY PER USED THE RECORDS. WE FIND THAT ASSESSEE IN THIS CASE HAS ENTERED INTO AN AGREEMENT (MOU) WITH BALASORE ALLOYS UNDER WHICH THE ASSESSEE WAS REQUIRED TO PROCESS THE CHRO ME ORE SUPPLIED BY BALASORE ALLOYS AFTER SETTING UP REQUIRED UPGRADATION PLANT. UNDER THE MOU BALASORE ALLOYS WAS REQUIRED TO GIVE CERTAIN ADJUSTABLE ADVANCES/DE POSITS TO THE ASSESSEE TOWARDS COST OF PLANT AND MACHINERY AND REIMBURSEMENT FOR CONSTR UCTION OF FACTORY SHED, BORING WELL AND THE OFFICE SPACE AND ACCOMMODATION. ACCORD INGLY BALASORE ALLOYS MADE CLAIM OF THE FOLLOWING PAYMENTS TOWARDS AFORESAID A DVANCE/DEPOSITS & REIMBURSEMENTS : A) DIRECTLY TO THE ASSESSEE : RS.27,00,000/- B) PAID TO THIRD PARTIES : RS. 7,00,000/- RS.34,00,000/- OUT OF 27 LAKHS PAID DIRECTLY TO THE ASSESSEE, A SU M OF RS.5,81,083.80 WERE APPROPRIATED BY THE ASSESSEE AS REIMBURSEMENT AGAIN ST THE COST INCURRED FOR FACTORY SHED & BOREWELL AND BALANCE AMOUNT OF RS.21,18,916. 20 WAS SHOWN AS LIABILITY IN ASSESSEES BALANCE SHEET AS ON 31.03.2004. THE JOB CHARGES DONE FOR BALASORE ALLOYS WORTH RS.200616.08 DURING THE YEAR UNDER CONSIDERAT ION WERE SHOWN AS INCOME IN THE P&L A/C OF THE ASSESSEE AND SAID AMOUNT WAS REFLECT ED AS SUNDRY DEBTORS IN THE B/SHEET OF THE ASSESSEE AS ON 31.03.2004. THE ASSES SEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. BALASORE ALLOYS DEDUCTED A SUM OF RS.70,000/- AS TD S ON AFORESAID PAYMENTS AND FILED T.D.S. RETURN. INITIALLY BALASORE ALLOYS SHOWED THE NATURE OF PAYMENT OF RS.34,00,000/- AS TRANSPORTATION CHARGES IN ITS T DS CERTIFICATE FOR RS.70000/- DEDUCTED AS TDS BUT BY A CLARIFICATION LETTER DATED 27.07.2009 SUBSEQUENTLY ISSUED BY BALASORE ALLOYS AS WELL AS AN AFFIDAVIT BY BALASORE ALLOYS SWORN ON 11.01.2011 IT ADMITTED THAT THE TDS WAS AGAINST THE ADVANCE PAYME NT OF RS.34 LAKHS MADE BY THEM WHICH WAS TO BE ADJUSTED AGAINST THE RUNNING BILLS FOR CONVERSION CHARGES AND DUE TO OVERSIGHT, THE NATURE OF PAYMENT WAS MENTIONED AS TRANSPORTATION CHARGES INSTEAD OF JOB WORK IN THE TDS CERTIFICATE. ON ACCOUNT OF DI SPUTES BETWEEN THE ASSESSEE AND BALASORE ALLOYS, BALASORE ALLOYS FILED AN ARBITRATI ON PETITION BEFORE HONBLE ORISSA HIGH COURT ON 29.07.2005. ULTIMATELY, THE ASSESSEE HAD TO PAY BACK MUTUALLY SETTLED ITA.NO.1584/KOL/2012 M/S.S HREE VINAYAK UDYOG A.YR.2004-05 6 RS.25,00,000/- UNDER AN ARBITRATION AWARD DATED 20. 10.2009. THE ASSESSEE FILED BEFORE THE AO WRITTEN SUBMISSION WITH EVIDENCES DATED 02.0 6.2011 AS WELL AS A LETTER DATED 29.08.2011 EXPLAINING AND RECONCILING THE DIFFERENT AMOUNT AS POINTED OUT BY ITAT IN ITS ORDER SETTING ASIDE THE ISSUE TO THE FILE OF A. O. 5.1. THE ABOVE EXPLANATION WAS NOT FOUND SATISFACTO RY BY THE AO. HE PROCEEDED TO ADD AGAIN RS.34,00,000/- AS UNDISCLOSED INCOME FRO M TRANSPORTATION CHARGES. ONE OF THE MAIN REASON CITED BY THE AO WAS THAT THE ASSESS EE FAILED TO RECONCILE THE PAYMENT RECEIVED AS PER THE AGREEMENT WITH BALASORE ALLOYS LTD. WE FIND THAT THE LD. CIT(A) IS CORRECT IN HOLDING THAT THE ASSESSEE HAS DULY EXPLA INED THE ENTIRE AMOUNT RECEIVED FROM M/S.BALASORE ALLOYS LTD. AS ADVANCES/DEPOSITS AND REIMBURSEMENTS. THE FACT THAT UNDER THE ARBITRATION THE ASSESSEE HAD TO PAY RS.25,00,000/- IS ALSO A POINTER TO THE VERACITY OF THE ASSESSEES SUBMISSIONS. THE LD. CIT(A) HAS ALSO GIVEN A FINDING THAT THE ASSESSEE HAS DULY EXPLAINED BEFORE THE AO AND GAVE A RECONCILIATION BY A LETTER DATED 29.08.2011 FILED BEFORE AO. NOTHING HA S BEEN BROUGHT OUT BY THE REVENUE OR THE AO TO DISPUTE ASSESSEES EXPLANATION/RECONCI LIATION IN THIS RESPECT. WE AGREE WITH THE LD. CIT(A) THAT MAINLY BECAUSE THE TRANSPO RTATION CHARGES WAS MENTIONED AS PAYMENT IN TDS CERTIFICATE THAT CANNOT BE A CONCLUS IVE EVIDENCE THAT INCOME HAS ACCRUED TO THE ASSESSEE. THE FACT THAT IT WAS A MIS TAKE WAS DULY CLARIFIED BY BALASORE ALLOYS. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED O PINION, THE ASSESSEE HAS DULY EXPLAINED ALL THE FACTS NECESSARY. THE ENTIRE RECEI PT CANNOT BE TREATED AS INCOME. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD. CIT(A). ACCORDINGLY WE UPHOLD THE SAME. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE ST ANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 28.10.2014. SD/- SD/- [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 28.10.2014. R.G.(.P.S.) ITA.NO.1584/KOL/2012 M/S.S HREE VINAYAK UDYOG A.YR.2004-05 7 COPY OF THE ORDER FORWARDED TO: 1. M/S.SHREE VINAYAK UDYOG, 23A, N.S.ROAD, FLAT NO.11, 11 TH FLOOR, KOLKATA- 700001. 2 I.T.O., WARD-36(2), KOLKATA. 3 . CIT(A)-XX, KOLKATA. 4. CIT KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, ASST. REGISTRAR , ITAT, KOLKATA BENCHES