SVEC Constructions Limited, Hyderabad V. DCIT, Circle-3(3), Hyderabad

ITA 1938/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66140 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 18-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRID. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1938/HYD/2011 ASSESSMENT YEAR : 2008-09 SVEC CONSTRUCTIONS LTD., HYDERABAD. .... APPELLANT PAN:AADCS 2215B VS. DCIT, CIR-3(3), HYDERABAD. RESPONDENT APPELLANT BY : SHRI V. RAGHAVENDRA RAO RESPONDENT BY : SMT. NIVEDITA BISWAS DATE OF HEARING : 19-06-2012 DATE OF PRONOUNCEMENT: 10-08-2012 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 30-08-2011 PASSED IN APPEAL NO.204/DCIT 3(3)/CIT(A)-IV/10-11 AND IT PERTAINS TO THE ASSESSM ENT YEAR 2008-09. 2. THE ASSESSEE RAISED 9 GROUNDS OF APPEAL IN ALL W HICH MORE OR LESS BASICALLY RELATE TO THE ISSUE OF REJECTING THE ASSESSEES CLAIM FOR CREDIT OF TDS AMOUNTING TO RS.22,34,187. 2 ITA NO. 1938 OF 2011 SVEC CONSTRUCTIONS LTD., HYDERABAD. 3. BRIEFLY STATED THE FACTS ARE, THE ASSESSEE IS E NGAGED IN THE BUSINESS OF EXECUTION OF CONTRACT WORKS. FOR THE A SSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INC OME DECLARING TOTAL INCOME OF RS.11,19,87,996. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ON EXAMINING TDS CERTIFICATES F OUND THAT AS AGAINST A TOTAL TDS CLAIM OF RS.3,48,87,842/- AN AM OUNT OF RS.22,34,187 RELATES TO TDS ON MOBILISATION ADVANCE S WHICH ARE NOT OFFERED TO TAX FOR THE ASSESSMENT YEAR UNDER D ISPUTE. THE AO THEREFORE RELYING ON A DECISION OF ITAT, HYDERAB AD BENCH IN CASE OF M/S LIMAK SOMA JV PASSED IN ITA NO. 99/HYD/ 2010 DATED 24-9-2010 RESTRICTED THE CLAIM OF TDS TO RS.3,26,5 3,655/-. THE ASSESSEE CHALLENGED THE DISALLOWANCE OF TDS BY FILI NG AN APPEAL BEFORE THE CIT (A). IN COURSE OF HEARING BEFORE TH E CIT (A), THE ASSESSEE CONTENDED THAT THE MOBILISATION ADVANCE RE CEIVED FORMS PART OF UNBILLED WORK IN PROGRESS OF RS.11.01 CRORE S OFFERED AS INCOME. RELYING UPON A DECISION OF HYDERABAD BENCH OF ITAT IN CASE OF M/S. BGS-SGS SOMA JV IN ITA NO. 164/HYD/10 DATED 28- 10-2011 AND ITA NO.1320 AND 1321/HYD/2010 DATED 8-6 -2011, THE ASSESSEE SUBMITTED THAT THE CREDIT FOR TDS HAS TO BE GIVEN. THE CIT (A) REJECTED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THA T THE UNBILLED WORK IN PROGRESS WAS ON ACCOUNT OF THE UTILISATION OF MOBILISATION ADVANCE RECEIVED DURING THE YEAR ON WHICH TDS WAS D EDUCTED. THE CIT (A) THEREFORE DISMISSED THE APPEAL OF THE A SSESSEE. 4. THE LEARNED AR RELYING UPON THE DECISIONS OF IT AT, HYDERABAD BENCH WHICH WAS CITED BEFORE CIT (A) SUBM ITTED THAT SINCE THE MOBILISATION ADVANCE HAS BEEN OFFERED TO TAX DURING THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE IS ENTITLED TO AVAIL CREDIT FOR TDS. IN THIS REGARD, THE LD. AR SUBMITTED THE P & L A/C, BALANCE-SHEET ALONG WITH ITS SCHEDULE TO DEMONSTRAT E THE UNBILLED 3 ITA NO. 1938 OF 2011 SVEC CONSTRUCTIONS LTD., HYDERABAD. WORK IN PROGRESS ALSO INCLUDES MOBILISATION ADVANCE ON WHICH TAX WAS DEDUCTED AT SOURCE. 5. THE LEARNED DR, ON THE OTHER HAND, STRONGLY SUPP ORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD RIVAL SUBMISSIONS OF THE PARTIES A ND PERUSED THE MATERIALS ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDERS OF THE ITAT, HYDERABAD BENCH SUBMITTED BEFORE US. IT IS SEEN FROM THE ORDERS PASSED IN ITA NO.99/HYD/2010 IN THE CASE OF M/S LIMAK SOMA JV, THE ITAT, HYDERABAD BENCH HAS HELD THAT UNLESS THE ASSESSEE OFFERS THE CORRESPONDING INCOME FOR TA XATION, TDS CANNOT BE GIVEN CREDIT. THE OTHER DECISIONS ALSO A RE IN SIMILAR LINE WHEREIN THE ITAT HAS HELD THAT IN A CASE WHERE THE MOBILISATION ADVANCE HAS BEEN OFFERED TO TAX, THEN THE TDS ON THE MOBILISATION ADVANCE HAS TO BE GIVEN CREDIT. I T IS THE CONTENTION OF THE LEARNED AR THAT THE UNBILLED WORK IN PROGRESS SHOWN IN P & L A/C INCLUDES THE MOBILISATION ADVANC E ON WHICH TAX WAS DEDUCTED AT SOURCE. CONSIDERING THE SUBMISSION S MADE BY THE LD. AR AND ALSO FOLLOWING THE CONSISTENT VIEW O F THE ITAT, WE THINK IT PROPER TO REMIT THE MATTER BACK TO THE FIL E OF THE AO WITH A DIRECTION TO VERIFY WHETHER THE ASSESSEE HAS OFFE RED THE CORRESPONDING RECEIPTS TO TAX FOR WHICH TDS WAS CLA IMED AND ALLOW CREDIT FOR TDS ACCORDINGLY. THE AO SHALL AFFO RD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4 ITA NO. 1938 OF 2011 SVEC CONSTRUCTIONS LTD., HYDERABAD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 10- 8-2012. SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE10TH AUGUST, 2012. COPY TO:- 1) SVEC CONSTRUCTIONS LIMITED, PLOT NO.1014, RAGHAV A RATNA TOWERS, CA LANE, ABIDS, HYDERABAD. 2. DCIT, CIRCLE-3(3), HYDERABAD. 3) THE CIT (A)-IV, HYDERABAD 4) THE CIT CONCERNED, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. JMR* 5 ITA NO. 1938 OF 2011 SVEC CONSTRUCTIONS LTD., HYDERABAD.