ITO 18(1)(4), MUMBAI V. JAGER GAMMON JOINT VENTURE, MUMBAI

ITA 2078/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3820 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Department
• Bench Allotted: J
• Next Hearing Date: 08-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-03-2014
• Court: TRIBUNAL
• Department Lawyers: K MOHANDA S
• Assessee Lawyers: VINOD MODI A R
• Keywords: Additional evidence; Assessment record
• Section: 143(3)

Judgement Text

, , J, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.2078/MUM/2014 ASSESSMENT YEAR: 2008-09 ITO 18(1)(4) R.NO.108, 1 ST FLOOR, PIRMAL CHAMERS, PAREL MUMBAI-400012 / VS. M/S. JAGER GAMMON JOINT VENTURE, GAMMON HOUSE, V.S. MARG, PRABHADEVI, MUMBAI-400 025 ( REVENUE ) ( RES PONDENT ) P.A. NO. AAAAJ3880C REVENUE BY SHRI K MOHANDAS ( D R) RESPONDENT BY SHRI VINOD MODI ( A R) $ % & '( / DATE OF HEARING : 16/02/2016 & '( / DATE OF ORDER: 24/02/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1 6, MUMBAI {(IN SHORT CIT(A)}, DATED 27.12.2013 FOR THE ASSESSMENT YEAR 2008-09, PASSED AGAINST THE ASSESSM ENT JAGER GAMMON JOINT VENTURE 2 ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT, ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE W ITHOUT REMANDING THE MATTER BACK TO AO. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCES IN CONTRAVENTION OF RULE 46A. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.3.30,00,000/-. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI VINOD MODI, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI K MOHANDAS, DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE WAS IN THE BUSINESS OF EXECUTION OF A PROJECT FOR CIVIL WORKS FOR CONSTRUCTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY AO THAT AS PER TDS CER TIFICATE FILED THE ASSESSEE RECEIVED RS.52,15,26,071/- WHERE AS IT DISCLOSED THE GROSS RECEIPTS OF RS.34,62,40,355/- I N ITS RETURN OF INCOME. ON FURTHER ANALYSES, IT WAS NOTED BY THE AO THAT THE ASSESSEE HAS RECEIVED AN AGGREGATE AMOU NT OF RS.3.30 CRORES WHICH HAS BEEN CREDITED UNDER THE HE AD JAGER GAMMON JOINT VENTURE 3 OTHER ADVANCES. IT WAS CONCLUDED BY THE AO THAT ASS ESSEE SHOULD HAVE INCLUDED THIS AMOUNT ALREADY ITS INCOME , THEREFORE, HE HELD THAT ASSESSEE HAS SUPPRESSED HIS GROSS TO THIS EXTENT, AND THEREFORE, A SUM OF RS.3.30 CRO RES WAS ADDED TO THE INCOME OF THE ASSESSEE. 3.1. BEING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFOR E THE LD. CIT(A). 3.2. THE DETAILED SUBMISSIONS WERE MADE ALONG WITH VARIOUS DOCUMENTARY EVIDENCES BEFORE LD. CIT(A) AND AFTER CONSIDERING THE SAME IT WAS FOUND BY THE LD. CIT(A) THAT ADDITION MADE BY THE AO WAS NOT VALID, SINCE THE AS SESSEE HAD INCLUDED THE IMPUGNED SUM IN ITS TURNOVER ON AC CRUAL BASIS AND THEREFORE, THE ADDITION MADE BY THE AO WA S DELETED. 3.3. BEING AGGRIEVED, THE REVENUE FILED AN APPEAL BEFOR E THE TRIBUNAL. 3.4. DURING THE COURSE OF HEARING BEFORE US LD. DR RELI ED UPON THE ORDER OF THE AO AND DREW OUR ATTENTION TO GROUND NOS.1 AND 2 RAISED IN THIS APPEAL BY THE REV ENUE CONTENDING THAT LD. CIT(A) ADMITTED ADDITIONAL EVID ENCES IN CONTRAVENTION OF RULE 46A. HE RELIED UPON THE OR DER OF THE AO WITH RESPECT TO ADDITION MADE IN THE ORDER. PER JAGER GAMMON JOINT VENTURE 4 CONTRA LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT N O ADDITIONAL EVIDENCES WERE SUBMITTED, AND ALL THE EV IDENCES ENCLOSED IN THE PAPER BOOK FILED BY THE AO AS WELL AS LD. CIT(A) EXCEPT PAGE NO.90 WHICH WAS A PLAIN CONFIRMA TION LETTER DATED 24.08.2013 RECEIVED FROM NHPC LTD., WH ICH SIMPLY CLARIFIED AND SUPPORTED THE OTHER INFORMATIO N AND DOCUMENTARY EVIDENCES FILED BEFORE THE AO. ON MERIT S, IT WAS SUBMITTED BY HIM THAT ADDITION MADE BY THE AO W AS FACTUALLY INCORRECT, THERE WAS NO SUPPRESSION OF IN COME. THE ADVANCE RECEIVED WAS NOT TAXABLE AND TOTAL AMOU NT OF INCOME WAS CORRECTLY SHOWN BY THE ASSESSEE IN ITS R ETURN OF INCOME. 3.5. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES, PAPER BOOK FILED BEFORE US AND SUBMISS IONS MADE BY BOTH THE SIDES. WITH REGARD TO THE ADDITION AL EVIDENCES, IT IS NOTED THAT LD. DR WAS NOT ABLE TO POINT OUT WHAT ADDITIONAL EVIDENCES WERE CONSIDERED BY THE LD . CIT(A). WE HAD CONFRONTED BEFORE HIM, PAPER BOOK AL ONG WITH CERTIFICATE FILED BY THE ASSESSEE CERTIFYING T HAT ALL THE DOCUMENTS WERE FILED BEFORE THE AO ALSO EXCEPT CONFIRMATORY LETTER DATED 24 TH AUGUST 2013 FROM NHPC. IT IS NOTED THAT THE SAID CONFIRMATORY LETTER WAS SIMP LY CONFIRMING THE OTHER VARIOUS DETAILS AND DOCUMENTAR Y EVIDENCES SUBMITTED BEFORE THE AO. THE LD. CIT(A) H AS TAKEN INTO ACCOUNT MAINLY OTHER DOCUMENTARY EVIDEN CES JAGER GAMMON JOINT VENTURE 5 WHILE DECIDING THIS ISSUE IN FAVOUR OF THE ASSESSEE . NO COUNTER AFFIDAVIT OR PAPER BOOK HAS BEEN FILED BY T HE LD. DR AND NO ASSESSMENT RECORDS HAVE BEEN PRODUCED BY HIM BEFORE US TO NEGATE THE SUBMISSIONS OF THE ASSE SSEE THAT ALL THE DOCUMENTARY EVIDENCES WERE FILED BEFOR E THE AO. IT IS NOTED BY US THAT NO SERIOUS AND SUBSTANTI VE ARGUMENTS HAVE BEEN MADE BY THE LD. DR IN SUPPORT O F ITS GROUND WITH RESPECT TO ADDITIONAL EVIDENCES IN CONTRAVENTION OF RULE 46A, THUS, WE FIND NO SUBSTAN CE IN THESE GROUNDS AND, THEREFORE, GROUND NOS.1 AND 2 AR E DISMISSED. 4. GROUND NO.3. THIS GROUND IS WITH REGARD TO DELETIO N OF ADDITION BY LD. CIT(A). IT IS NOTED BY US THAT LD. CIT(A) HAS CONSIDERED AND TAKEN INTO ACCOUNT ALL THE DETAILS A ND DOCUMENTARY EVIDENCES BROUGHT BEFORE HIM TO SHOW TH AT NO ADDITION WAS CALLED FOR. CONCLUDING PARA OF LD. CIT(A)S ORDER IS REPRODUCED HEREUNDER FOR READY REFERENCE: THE AOS ORDER THE CONTENTIONS OF THE APPELLANT, A ND MATERIALS ON RECORD HAVE BEEN CONSIDERED. THE AO HA S MADE ADDITION OF OTHER ADVANCES OF RS.3,30,00,000/- RECEIVED BY THE APPELLANT FROM NHPC, (WHILE PLANT ADVANCES AND MATERIAL ADVANCES HAVE BEEN ACCEPTED B Y THE AO AS ADVANCES) STATING THAT THE SAME WAS RECEI VED BY THE APPELLANT WITHOUT DEDUCTION OF TDS AND THE SAME HAS NOT BEEN INCLUDED IN THE APPELLANT'S JAGER GAMMON JOINT VENTURE 6 TURNOVER, AND THAT THE APPELLANT IS FOLLOWING A HYB RID SYSTEM OF ACCOUNTING AS AGAINST A MERCANTILE SYSTEM CLAIMED TO BE FOLLOWED. THE APPELLANT CLAIMS THAT THESE ARE RELEASES OF AD HOC PAYMENTS (PART PAYMENT) AGAINST RESPECTIVE RUNNING ACCOUNT BILLS ARID ESCALATION BILLS RAISED BY THE APPELLANT UPON NHPC AND THE RECEIPTS OF OTHER ADVAN CES WERE ADJUSTED BY NHPC AGAINST RELEASE OF BALANCE PAYMENT UPON FULL AND FINAL SETTLEMENT OF THE SAID BILLS. FURTHER THAT THE SAID AMOUNT HAS BEEN INCLUDED ON ACCRUAL BASIS IN THE TOTAL RECEIPTS OF Z 52,15,26,0 71/- WHICH IS REFLECTED IN TDS CERTIFICATE ISSUED BY NHPC. FURTHER THAT DUE TO AN INADVERTENT AND BONA FIDE MISTAKE, INSTEAD OF ADJUSTING THE RECEIPT OF O THER ADVANCES AGAINST CURRENT LIABILITIES, THE APPELLANT SHOWED THE SAID ADVANCE IN ANOTHER LEDGER ACCOUNT A S 'OTHER ADVANCES' WHICH ARE ACTUALLY NULLIFYING CONT RA ENTRIES, WHICH WERE RECTIFIED IN THE SUCCEEDING PRE VIOUS YEAR. THE APPELLANT HAS DEMONSTRATED BY WAY OF ENTRIES IN LEDGER ACCOUNTS, RECEIPTS REFLECTED IN BANK STATEME NTS AND STATEMENT OF RECONCILIATION OF TURNOVER, THAT IN FA CT THE SAID AMOUNT OF RS. 3.30 CRORES WAS INCLUDED IN THE TURNO VER ON ACCRUAL BASIS, AND ON ACTUAL RECEIPT OF PART PAY MENT THE SAME WAS ADJUSTED TO THE RUNNING BILLS AND ESCALATION BILLS ACCOUNT, ALBEIT THE APPELLANT MADE AN ERROR IN NOT MAKING ADJUSTMENT IN THE SAME ACCOUNT BUT ENTERED THE RECEIPT OF SUCH BILL ADJUSTMENT IN A SEPARATE ACCOUNT WHICH ENDED UP IN THE BALANCE SHEE T AS 'OTHER ADVANCES'. SINCE THE APPELLANT HAS SHOWN THE RECEIPT ON ACCRUAL BASIS FOLLOWING THE MERCANTILE JAGER GAMMON JOINT VENTURE 7 SYSTEM OF ACCOUNTING, THE SAME AMOUNT CANNOT BE ADDED ONCE AGAIN UPON ITS ACTUAL RECEIPT. THE ADDIT ION MADE BY THE AO IS THUS UNJUSTIFIED AND IS DELETED. 4.1. FROM THE AFORESAID ANALYSIS AND FINDINGS OF THE LD . CIT(A). IT IS NOTED THAT THE ADVANCE RECEIVED BY TH E ASSESSEE FROM NHPC HAS BEEN INCLUDED ON ACCRUAL BAS IS IN THE TOTAL RECEIPT AS AND WHEN BILLS WERE RAISED. WE DO NOT FIND HERE ANY CASE OF SUPPRESSION OF RECEIPTS B Y THE ASSESSEE. THE ASSESSEE HAS GIVEN COMPLETE DETAILS T O MATCH FACTS AND FIGURES AND PROVED ON FACTS THAT IMPUGNED AMOUNT OF RS.3.30 CORES WAS INCLUDED IN TH E TOTAL TURNOVER. THE ADDITION MADE BY THE AO HAD APPARENTLY LED TO THE DOUBLE ADDITION, WHICH IS NOT PERMITTED UNDER THE LAW. FACTUAL FINDINGS OF LD. CI T(A) COULD NOT BE CONTROVERTED BY THE LD. DR. WE DO NOT FIND ANYTHING WRONG IN THE ORDER OF LD. CIT(A) AND THERE FORE, SAME IS UPHELD AND GROUND NO.3 OF THE REVENUES APP EAL IS ALSO DISMISSED. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY, 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER $ % MUMBAI; * DATED : 24/ 02/2016 CTX? P.S/. .. JAGER GAMMON JOINT VENTURE 8 #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. , -. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1' 1 $ 2 ( , ) / THE CIT, MUMBAI. 4. 1' 1 $ 2 / CIT(A)- , MUMBAI 5. 56 / 78 , 1' ,( 78'9 , $ % / DR, ITAT, MUMBAI 6. : ; % / GUARD FILE. / BY ORDER, 0 5, / //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI