ACIT-1, DURG(CG) V. M/S KULKKARNI & SAHU ASSOCIATES, BHILAI(CG)

ITA 209/BIL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94001 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 16-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M DAS
• Assessee Lawyers: D K DATTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER IT A NO. 209 / BLPR./2011 ( ASSESSMENT YEAR : 20 08 09 ) ASSTT. COMMISSIONER INCOME TAX 1 32/32 BUNGALOWS BHILA I DISTRICT DURG (C.G) 490 006 APPELLANT V/S M/S. KULKARNI & SAHU ASSOCIATES 20 A/10, NEHRU NAGAR (WEST), BHILAI PAN AAEFK9416C . RESPONDENT IT A NO.210 / BLPR./2011 ( ASSESSMENT YEAR : 20 08 09 ) ASSTT. COMMISSIONER INCOME TAX 1 32/32 BUNGALOWS BHILAI DISTRICT DURG (C.G) 49 0 006 APPELLANT V/S M/S. AMAR BUILDERS NEAR JAINUM PALACE MAHESH NAGAR, DURG PAN AAJFA0907H . RESPONDENT M/S. KULKARNI & SAHU ASSOCIATES M/S. AMAR BUILDERS 2 IT A NO.239 / BLPR./2011 ( ASSESSMENT YEAR : 20 09 10 ) ASSTT. COMMISSIONER INCOME TAX 1 32/32 BUNGALOWS BHILAI DISTRIC T DURG (C.G) 490 006 APPELLANT V/S M/S. KULKARNI & SAHU ASSOCIATES 20 A/10, NEHRU NAGAR (WEST), BHILAI PAN AAEFK9416C . RESPONDENT REVENUE BY : SHRI S.M. DAS ASSESSEE BY : SHRI D.K. DATTA DATE OF HEARING 16 .06.2015 DATE OF ORDER 19 .06.2015 O R D E R PER SHAMIM YAH YA, A. M. T H E S E APPEAL S BY THE REVENUE ARE EMANATING FROM THE ORDER S DATED 8 TH AUGUST 2011 , PASSED BY THE LEARNED CIT(A), RAIPUR, IN THE CASE OF M/S. KULKARNI & SAHU ASSOCIATES AND M/S. AMAR BUILDERS , FOR THE ASSESSMENT YEAR 20 08 09 AND ORDER DATED 28 TH SEPTEMBER 2011, PASSED BY THE LEARNED CIT(A), RAIPUR, IN THE CASE OF M/S. AMAR BUILDERS, FOR THE ASSESSMENT YEAR 2009 10 RESPECTIVELY. SINCE THE SOLE ISSUE RAISED IN ALL THESE APPEALS IS COMMON, THEREF ORE, AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. M/S. KULKARNI & SAHU ASSOCIATES M/S. AMAR BUILDERS 3 2. THE ONLY DISPUTE IN THESE APPEALS IS THAT THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF PROVISION MADE FOR ROAD REPAIR. 3. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE (M/S. KULKARNI & SAHU ASSOCIAT ES) FOR THE EARLIER ASSESSMENT YEAR. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THIS SUBMISSION. HOWEVER, HE CLAIMED THAT THE APPELLATE AUTHORITIES HAVE NOT PROPERLY APPRECIATED THE FACTS. 4. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE ASSESSEES, IN THE PRESENT CASE, ARE ENGAGED IN THE BUSINESS OF ROAD AND CIVIL CONTRACTOR REGISTERED WITH PUBLIC WORKS DEPARTMENT OF GOVERNMENT OF CHHATTISGARH. AS PER THE TERMS OF CONTRACT, THE ASSESSEE IS REQUIRED TO REPAIR AND MAINTAIN THE ROAD CONSTRUC TED BY THEM FOR A CERTAIN NUMBER OF YEARS. TO ENFORCE COMPLIANCE, THE ASSESSEES WERE MADE TO FURNISH PERFORMANCE SECURITY IN THE SHAPE OF BANK GUARANTEE @ 15% OF THE CONTRACT RECEIPT. THE ASSESSEE ACCORDINGLY MADE A PROVISION OF 15% OF THE CONTRACT RECEIPT S AS A WARRANTY BEING PROVISION FOR ROAD REPAIR. THE ABOVE PROVISION SO MADE WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT IT WAS A UNCERTAIN LIABILITY. HOWEVER, THE SAME WAS ALLOWED IN APPELLATE PROCEEDINGS BY THE LEARNED CIT(A), THE INCOME M/S. KULKARNI & SAHU ASSOCIATES M/S. AMAR BUILDERS 4 T AX APPELLATE TRIBUNAL AND THE HON'BLE JURISDICTIONAL HIGH COURT. HENCE, WE DO NOT FIND ANY REASON TO DEPART FROM T HE PRECEDENCE AS THERE HAS BEEN NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THERE IS NO DOUBT THAT THE ROADS DO GET DETERIORATED WIT H PASSAGE OF TIME AND REPAIRS AND MAINTENANCE IS REQUIRED. A PROVISION IN THIS REGARD WHICH IS EQUIVALENT TO THE PERFORMANCE GUARANTEE BEING INSISTED BY THE GOVERNMENT AUTHORITIES CANNOT BE SAID TO BE AN UN ASCERTAINED LIABILITY. THIS VIEW IS DULY SUPPORTED BY THE DECISION DATED 12 TH NOVEMBER 2013, OF THE HON'BLE JURISDICTION HIGH COURT RENDERED IN A BATCH OF CASES INCLUDING THAT OF THE ASSESSEE (M/S. KULKARNI & SAHU ASSOCIATES) IN THIS CASE. THE HON'BLE JURISDICTIONAL HIGH COURT HAS EXPOUNDED AS UNDER: 12. I N THE AFORESAID TWO CASES THAT ARE BASIS OF DECIDING THE CASES UNDER APPEAL, THE TRIBUNAL HAD TAKEN INTO CONSIDERATION THE POST EXPENSES MADE BY THE A SSESSEES AND ON THE BASIS OF THOSE EXPENSES, IT CAME TO THE CONCLUSION THAT THESE ESTIMATES WERE CORRECT E STIMATES OF THE PROBABLE LIABILITIES. IT IS FOR THIS REASON, THE LIABILITIES WERE HELD TO BE ASCERTAINED WITH REASONABLE CERTAINTY AND WAS HELD TO BE CAPABLE OF BEING THE LIABILITY AT PRESENT. 12. THE SUPREME COURT IN THE CASE OF M/S. ROTORK CONTROLS INDI A (P) LTD. V/S COMMISSIONER OF INCOME TAX, CHENNAI (34 ITR 62), OBSERVED THAT: 12 FOR A LIABILITY TO QUALIFY FOR RECOGNITION THERE MUST BE NOT ONLY PRESENT OBLIGATION BUT ALSO THE PROBABILITY OF AN OUTFLOW OF RESOURCES TO SETTLE THAT OBLIGATION. 13 . IT IS A COMMON KNOWLEDGE THAT THE ROADS GET DETERIORATED WITH THE PASSAGE OF TIME AND REPAIRS AND MAINTENANCE IS REQUIRED. THE TRIBUNAL HAS HELD THAT THE LIABILITY FOR MAINTENANCE AND REPAIRS OF THE M/S. KULKARNI & SAHU ASSOCIATES M/S. AMAR BUILDERS 5 ROAD IS ASCERTAINED WITH REASONABLE CERTAINTY AND WAS A LIABILITY IN PRESENT TIME. THERE WAS NO DIFFERENCE IN THE PRECEDING YEARS. IN VIEW OF THIS, THE ORDER OF THE TRIBUNAL CANNOT BE FAULTED. RESPECTFULLY FOLLOWING THE ABOVE PRECEDENCE FROM THE HON'BLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE LEARNED CIT(A) AND THE SAME IS UPHELD. THE GROUND RAISED BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N 19 TH JUNE 2015 SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER RAI PUR , DATED : 19 TH JUNE 2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, BILASPUR CITY CONCERNED ; (5) THE DR, ITAT, RAIPUR (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY SR. PRIVATE SECRETARY / A SS ISTANT REGISTRAR ITAT, RAIPUR