DCIT, CHENNAI V. Alpha Foundation Pvt Ltd., CHENNAI

ITA 2227/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8667 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2015
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVASJ
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T.A.NO.2227/MDS./2015 / ASSESSMENT YEAR : 2010-11 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(1), CHENNAI 600 034. VS. M/S.ALPHA FOUNDATION PVT LTD., ALPHA DAFFODIL, PLOT NO.38,AGS COLONY, 3 RD MAIN ROAD, KOTTIVAKKAM, CHENNAI 600 041. [PAN AAACA 7343 R ] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.SHIVA SRINIVAS,JCIT,DR /RESPONDENT BY : MR.S.SRIDHAR,ADVOCATE / DATE OF HEARING : 25 - 07 - 201 6 / DATE OF PRONOUNCEMENT : 29 - 07 - 2016 / O R D E R PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, CHENNAI DAT ED 20.08.2015 FOR THE ASSESSMENT YEAR 2010-11. 2. THE MAIN GRIEVANCE OF THE REVENUE IN THIS APPEA L IS THAT THE LD.CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE A DDITION HOLDING THAT THE ASSESSEE HAS OFFERED THE ENTIRE INCOME OF ` 53,91,775/- IN TWO YEARS VIZ.2009-10 & 2010-11. ITA NO.2227/MDS./15 :- 2 -: 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACTOR AND PROMOTER OF RE SIDENTIAL AND COMMERCIAL BUILDINGS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 ON 06.10.2010 ADMITTING TOT AL INCOME OF ` 34,74,557/- AND THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. SUBSEQUENTLY, THE ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 08.03.2013 DETERMINING THE TOTAL INCOME AT ` 74,35,358/- WHEREIN THE LD. ASSESSING OFFICER MADE THE ADDITION OF ` 38,28,320/- DUE TO TDS MISMATCH AS PER FORM 26AS. 3.1. THE ISSUE UNDER DISPUTE IS THAT THE AO MADE A N ADDITION OF ` 38,28,320/- REPRESENTING THE DIFFERENCE IN THE TOTA L RECEIPTS AS PER 26AS FROM M/S.SREE LAKSHMIRAM WIRES. AS PER FORM-26 AS, M/S.SREE LAKSHMIRAM WIRES HAS PAID A SUM OF ` 50,78,320/- AND DEDUCTED THE TDS OF ` 1,21,680/-. THE ASSESSEE HAS ADMITTED A SUM OF ` 12,50,000/- IN THE RETURNED INCOME. THEREFORE, THE AO ADDED THE DIFFERENCE OF AMOUNT OF ` 38,28,320/- TO THE RETURNED INCOME OF ASSESSEE. SI NCE THE ASSESSEE HAS CLAIMED THE CREDIT FOR ENTIRE TDS AND HAS NOT OFFERED THE DIFFERENTIAL AMOUNT DURING THE YEAR UNDER CONSIDERA TION, THE AO ADDED THE AMOUNT OMITTED TO OFFER THE FEE RECEIVED FROM M /S.SREE LAKSHMIRAM WIRES AMOUNTING TO ` 38,28,320/-. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, THE ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A). ITA NO.2227/MDS./15 :- 3 -: 3.2 ON APPEAL, THE LD.CIT(A) DELETED THE ADDITION HOLDING THAT THE ENTIRE AMOUNT PAID BY M/S.SREE LAKSHMIRAM WIRES WAS OFFERED TO INCOME IN TWO CONSEQUETIVE YEARS I.E FOR THE YEAR ENDING 31.03.2009 & 31.03.2010. AGGRIEVED BY THE ORDER OF LD.CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US, LD.D.R ARGUED THAT AS PER SECTION 19 9 OF THE ACT, THE ASSESSEE SHOULD HAVE ADMITTED THE ENTIRE AMOUNT AS PER TDS CERTIFICATE IN THE ASSESSMENT YEAR 2010-11, SINCE T HE ASSESSEE HAS CLAIMED THE TDS CREDIT FOR THE YEAR ENDING 2010. FU RTHER, THE LD.D.R SUBMITTED THAT AS PER THE PROVISIONS OF THE SECTION 199 READ WITH RULE 37BA(3)(I) CREDIT FOR THE TDS SHALL BE GIVEN FOR TH E ASSESSMENT YEAR IN WHICH SUCH INCOME IS ASSESSABLE. 5. ON THE OTHER HAND, LD.A.R SUBMITTED THAT THERE WAS NO MOBILIZATION ADVANCE RECEIVED BY THE ASSESSEE FROM M/S.SREE LAKSHMIRAM WIRES AS STATED IN THE ASSESSMENT ORDER. THE ENTIRE AMOUNT RECEIVED FROM THE SAID PARTY WAS OFFERED AS INCOME OF ASSESSEE IN THE ASSESSMENT YEAR 2009-10 & 2010-11. FURTHER, LD.A.R STATED THAT THE ASSESSEE HAS RECEIVED THE AMOUNT O F ` 41,41,775/- FOR THE YEAR ENDING 31.03.2009 & ` 12,50,000/- FOR THE YEAR ENDING 31.03.2010 FROM M/S.SREE LAKSHMIRAM WIRES AND IT HAD NOT DEDUCTED THE TDS FOR THE PERIOD ENDING 2009 AND THE ASSESSE E HAS NOT CLAIMED ANY CREDIT FOR ASSESSMENT YEAR 2009-10. FOR ASSESSM ENT YEAR 2010-11, ITA NO.2227/MDS./15 :- 4 -: THE ASSESSEE HAD RECEIVED ` 12,50,000/- AND THE DEDUCTOR HAS DEDUCTED THE TDS OF ` 1,21,680/-- WHICH WAS CLAIMED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010-11. THE BREAKUP OF THE AMO UNT RECEIVED FROM M/S.SREE LAKSHMIRAM WIRES, INCOME OFFERED BY T HE ASSESSEE, TDS DEDUCTED AND CLAIMED WAS FURNISHED BY THE ASSES SEE AS UNDER:-- YEAR ENDING GROSS AMOUNT RECEIVED GROSS AMOUNT AS PER FORM 26AS TDS EFFECTED AS PER FORM 26AS INCOME OFFERED BY THE ASSESSEE 31.03.2009 41,41,775/ - NIL NIL 41,41,775/ - 31.03.2010 12,50,000/ - 50,78,320 1,21,680 12,50,000/ - TOTAL 50,78,320 1,21,680 53,91,775 LD.A.R ARGUED THAT SINCE THE ASSESSEE HAD ADMITTED THE ENTIRE AMOUNT RECEIVED FROM THE SAID PARTY AS PER THE DETAILS GIV EN ABOVE, NO ADDITION IS REQUIRED. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WHILE DELETING THE ADDITION, LD.CIT(A) HAD BROUGHT OUT THE COMPLETE FACTS IN PARA 4.2 OF THE CIT(A)S ORDER AS UNDER:- 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS IN ISSUE , THE VIEW TAKEN BY THE AO, THE ARGUMENTS ADVANCED BY THE APPE LLANT AND MATERIAL ON RECORD. THE APPELLANT IS A CIVIL CONTRA CTOR AND PROMOTER OF RESIDENTIAL AND COMMERCIAL BUILDINGS. T HE ISSUE UNDER DISPUTE IS IN REGARD TO THE INCOME FROM SREE LAKSHMIRAM WIRES WHICH THE APPELLANT CLAIMS TO HAVE ACCOUNTED FOR IN FULL. IT IS THE APPELLANTS PLEA THAT NO PORTION OF THE A MOUNT RECEIVED FROM M/S SREE LAKSHMIRAM WIRES WAS TREATED AS MOBIL ISATION ADVANCE AND THE ENTIRE SUM WAS ACCOUNTED FOR AS INC OME ITA NO.2227/MDS./15 :- 5 -: CONTRARY TO THE INFERENCE DRAWN BY THE AC. THE ENTI RE INCOME WAS RECEIVED IN TWO YEARS FOR THE YEAR ENDING 31.3. 2009 AND 31.3.2010. FOR THE YEAR ENDED 31.3.2009 THE APPELLA NT HAD RECEIVED .A SUM OF RS.41 ,41 ,775 AND HAD OFFERED T HE SAME THEREIN. HOWEVER, ON THIS AMOUNT NO TDS WAS EFFECTE D BY SREE LAKSHMIRAM WIRES. FOR THE YEAR ENDED 31 .3.2010 THE BALANCE SUM OF RS.12,50,000 WAS OFFERED AS INCOME WHEREIN T DS WAS EFFECTED FROM SREE LAKSHMIRAM WIRES OF RS.1 ,21 ,68 0. THUS THE AGGREGATE AMOUNT RECEIVED FROM SREE LAKSHMIRAM WIRES DURING BOTH THE PERIODS AGGREGATED RS.53,91,775 (RS.41,41,775 RS.12,50,000) ON WHICH TDS EFFECTED AS PER 26AS WAS RS.1,21,680. THE GROSS AMOUNT AS PER 26AS WAS ALSO REFLECTED AT RS.50,78,320 AS AGAINST ACTUAL AM OUNT OF RS.53,91,775 ON ACCOUNT OF THE FACT THAT M/S SREE L AKSHMIRAM WIRES DID NOT EFFECT TDS ON THE BALANCE AMOUNT OF RS.3,13,455. THEREFORE THE APPELLANT HAD OFFERED TH E ENTIRE INCOME OF RS.53,91,775 IN TWO YEARS AND CLAIMED THE FULL TDS OF RS.1,21,680 WHEN IT WAS EFFECTED. THESE WERE VER IFIABLE FROM LEDGER EXTRACTS AND OTHER MATERIAL ON RECORD. THE INFERENCE DRAWN BY THE AC IN COMING TO THE CONCLUSI ON THEREFORE CANNOT BE SUSTAINED. THE AC IS DIRECTED T O DELETE THE ADDITION. THIS GROUND OF APPEAL IS ALLOWED. 7. THE ASSESSEE HAS RECEIVED A SUM OF ` 53,91,775/- AND ADMITTED THE SAME AS INCOME IN TWO ASSESSMENT YEARS I.E FOR THE YEAR ENDING 31.03.2009 & 31.03.2010. AGAINST THE AMOUNT OF ` 50,78,320/- REPORTED IN FORM-26AS, THE ASSESSEE HAS ADMITTED AN AMOUNT OF ` 53,91,775/- AS PER THE DETAILS GIVEN IN THE ABOVE T ABLE. THE ASSESSEE HAS NOT CLAIMED TDS FOR ASSESSMENT YEAR 2009-10, SI NCE THE DEDUCTOR ITA NO.2227/MDS./15 :- 6 -: HAS NOT DEDUCTED THE TDS. SINCE THE ASSESSEE IS FOL LOWING THE MERCANTILE SYSTEM OF ACCOUNTING, THE ASSESSEE HAS O FFERED THE INCOME RIGHTLY AS AND WHEN THE INCOME ACCRUED. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A) AND CONFIR M THE ORDER OF LD.CIT(A). HENCE, THE GROUNDS RAISED BY THE REVENUE STANDS REJECTED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON 29 TH JULY, 2016, AT CHENNAI. SD/ - SD/ - (N.R.S. GANESAN) JUDICIAL MEMBER ( D.S.SUNDER SINGH ) ACCOUNTANT MEMBER !' / CHENNAI #$ / DATED: 29 TH JULY, 2016 K S SUNDARAM $%&& '(&)( / COPY TO: & 1 . / APPELLANT 3. & *&+, / CIT(A) 5. (-.& / / DR 2. / RESPONDENT 4. & * / CIT 6. .0&1 / GF