Dy. Commissioner of Income Tax , Circle-15(1), Hyderabad V. Maatha Projects LLP, Hyderabad

ITA 2258/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5536 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 25-08-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 05-12-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (T HROUGH VIRTUAL CONFERENCE) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER IT A NO. 2258 /H/20 1 8 ASSESSMENT YEAR: 2 0 1 5 - 1 6 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 15(1), HYDERABAD. VS. MAATHA PROJECTS LLP, HYDERABAD. PAN AAZFM 4891Q (APPELLANT) (RESPONDENT) REVENUE BY: SHRI ROHIT MUJUMDAR ASSESSEE BY: S HRI A.V. RAGHURAM DATE OF HEARING: 25 /0 8 /2021 DATE OF PRONOUNCEMENT: 20 /0 9 /2021 O R D E R PER L.P. SAHU, A.M. : TH IS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST CIT(A) 7, HYDERABAD S ORDER DATED 28 / 0 9 / 20 1 8 FOR AY 20 1 5 - 1 6 INVOLVING PROCEEDINGS U/S 143( 3 ) OF THE INCOME TAX ACT, 1961 ; IN SHORT THE ACT , ON THE FOLLOWING GROUNDS OF APPEAL: 1 THE LD. CIT(A) ERRED IN LAW ON FACTS OF THE CASE. I TA NO. 2258 /HYD /20 1 8 MAATHA PROJECTS LLP , HYD. : - 2 - : 2. THE LD. CIT(A) - 7, HYDERABAD HAD ERRED IN TREATING THE RECEIPTS AS ADVANCES WITHOUT ANY CORROBORATIVE EVIDENCE TO SUPPORT THE ARGUMENT OF THE ASSESSEE. 3. THE LD. CIT(A) ERRED IN APPRECIATING THAT APART FROM GIVING 26AS RECONCILIATION THE ASSESSEE HAS NOT SUBSTANTIATED THE ACTUAL WORK DONE AND THE BASIS FOR TREATING THE RECEIPT AS ADVANCE. 4. ANY OTHER GROUND(S) THAT MAY BE URGED AT THE TIME OF HEARING. 2 . BRIEFLY, THE FACTS OF THE CASE ARE THAT T HE ONLY ISSUE ARISING IN THIS CASE IS WHETHER THE GROSS RECEIPTS DISCLOSED AS PER THE SERVICE TAX RETURN FILED CAN BE TREATED AS GROSS RECEIPTS / WORK DONE FOR THE PURPOSE OF COMPUTATION OF INCOME AS PER INCOME TAX. THE ASSESSING OFFICER HELD THAT THE APPE LLANT HAD DECLARED AN AMOUNT OF RS.48,21,46, 000 / - AS SALES FOR THE PURPOSE OF SERVICE TAX RETURN. HOWEVER, THE APPELLANT HAS RECOGNIZED REVENUE OF RS.11,15,48, 1 33/ - FOR THE PURPOSE OF COMPUTATION OF INCOME TAX. THE ASSESSING OFFICER OBSERVED THAT THE TAX D EDUCTOR TO WHOM ASSESSEE WAS PROVIDING SERVICES HAS DEDUCTED TAX OF RS.96,42,900/ - ON THE GROSS AMOUNT OF RS. 48,21,45, 000 / - . UNDER THE CIRCUMSTANCES, THE ASSESSING OFFICER TREATED THE DIFFERENCE OF RS.37,05,97,867/ - (I.E. RS .48,21,46, 000 - RS.11,15,48,133) AS UN - BOOKED GROSS RECEIPTS AND ESTIMATED PROFIT AT 8% ON RS. 37,05,97,867/ - , WHICH COMES TO RS. 2,96,47,830/ - AND ADDED THE SAME TO THE RETURNED INCOME OF THE FOR THE IMPUGNED AY. I TA NO. 2258 /HYD /20 1 8 MAATHA PROJECTS LLP , HYD. : - 3 - : 3. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE DECISIONS OF ITAT, MUMBAI AND ITAT HYDERABAD IN THE CASE OF M/S R&A CORPORATE CONSULTANTS INDIA PVT. LTD. VS. ACIT, HYDERABAD IN ITA NO. 222/ H YD/2012 FOR AY 2008 - 09 BY HOLDING THAT THE ADDITION MADE BY TH E AO ON THE BASIS OF DIFFERENCE IN GROSS RECEIPTS AS PER SERVICE TAX AND THE INCOME RECOGNIZED AS PER THE IT RETURN FILED IS NOT PROPER . 4. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE THE ITAT. 5. BEFORE US, THE LD. DR OF THE ASSES SEE SUBMITTED THAT THE CIT(A) ERRED IN APPRECIATING THAT APART FROM GIVING 26AS RECONCILIATION THE ASSESSEE HAS NOT SUBSTANTIATED THE ACTUAL WORK DONE AND THE BASIS FOR TREATING THE RECEIPT AS ADVANCE. HE, THEREFORE, SUBMITTED THAT THE AO HAS RIGHTLY MADE THE ADDITION. 6. THE LD. AR, ON THE OTHER HAND RELIED ON THE ORDER OF CIT(A) AND SUBMITTED THAT THE SERVICES ARE NOT PERFORMED IN THE CURRENT AY AND TILL THE PERFORMANCE OF THE SERVICE BY THE ASSESSEE, THE ASSESSEE COULD NOT BE SAID TO BE RECEIVED THE AM OUNT ON ACCRUAL AS THE ASSESSEE COULD NOT EXERCISE ITS DOMINION OVER THE RECEIPT AND THE IMPUGNED AMOUNTS SHOULD BE TAXED IN THE YEAR IN WHICH THE ASSESSEE RENDERS I TA NO. 2258 /HYD /20 1 8 MAATHA PROJECTS LLP , HYD. : - 4 - : SERVICE TO THE PAYEE AND, THEREFORE, ISSUE OF TAX OF SUCH IMPUGNED AMOUNT CANNOT BE DONE IN THE YEAR UNDER CONSIDERATION. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES . FROM THE ORDER OF AO, WE FIND THAT THE ASSESSEE HAS RAISED SALES BILLS, BUT, IN THE RE VENUE ACCOUNT CERTAIN P ERCENTAGE HAS BEEN OFFERED AS REVENUE FOR THE YEAR UNDER CONSIDERATION. THE AR OF THE ASSESSEE SUBMITTED THAT THE BALANCE WAS SHOWN AS ADVANCE FROM CUSTOMERS AND IN THE SUBSEQUENT YEAR, IT HAS BEEN OFFERED FOR TAXATION. WE FIND THAT NEITHER THE AO NOR CIT(A) VERIFIED THIS FACT. THE LD. AR HAS ALSO NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE ITS CLAIM WITH REGARD TO ADVANCE FRO M CUSTOMERS. THEREFORE, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT AND PROPER TO REMIT THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO RE - DECIDE THE ISSUE WITH COGENT MATERIAL S IN RESPECT OF ADVANCES RECEIVED BY THE ASSESSEE FROM THE CUSTOMERS AND WHET HER IT HAS BEE N OFFERED AS INCOME IN THE RESPECTIVE YEARS WITH COMPLETE RECONCILIATION , AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE TREATED AS ALLOWED FOR STATISTIC AL PURPOSES. I TA NO. 2258 /HYD /20 1 8 MAATHA PROJECTS LLP , HYD. : - 5 - : 8. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER , 2021 . SD/ - SD/ - ( S.S. GODARA ) (L . P . SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDE RABAD, DATED : 21 ST SEPTEMBER , 20 2 1 . K V C OPY TO : 1 ACIT, CIRCLE - 15(1), 5 TH FLOOR, D BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD. 2 MAATHA PROJECTS LLP, UNIT NO. 2, 1 ST FLOOR, INDUSTRIAL PARK , UPPAL IDA, HYDERABAD 500 039 3 C I T(A) 7, HYDERABAD. 4 PR. CIT - 7 , TIRUPATI 5 ITAT, DR, HYDERABAD. 6 GUARD FILE.