The DCIT, Circle-9, Ahmedabad V. JMC Sadbhav Joint Venture, Ahmedabad

ITA 2490/AHD/2012

• Counselvise Citation: 249020514 RSA 2012
• Duration Of Justice: 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: M K PATEL

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD . , ! ' ' ' ' # $%, ! BEFORE SHRI A.MOHAN ALANKAMONY,ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.2490/AHD/2012 2. ./ I.T.A. NO.2491/AHD/2012 ( ' '(' ' '(' ' '(' ' '('/ // / ASSESSMENT YEARS : 2008-09 & 2009-10 RESPECTIVELY) DCIT CIRCL3-9 AHMEDABAD / VS. JMC SADBHAV JOINT VENTURE A-204, SHAPATH-IV OPP.KARNAVATI CLUB SG HIGHWAY ROAD AHMEADBAD !) ./*+ ./ PAN/GIR NO. : AAAAJ 4879 P ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / / APPELLANT BY : SHRI O.P.BATHEJA, SR.D.R. -.), 0 / / RESPONDENT BY : SHRI M.K.PATEL, A.R. #'1 0 %2 / / / / DATE OF HEARING : 31/7/2013 3( 0 %2 / DATE OF PRONOUNCEMENT : 02/08/2013 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : BOTH THESE APPEALS BY THE REVENUE ARE DIRECTED AGAI NST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS )-XV, AHMEDABAD (CIT(A) FOR SHORT) BOTH ARE DATED 06/08/2012 PERT AINING TO ASSESSMENT YEARS (AYS) 2008-09 & 2009-10. SINCE COMMON ISSUES ARE I NVOLVED, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.2490 & 2491/AHD/2012 DCIT VS. JMC SADBHAV JOINT VENTURE ASST.YEARS 2008-09 & 2009-10 - 2 - 2. FIRST, WE TAKE UP THE REVENUES APPEAL, I.E.ITA NO.2490/AHD/2012 FOR AY 2008-09. THE REVENUE HAS RAISED THE FOLLOWING G ROUNDS OF APPEAL:- 1) THE LD.COMMISSIOENR OF INCOME-TAX (APPEALS)-XV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISAL LOWANCE OF RS.12,42,716/- MADE ON ACCOUNT OF INTEREST EXPENSES . 2) THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE CLAIM OF TDS, IN RESPECT OF INCOME NOT INCLUDED IN THE INCOME OF THE ASSESSEE F OR THE YEAR UNDER CONSIDERATION. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDAB AD OUGHT TO HAVE UPHELD THE ORDER OF ASSESSING OFFICER. 4) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.CO MMISSIONER OF INCOME-TAX(APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2.1. THE FACTS IN ITA NO.2490/AHD/2012 FOR AY 200 8-09 ARE TAKEN UP AS LEAD CASE. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS COMPLETED VIDE ORDER DATED 26/08/2010, THEREBY THE AO DISALLOWED THE CLAIM OF INTEREST EXPENSES AND ALSO THE CLAIM OF TAX DEDUCTED AT SOURCE. AGAINST THIS , THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS, ALLOWED THE APPEAL. WHILE ALLOWING THE APPEAL, LD.CIT(A) DIREC TED THE AO TO ALLOW THE RETURNED LOSS AND ALSO DIRECTED TO ALLOW THE CLAIM OF TDS AFTER VERIFICATIONS FROM THE HARD-COPIES OF CERTIFICATES WITH APPELLANT AND ALSO CONFIRMATION FROM THE DEDUCTOR IF REQUIRED. 3. GROUND NO.1 RELATES TO DISALLOWANCE OF RS.12,42, 716/- MADE ON ACCOUNT OF INTEREST EXPENSES. SR.DR SHRI O.P.BATH EJA VEHEMENTLY ITA NOS.2490 & 2491/AHD/2012 DCIT VS. JMC SADBHAV JOINT VENTURE ASST.YEARS 2008-09 & 2009-10 - 3 - SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT TH E AO OBSERVED THAT THE ASSESSEE COULD NOT ESTABLISH THE BUSINESS EXPED IENCY FOR INCURRING EXPENSES AND THE DETAILS HAVE BEEN SOUGHT BY THE AO WAS NOT PROVIDED BY THE ASSESSEE. ON THE CONTRARY, LD.COUNSEL FOR T HE ASSESSEE, SHRI M.K.PATEL RELIED ON THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT IN THIS CASE THE NATIONAL HIGHWAY AUTHORITY OF INDIA (NHAI) HAD AWARDED CONTRACT TO THE ASSESSEE AND THE ASSESSEE IN-TURN HAD GIVEN THIS WORK TO THE SUB-CONTRACTOR AND IN ORDER TO EXECUTE THE WORK , THE INTEREST PAID ON MOBILIZATION ADVANCE BY THE ASSESSEE WAS IN TERMS O F THE AGREEMENT EXECUTED WITH THE NHAI. THE LD.COUNSEL FOR THE A SSESSEE SUBMITTED THAT SUCH MONEY WAS GIVEN TO THE SUB-CONTRACTOR FOR EXEC UTION OF THE WORK, THEREFORE THE AO WAS NOT JUSTIFIED IN HOLDING THAT THERE WAS NO BUSINESS EXPEDIENCY. HE RELIED ON THE DECISION OF THE HON BLE APEX COURT RENDERED IN THE CASE OF S.A.BUILDERS LTD. VS. CIT(A PPEALS) (2007) 288 ITR 01 (SC). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE RECORDS AND THE JUDGEMENT CITED. FROM THE RECORDS, IT IS EVIDE NT THAT THE ASSESSEE WAS AWARDED THE CONTRACT-WORK BY NHAI AND IN TERMS OF THE AGREEMENT THE ASSESSEE SUBLETTED THE WORK TO SUB-CONTRACTOR. THE AO HAS OBSERVED THAT THE ASSESSEE COULD NOT ESTABLISH BUSINESS EXPEDIENC Y BY NOT FURNISHING THE REQUISITE DETAILS. HOWEVER, THE LD.CIT(A) HAS GIVEN A FINDING ON FACT THAT THE ASSESSEE WAS AWARDED CONTRACT AND THE MONE Y RECEIVED AS MOBILIZATION ADVANCE WAS ADVANCED TO ONE OF THE CO NSORTIUM PARTNERS, WHO WAS ENTRUSTED THE WORK AS PER ANOTHER CONTRACT, THEREFORE THERE WAS ITA NOS.2490 & 2491/AHD/2012 DCIT VS. JMC SADBHAV JOINT VENTURE ASST.YEARS 2008-09 & 2009-10 - 4 - BUSINESS EXPEDIENCY FOR GIVING SUCH MONEY TO THE CO NSORTIUM PARTNERS. THIS FINDING ON FACT IS UNREBUTTED. 4.1. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THE UNDISPUTED FACT REM AINS THAT THE ASSESSEE WAS AWARDED THE CONTRACT-WORK AND THE WORK WAS FURT HER SUBLETTED TO THE SUB-CONTRACTOR AND THE MONEY GIVEN TO THE SUB-CONTR ACTOR WAS FOR EXECUTION OF WORK. NOTHING HAS BEEN BROUGHT ON REC ORD THAT MONEY WAS GIVEN FOR ANY OTHER PURPOSE. IN THE ABSENCE OF SAM E, LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT THE MONEY WAS ADVANCED FO R BUSINESS PURPOSE. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A), THE SAME IS UPHELD. THEREFORE, GROUND RAISED BY THE REVENU E IS HEREBY REJECTED. 5. SECOND GROUND RELATES TO THE ALLOWANCE OF THE CL AIM OF ASSESSEE IN RESPECT OF TDS. WE FIND THAT THE LD.CIT(A) HAS GI VEN DIRECTION TO THE AO TO VERIFY THE CLAIM OF ASSESSEE IN RESPECT OF TD S FROM HARD-COPIES OF CERTIFICATES AND ALSO CONFIRMATION OF THE DEDUCTOR. SINCE THE LD.CIT(A) AS SUCH HAS NOT GIVEN ANY RELIEF, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS UPHELD. THIS GROUND IS ALSO REJECTED. 6. IN THE RESULT, REVENUES APPEAL, ITA NO.2490/AHD /2012 FOR AY 2008-09 IS DISMISSED. 7. NOW, WE TAKE UP THE REVENUES APPEAL, I.E. ITA NO.2491/AHD/2012 FOR AY 2009-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NOS.2490 & 2491/AHD/2012 DCIT VS. JMC SADBHAV JOINT VENTURE ASST.YEARS 2008-09 & 2009-10 - 5 - 1) THE LD.COMMISSIOENR OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWA NCE OF RS.1,63,35,068/- MADE ON ACCOUNT OF INTEREST EXPEN SES. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDAB AD OUGHT TO HAVE UPHELD THE ORDER OF ASSESSING OFFICER. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.CO MMISSIONER OF INCOME-TAX(APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 8. SINCE THE FACTS AND CIRCUMSTANCES ARE SIMILAR TO TH E FACTS AND CIRCUMSTANCES IN REVENUES APPEAL IN ASSESSEES OWN CASE IN ITA NO.2490/AHD/2012 FOR AY 2008-09(SUPRA), FOLLOWING THE SAME REASONING, WE HEREBY DISMISS THIS APPEAL OF THE REVENUE. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE SD/- SD/- (. ) (# $%) ! ! ( A. MOHAN ALANKAMONY ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 02/ 08 /2013 72.., '.../ T.C. NAIR, SR. PS 4 0 -%8 98(% 4 0 -%8 98(% 4 0 -%8 98(% 4 0 -%8 98(%/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. % #: / CONCERNED CIT 4. #:() / THE CIT(A)-XV, AHMEDABAD 5. 8'$; -% , , / DR, ITAT, AHMEDABAD 6. ;<' =1 / GUARD FILE. 4# 4# 4# 4# / BY ORDER, .8% -% //TRUE COPY// > >> >/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD