D.C.I.T.CC - XXI,Kol., Kolkata V. M/s TCL-MMPL Consortium, Burdwan

ITA 2547/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4464 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 27-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 06-11-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Assessee Lawyers: SUBASH AGARWAL SR LD AR T H
• Keywords: Additional evidence
• Section: 142(1)

Judgement Text

ITA NO. 2547/KOL/13 M/S. TCL-MMPL CONSORTIUM 1 IN THE INCOME TAX APPELLATE TRIBUNAL,B BENCH, KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBE R AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 2547/KOL/2013 A.Y: 2010-11 D.C.I.T.CEN.CIR-XXI, VS M/S. TCL-MMPL CONSORT IUM KOLKATA PAN: AABAT 6742L (APPELLANT) (RESPONDENT) APPEARANCES BY: SHRI RAJAT KUMAR KUREEL, JCIT, SR. D.R FOR THE REVENUE SHRI SUBASH AGARWAL, SR. ADVOCATE, LD.AR FOR T HE ASSESSEE DATE OF CONCLUDING THE HEARING : 27-07- 2016 DATE OF PRONOUNCEMENT : 23 -09-2016 O R D E R SHRI S.S. VISWANETHRA RAVI, JM :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 26-08-2013 PASSED BY THE COMMISSIONER OF INCO ME TAX(APPEALS), ASANSOL FOR THE ASSESSMENT YEAR 20010 -11. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF WIP HOLDING THAT IT WAS DOUBLE ADDI TION BY ADMITTING ADDITIONAL EVIDENCE SUBMITTED AT THE TIME OF REBUTTAL BY THE ASSESSEE IN VIOLATION TO PROVISIONS OF RULE- 46A OF IT, RULES, WITHOUT REMANDING THE MATTER BACK TO THE ASS ESSING OFFICER. ITA NO. 2547/KOL/13 M/S. TCL-MMPL CONSORTIUM 2 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) ERRED IN DELETING THE ADDITION MADE ON AC COUNT OF DISALLOWANCE OF WIP WITHOUT PROPERLY DESCRIBING HOW THE RUNNING BILL AMOUNT ON ACCRUAL BASIS TREATED BY THE AO AS CONTRACTUAL RECEIPT AFTER BEING DISALLOWED FROM WIP WAS A DOUBLE ADDITION. 3. THE ONLY EFFECTIVE GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE CIT-A IS JUSTIFIED IN DELETING THE A DDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE ON ACCOUNT OF WIP [WORK-IN- PROGRESS] WITHOUT AFFORDING ADEQUATE OPPORTUNITY T O THE REVENUE. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N AOP I.E ASSOCIATION OF PERSONS ENGAGED IN THE BUSINESS OF C OPPER MINING ON CONTRACT AND SUB-CONTRACT BASIS, WHICH SP READ OVER TO REMOTE PLACES IN THE STATE OF RAJASTHAN AT KHETR I AND KOLIHAN COPPER MINES SITES. THE ASSESSEE FILED ITS RETURN ELECTRONICALLY DISCLOSING THE TOTAL INCOME AT RS. N IL ALONG WITH TAX AUDIT REPORT. 5. UNDER SCRUTINY, NOTICES U/S. 143(2) AND 142(1) O F THE ACT WERE ISSUED. AGAINST WHICH THE LD.AR OF THE ASSESSE E APPEARED AND FURNISHED REQUIRED DETAILS. 6. DURING SUCH PROCEEDINGS THE AO FOUND THAT THE AS SESSEE CLAIMED RS.4,55,98,734.86/- TOWARDS WORK-IN-PROGRES S HEREAFTER AS WIP IN SHORT (RS.1,55,10,359.97 FOR KHETRI SITE AND RS.3,00,88,374.89 FOR KOLIHAN SITE). THE AO ON PERU SAL OF RUNNING ACCOUNT BILLS AS SUBMITTED BY THE ASSESSEE, HE WAS OF THE VIEW THAT THE ABOVE AMOUNTS WERE NOT PART OF WIP AS THE ASSES SEE WAS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING, THER EBY HE ADDED ITA NO. 2547/KOL/13 M/S. TCL-MMPL CONSORTIUM 3 THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE ON TH E GROUND THAT THE ASSESSEE FAILED TO MENTION SAID AMOUNTS IN ITS BOOKS OF ACCOUNT AS CONTRACT RECEIPTS IN FY 2009-10 RELEVANT TO YEAR UNDER CONSIDERATION. 7. AGGRIEVED BY SUCH ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT-A AND CONTENDED BEFORE HIM THAT THE ASSESSEE PRODUCED THE BOOKS OF ACCOUNT AND OTHER RE LEVANT DOCUMENTS RELATING TO THE IMPUGNED ADDITION. THE AO DID NOT POINT OUT ANY DEFECT IN THE BOOKS SUBMITTED BY THE ASSESS EE AND ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF AS THE ASSES SEE WAS BEING FOLLOWING THE MERCANTILE / ACCRUAL SYSTEM OF ACCOUN TING. FURTHER, CONTENDED THAT IT WAS A DOUBLE ADDITION AS THE ASSE SSEE ALREADY PAID THE TAX ON SUCH AMOUNT IN THE FY 2009-10. HOWE VER, THE CIT- A AFTER CONSIDERING THE VARIOUS SUBMISSIONS OF THE ASSESSEE HAS DELETED THE IMPUGNED ADDITION BY OBSERVING AS UNDER :- 7. UPON GOING THROUGH THE EVIDENCE BROUGHT TO RECO RD, I FIND THAT THE ASSESSING OFFICER HAS ADDED TO INCOME WHAT HAS ALREADY BEEN INCLUDED IN PROFIT AND LOSS ACCOUNT. THIS IS A CLEAR CASE OF DOUBLE ADDITION. FURTHER THE MATTER OF ADDITION OF WIP COMES WHEN A PARTICULAR WORK HAS BEEN COMPLETED BUT NOT REPORT ED IN PROFIT AND LOSS ACCOUNT OR WHEN EXPENDITURE IS BOOKED IN P ROFIT AND LOSS ACCOUNT OF WHICH CORRESPONDING WIP IS NOT REPORTED IN PROFIT AND LOSS ACCOUNT. THE SITUATION HERE IS NOT EITHER OF T HE TWO. HENCE I DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION . THIS GROUND IS ALLOWED. 8. AGGRIEVED BY THE ORDER OF THE CIT-A, THE REVENUE IS IN APPEAL BEFORE US CHALLENGING THE ORDER OF THE CIT-A BY RAISING THE ABOVE MENTIONED GROUNDS OF APPEAL. ITA NO. 2547/KOL/13 M/S. TCL-MMPL CONSORTIUM 4 9. BEFORE US THE LD. DR SUBMITS THAT GROUND NOS. 1 & 2 OF REVENUES APPEAL ARE INTER-LINKED AND ARGUED THAT T HE CIT-A HAS GIVEN RELIEF TO THE ASSESSEE WHILE DELETING THE IMP UGNED ADDITION MADE BY THE AO ON THE BASIS OF ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT-A WITHOUT AFFORDING ANY OPP ORTUNITY TO THE REVENUE. IN SUPPORT OF HIS CONTENTION, HE REFERRED TO PARA 7 OF THE ORDER OF THE CIT-A AND FURTHER ARGUED THAT NO FINDI NG WAS RECORDED BY HIM AND IT IS NOT A SPEAKING ORDER AND URGED TO REMAND THE ISSUE TO THE AO FOR VERIFICATION OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 10. IN REPLY, THE LD.AR SUBMITS THAT THE AO HAS MAD E THE IMPUGNED ADDITION AGAINST THE FUNDAMENTAL/PRINCIPLE S OF ACCOUNTS INSPITE OF HAVING ALL THE RUNNING BILLS BEFORE THE AO AS SUBMITTED BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE CONTENTION OF THE REVENUE WAS THAT THE ASSESSEE FILED ADDITIONAL EVIDENCE BEFORE THE CIT-A. BASING ON WHICH THE CIT-A DELETED THE IMPUGNED ADDITION. ON PERUSAL THE ASSESSMENT OR DER, WE FIND THAT THE AO HAS INCORPORATED/ANALYSED THE DETAILS OF WORK IN PR OGRESS IN SCHEDULE 13 FOR KHETRI COPPER MINES AND KOLIHAN COPPER MINES SITES. AFTER EXAMINING THE RUNNING ACCOUNT BILL RELATING TO RA-5 & RA-6 FOR SA ID TWO SITES THE AO ADDED THE IMPUGNED ADDITION. THE AO OBSERVED THAT THE ASS ESSEE SHOULD HAVE ACCOUNTED THE TOTAL TURNOVER ON ACCRUAL PRINCIPLE O F ACCOUNTING. WHEREAS THE FINDING OF THE CIT-A WAS THAT THE SAID AMOUNTS WERE INCLUDED IN THE PROFIT & LOSS ACCOUNT FOR THE FY 2009-10 AS ON 31-03-2010 AN D IT IS A DOUBLE ADDITION. WE FIND FROM THE BALANCE SHEET/P & L ACCO UNT AS ON 31-3-2010, WHICH ARE PLACED AT PAGES3-4 OF THE PAPER BOOK, WHE RE IT HAS BEEN SHOWN ITA NO. 2547/KOL/13 M/S. TCL-MMPL CONSORTIUM 5 THAT THE ASSESSEE HAS CLEARLY MENTIONED AN AMOUNT O F RS. 4,55,98,734.86 TOWARDS WIP. THIS AMOUNT WAS SHOWN IN THE BALANCE S HEET AS WELL AS IN THE P & L ACCOUNT FOR THE FY 2009-10. FROM THE ASSESSMENT ORDER, WE FIND THAT THE SAME HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT FOR THE FY 2009-10. AS DISCUSSED ABOVE, WE FIND THAT THE AO IS NOT JUSTIFI ED ON GIVING FINDING THAT THE ASSESSEE DID NOT MENTION SUCH AMOUNT TOWARDS WIP FO R THE FY 2009-10. THUS, WE ARE OF THE VIEW THAT THE CIT-A HAS RIGHTLY DELETED THE IMPUGNED ADDITION BASING ON THE MATERIAL AVAILABLE ON RECORD WHICH WERE ALREADY PART OF ASSESSMENT ORDER AND THE ASSESSEE DID NOT FILE A NY ADDITIONAL EVIDENCE BEFORE CIT-A. THEREFORE, WE FIND NO INFIRMITY IN TH E ORDER OF CIT-A AND IT IS JUSTIFIED. WE FURTHER FIND THAT THE CIT-A DID NOT M ENTION ANY NEW MATERIAL AS CONTENDED BY THE REVENUE BEFORE US. THEREFORE, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER,2016. SD/- SD/- WASEEM AHMED S.S.VISWANE THRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 /09/2016 1. THE APPELLANT/ DEPARTMENT : DCIT, CC - XXI, AAYKAR BHAWAN POORVA, 5 TH FLOOR, 110 SHANTI PALLY, KOLKATA-107. 2 . THE RESPONDENT/ ASSESSEE: M/ S. TCL - MMPL CONSORTIUM 21, C.L.M LANE, P.O RANIGANJ-713347, DIST BURDWAN (WB). COPY OF THE ORDER FORWARDED TO : - ITA NO. 2547/KOL/13 M/S. TCL-MMPL CONSORTIUM 6 3. CIT 4. CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR ** PRADIP SPS INCOME TAX APPELLATE TRIBUNAL KOLKAT A BENCHES, KOLKATA