M/s.Chandragiri constructions Co., Kasargode V. ACIT, Calicut

ITA 259/COCH/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68957 (ITAT-COCHIN)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-07-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 19-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: C B M WARRIER
• Section: 154

Judgement Text

ITA NO. 259/ COCH/ 2012 1 IN THE INCOME TAX APELALTER TIBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI N.R.S. GANESAN, JM & B. R. BASKARAN, AM ITA NO. 259 /COCH/ 2012 (ASST YEAR 2002 - 03 ) M/S CHANDRAGIRI CONSTRUCTION CO PO THEKKIL KASARGODE VS THE ASST COMMR OF INCOME T AX CENTRAL CIRCLE 1 CALICUT ( APPELLANT) (RESPONDENT) PAN NO. AABFC 7523K ASSESSEE BY SH CB M WARRIER REVENUE BY SMT S VIJAYAPRABHA, JR DR DATE OF HEARING 3 RD JULY 2013 DATE OF PRONOUNCEMENT 30 TH AUG 2013 OREER PER N.R.S G A N ESAN,JM : THIS APPEAL BY THE ASSE SSEE IS DIRECTED AGAINST THE ORDER DATED 27.7.2012 OF THE CIT(A) FOR THE AY 2002 - 03. 2 SHRI C B M WARRIER, THE LD COUNSEL FOR THE ASSESSEE, WHO APPEARED BEFORE US HAS SUBMITTED THAT THE AO INITIATED PROCEEDINGS U/S 154 OF THE ACT ON THE GROUND THAT THERE WAS AN ERROR IN THE ASSESSMENT ORDER. THE ASSESSEE, BY LETTER DATED 26.4.2010 AGREED FOR THE RECTIFICATION PROPOSED BY THE AO. HOWEVER, IT WAS BROUGHT TO THE NOTICE OF THE AO THAT THE RECTIFICATION REQUIRES IN RESPECT OF TWO MORE POINTS. ACCORDING TO THE LD AR, THE AO HAS MADE A ADDITION OF RS. 1,54,78,661/ - TO THE CLOSING WORK - IN - PROGRESS AS ON 31.3.2002 ON THE BASIS OF THE ORDER OF THE SETTLEMENT COMMISSION. WHEN THE ADDITION WAS MADE TO THE CLOSING WORK - IN - PROGRESS AS ON 31.3.2002 , AS PER THE ORDER OF THE SETTLEMENT COMMISSION , THEN THE VERY AMOUNT SHALL BE ADDED IN THE OPENING WORK - IN - PROGRESS AS ON 1.4.2001. HOWEVER, THE AO HAS ITA NO. 259/ COCH/ 2012 2 NOT MADE BY ADDITION TO THE OPENING BALANCE AS ON 1.4.200 1 . THEREFORE, THERE WAS AN ERROR, WHICH IS APPARENT ON RECORD. 2.1 ON THE CONTRARY, SMT VIJAYAPRABHA, THE LD DR HAS SUBMITTED THAT THE ASSESSEE OBTAINED THE ORDER FROM THE SETTLEMENT COMMISSION BY MISREPRESENTATION. THEREFORE, THE DEPARTMENT HAS FILED AN APPLICATION TO RECALL THE ORDER OF THE SETTLEMENT COMMISSION, WHICH IS PENDING EVEN NOW. REFERRING TO THE ASSESSMENT ORDER, THE LD DR HAS POINTED OUT THAT IT MAY NOT BE CORRECT TO SAY THAT THE AO HAS TAKEN THE FIGURE OF RS. 1,54,78,661/ - FROM THE ORDER OF THE SETTLEMENT COMMISSION. ACCORDING TO THE LD DR, DURING THE SEARCH OPERATION, THE DEPARTMENT DETECTED THE OMISSION IN RESPECT OF WORK - IN - PROGRESS. ACCORDING TO THE LD DR THE DETAILS OF WORK - IN - PROGRESS, BILL SUBMITTED AND PAYMENT RECEIVED WERE ANALYSED, WHICH REVEALED THAT THE ASSESSEE HAS UNDERSTATED BILLS RECEIVABLE AN D WORK - IN - PROGRESS; THEREFORE, IT WAS PROPOSED TO MADE AN ADDITION OF RS. 1,54,78,661/ - , WHICH WAS NOT INCLUDED IN THE WORK - IN - PROGRESS AND THE BILLS RECEIVABLE AS PER THE ACCOUNTS FILED BY THE ASSESSEE. THE LD D R SUBMITTED THAT THE AO, AFTER ANALYZING THE SEIZED MATERIAL CAME TO THE CONSCIOUS CONCLUSION THAT THE ADDITION OF RS. 1,54,78,661/ - IS NEEDED TOWARDS THE WORK - IN - PROGRESS; THEREFORE, THERE WAS NO ERROR IN THE ORDER OF THE AO. 3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE HAVE ALSO PERUSED THE PROVISION OF SEC. 154 OF THE ACT . SECTION 154 OF THE ACT EMPOWERS THE AO TO RECTIFY AN ORDER WHICH IS PRIMA FACIE ON RECORD. THE CLAIM OF THE ASSESSEE IS THAT THE AO HAS SIMPLY TAKEN THE FIGURE FROM THE ORDER OF THE SETTLEMENT COMMISSION TOWARDS THE CLOSING WORK - IN - PROGRESS; HOWEVER HE OMITTED TO INCLUDE THE SAME IN THE OPENING WORK IN PROGRESS. WE ARE UNABLE TO AGREE WITH THE CONTENTION OF THE LD A R. A BARE READING OF THE OR DER PASSED U/S 154 OF THE ACT; IT APPEARS THAT THE AO HAS NOT TAKEN THE ITA NO. 259/ COCH/ 2012 3 FIGURE FROM THE ORDER OF THE SETTLEMENT COMMISSION. IN FACT THERE IS NO REFERENCE OF THE ORDER OF THE SETTLEMENT COMMISSION IN THE ORDER OF THE AO. THE AO, AFTER CONSIDERING THE SEIZED MATERIAL AND OTHER DETAILS OF WORK COMPLETED, BILLS SUBMITTED, PAYMENT RECEIVED CAME TO THE CONCLUSION THAT THE ASSESSEE HAS UNDERSTATED BILLS RECEIVABLE AND WORK - IN - PROGRESS. THE AO HAS ALSO FOUND THAT NO ADDITION HAS BEEN MADE IN THIS YEAR IN RESPECT OF THESE WORK - IN - PROGRESS AND BILLS RECEIVABLE. THE AO FOUNDS THAT THERE WAS AN UNDERSTATEMENT OF WORK - IN - PROGRESS AS ON 31.3.2002, ACCORDINGLY, THE SAME WAS ADDED. SINCE THE WORK - IN - PROGRESS RELATES TO THE YEAR UNDER CONSIDERATION, IT WAS NOT ADDED AS OPENI NG WORK - IN - PROGRESS. 4 IN VIEW OF THE CONSCIOUS DECISION TAKEN BY THE AO, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO ERROR MUCH LESS PRIMA FACIE WITHIN THE MEANING OF SECTION 154 OF THE ACT. IN OTHER WORDS, THE ISSUE RAISED BY THE ASSESSEE IS A DEB ATABLE ONE. THEREFORE, THE ISSUE RAISED BY THE ASSESSEE CANNOT BE DECIDED IN AN APPLICATION U/S 154 OF THE A CT. WE ARE OF THE CONSIDERED OPINION THAT SECTION 154 OF THE ACT IS ONLY TO RECTIFY THE MISTAKE /ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND THE SAME IS CONFIRMED. 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF AUG 2013. SD/ - SD/ - ( B.R. BASKARAN) ( N .R .S GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 30 TH , AUG 2013 RAJ* ITA NO. 259/ COCH/ 2012 4 COPY TO: 1. APPELLANT - M/S CHANDRAGIRI CONSTRUCTION CO - PO THEKKIL - KASARGODE 2. RESPONDENT THE ASST COMR OF INCOME TAX, CENTRAL CIRCLE 1 3. CIT(A) 4. CIT , CALICUT 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN