Deputy Commissioner of Income tax, V. M/s. B.G. Shirke Construction Technology Pvt.Ltd, Pune

ITA 2771/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1353 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 07-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G P CHANDRAKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , !' , #$ %! '& , !' !' BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWAS THY, JM !$. / ITA NO.2771/PUN/2016 ) *) / ASSESSMENT YEAR : 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), PUNE. ....... / APPELLANT / V/S. M/S. B.G. SHIRKE CONSTRUCTION TECHNOLOGY PVT. LTD. 72-76, MUNDHWA INDUSTRIAL ESTATE, PUNE-411 036 PAN : AAACB7293D / RESPONDENT REVENUE BY : SHRI G.P. CHANDRAKAR ASSESSEE BY : SHRI NIKHIL PATHAK / DATE OF HEARING : 06.09.2018 / DATE OF PRONOUNCEMENT : 07.09.2018 + / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS)-1, PUNE DATED 14.09.2016 FOR THE A SSESSMENT YEAR 2012-13. 2. THE REVENUE HAS ASSAILED THE FINDINGS OF COMMISSIONER O F INCOME TAX (APPEALS) BY RAISING FOLLOWING GROUNDS: 2 ITA NO.2771/PUN/2016 A.Y.2012-13 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO THE LAW AND ON FACTS AND IN THE CIRCUMS TANCES OF THE CASE. 2. THE LD.CIT(A) ERRED IN DECIDING THAT RETENTION MONEY HAS TO BE TAXED IN THE YEAR OF RECEIPT AND NOT ON ACCRUAL BASIS EVE N THOUGH ASSESSEE IS FOLLOWING MERCANTILE SYSTEM AND ASSESSEE HAS DEBITE D ALL EXPENDITURE RELATED TO SUCH CONTRACT RECEIPT INCLUDING RETENTIO N MONEY. 3. THE LD. CIT(A) ERRED IN CONFIRMING THE VIEW OF A SSESSEE THAT RETENTION MONEY HAS TO BE EXCLUDED IN COMPUTATION OF INCOME, ALTHOUGH THE SAME HAS BEEN SHOWN AS RECEIPT DURING THE YEAR AND CREDI TED IN PROFIT AND LOSS ACCOUNT. 4. THE LD. CIT(A) ERRED IN CONFIRMING THE VIEW OF A SSESSEE THAT RETENTION MONEY HAS TO BE EXCLUDED IN COMPUTATION OF INCOME I N VIEW OF DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CABLES (P.) LTD. VS. DY.CIT [2006] REPORTED IN 286 ITR 596 (BOM.) ALTHOU GH THE FACTS OF PRESENT CASE IS DISTINGUISHED. 5. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF LD. COMMISSIONER OF INCOME TA X (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 6. THE APPELLANT CRAVES TO ADD, AMEND, ALTER OR DEL ETE ANY OF THE ABOVE GROUND OF APPEAL DURING THE COURSE OF APPELLATE PRO CEEDINGS BEFORE THE HON'BLE TRIBUNAL. 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION CONTRACTORS, CIVIL AND STRUCTURAL ENGINEERS, FABRICATORS AND MANUFACTURING OF POST-HARVEST EQUIPMENT, EXPLORATION AND DEVELOPMENT OF OIL AND GAS PRODU CING ACTIVITIES. THE LD. AR SUBMITTED THAT THE ASSESSEE OFFERS RETENTION M ONEY TO TAX IN THE YEAR IN WHICH IT IS RECEIVED. THE ASSESSEE HAS BEEN CONSIS TENTLY FOLLOWING THIS METHOD OF ACCOUNTING QUA RETENTION MONEY. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MAD E ADDITION OF RS.22,34,92,287/- ON THE GROUND THAT THE RETENTION MONEY IS TO BE BROUGHT TO TAX IN THE YEAR, IT HAS BECOME DUE. THE LD.AR FURTHER S UBMITTED THAT ADDITION OF RETENTION MONEY FOR SIMILAR REASONS WERE MADE IN EARLIER ASSESSMENT YEARS STARTING FROM ASSESSMENT YEAR 2003-0 4. THE MATTER TRAVELLED UPTO THE TRIBUNAL. THE TRIBUNAL IN ITA NOS.727 TO 730/PN/2012, VIDE ORDER DATED 31.10.2013 IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 3 ITA NO.2771/PUN/2016 A.Y.2012-13 2003-04, 2006-07, 2007-08 & 2008-09 CONCURRED WITH THE VIEW OF ASSESSEE AND DELETED THE ADDITION. THE TRIBUNAL IN ITA NO.1146/PN/20 14, FOR ASSESSMENT YEAR 2010-11 DECIDED ON 15.01.2016 AND IN IT A NO.1330/PN/2015 FOR ASSESSMENT YEAR 2011-12 DECIDED ON 24.11.2017 FOLLOWING EARLIER ORDERS OF TRIBUNAL DECIDED THE ISSUE IN FAVOU R OF ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE JUDICIAL DISCIPLINE HAS DELETED THE ADDITION BY PLACING RELIANCE ON THE ORDER OF TRIBUNAL IN ITA NOS.727 TO 730/PN/2012 (SUPRA.). 4. SHRI G.P. CHANDRAKAR REPRESENTING THE DEPARTMENT VE HEMENTLY DEFENDED THE ASSESSMENT ORDER. HOWEVER, LD. DR FAIRLY ADMIT TED THAT THE ISSUE RAISED BY REVENUE IN THE PRESENT APPEAL HAS ALREAD Y BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER ASSESSMENT YEARS. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIV ES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE S OLITARY ISSUE RAISED IN PRESENT APPEAL BY THE REVENUE IS AGAINST DELETING ADDIT ION OF RETENTION MONEY. WE FIND THAT THIS ISSUE IS RECURRING SINCE ASSESSME NT YEAR 2003-04. THE TRIBUNAL FOR THE FIRST TIME IN BUNCH OF APPEALS IN ASSESS EES OWN CASE IN ITA NOS.727 TO 730/PN/2012(SUPRA.) AFTER CONSIDERING THE A SSESSEES CLAIM, IN PRINCIPLE DIRECTED FOR EXCLUSION OF RETENTION MONEY SUBJEC T TO VERIFICATION OF QUANTUM. THEREAFTER, THE TRIBUNAL IN APPEAL OF THE ASSES SEE FOR ASSESSMENT YEAR 2010-11 (ITA NO.1146/PM/2014) & ASSESS MENT YEAR 2011- 12 (ITA NO.1330/PUN/2015) HAS TAKEN A CONSISTENT VIEW IN DELETING THE ADDITION SUBJECT TO VERIFICATION IN SIMILAR TERMS. FOR THE SA KE OF COMPLETENESS, THE RELEVANT EXTRACT OF THE FINDINGS OF THE T RIBUNAL IN ITA NO.727 TO 730/PN/2010(SUPRA) ARE REPRODUCED HEREIN BELOW: 4 ITA NO.2771/PUN/2016 A.Y.2012-13 25. IN SO FAR AS THE MERITS OF THE CLAIM IS CONCER NED, NO DOUBT IN PRINCIPLE THE SAME IS COVERED BY THE RATIO OF THE J UDGEMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CABLES P. LTD. (SUPRA). THE ASSESSEE HAS ALSO FURNISHED THE YEAR-W ISE WORKING OF THE CLAIM OF EXCLUDING INCOME ON ACCOUNT OF RETENTION M ONEY FOR THE ASSESSMENT YEARS IN QUESTION. SUCH DETAILS ARE PLAC ED IN THE PAPER BOOK FILED BEFORE US AND IT HAS BEEN ASSERTED THAT THE SAME WAS ALSO AVAILABLE ON THE RECORD OF THE AUTHORITIES BELOW. O STENSIBLY, THE ASSESSING OFFICER AS WELL THE CIT(A) HAVE NOT EXAMI NED THE MERITS OF THE CLAIM BECAUSE THE SAME WAS REJECTED AT THE THRE SHOLD ITSELF. AT THE TIME OF HEARING, THE APPELLANT HAS PREFERRED ADDITI ONAL GROUNDS OF APPEAL RE-QUANTIFYING THE CLAIM FOR ASSESSMENT YEAR S 2007-08 AND 2008-09 IN THE EVENT OF SIMILAR CLAIMS NOT BEING FO UND EXIGIBLE FOR ASSESSMENT YEARS 2003-04 AND 2006-07. IN ORDER TO E NABLE THE ASSESSING OFFICER TO VERIFY THE WORKINGS OF THE CLA IM FOR ASSESSMENT YEARS 2007-08 AND 2008-09, WE RESTORE THE MATTER BA CK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFF I CER SHALL E X AMINE THE WORKING OF THE CLAIM MADE BY THE ASSESSEE , INCLUDING THE REVISED WORKINGS CONSEQUENT TO NON-ADMISSION OF SIMI L AR C L AIM F OR ASSESSMENT YEARS 2003 - 04 AND 2006-07 , AND THEREAFTER ALLOW THE APPROPRIATE CLAIM AS PER LAW . NEEDLESS TO SAY , THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A R EASONABLE OPPORTUNITY OF FURNISH I NG APPROPRIATE DETA I LS IN SUPPORT OF THE CLA I M AND ONLY THEREAFTE R THE ASSESSING OFFICER SHALL ADJUDICATE IT AS PER LAW AND RE-COMPUTE THE TOTAL I NCOME ACCORD I NG L Y F OR THE ASSESSMENT YEARS 2007-08 AND 2008-09 . THE ISSUE HAS BEEN LAID TO REST BY THE TRIBUNAL HOLDING E XCLUSION OF RETENTION MONEY AND THE REVENUE HAS NOT BROUGHT ON R ECORD ANY CONTRARY DECISION. THUS, IN THE LIGHT OF THE ORDERS OF TRIBUNAL IN ASSES SEES OWN CASE FOR EARLIER ASSESSMENT YEARS, WE UPHOLD THE FINDINGS OF COMM ISSIONER OF INCOME TAX (APPEALS) AND DISMISS THE GROUNDS RAISED BY THE REVENUE . 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 07TH DAY OF SEPTEMBER, 2018. SD/- SD/- ( / ANIL CHATURVEDI ) ( %! '& /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 07 TH SEPTEMBER, 2018 SB 5 ITA NO.2771/PUN/2016 A.Y.2012-13 + , -.% /%* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-1, PUNE. 4. THE PR. CIT-1, PUNE. 5. %&' () , * () , +,- , / DR, ITAT, B BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // *2 / BY ORDER, 3 (- / PRIVATE SECRETARY * () , / ITAT, PUNE.