Isolux Corsan India- C & C JV, Gurgaon V. ITO, Gurgaon

ITA 2901/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7033 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 09-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N MEENA
• Keywords: TDS

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BENC H, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH, JUDICIAL MEM BER ITA NO. 2901/DEL/2017 [ASSESSMENT YEAR: 2012-13] ISOLUX CORSAN INDIA C&C JV VS. THE INCOME TAX OFFICER 1 ST FLOOR, SPLENDOR TRADE TOWER WARD 2(1) GOLF COURSE EXTENSION ROAD GURGAON SECTOR 65, GURGAON PAN: AAAAI 4647 L [APPELLANT] [RESPONDENT] DATE OF HEARING : 03.02.2020 DATE OF PRONOUNCEMENT : 03.02.2020 ASSESSEE BY : NONE REVENUE BY : SHRI S.N. MEENA, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] -1, GURGAON DA TED 22.02.2017 PERTAINING TO ASSESSMENT YEAR 2012-13. 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE AS SESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DENIAL OF CR EDIT OF TDS. 3. NOTICE ISSUED TO THE ASSESSEE WAS RETURNED UNSER VED. WE FIND THAT THE NOTICE WAS ISSUED ON THE ADDRESS GIVEN IN APPEAL MEMO. SINCE NO ONE APPEARED ON BEHALF OF THE ASSESSEE, WE DECID ED TO PROCEED EXPARTE. 4. WE HAVE HEARD THE LD. DR AT LENGTH WHO HEAVILY R ELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(A). 5. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A JOINT VENTURE BETWEEN ISOLUX CORSAN INDIA ENGINEERI NG AND CONSTRUCTION PVT. LTD. AND C&C CONSTRUCTION LTD. FOR CARRYING OU T EXECUTION OF CONSTRUCTION CONTRACTS IN THE FIELD OF ANY KIND OF ROADS, BUILDING ETC. 6. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER SOUGHT EXPLANATION FROM THE ASSES SEE TO THE DIFFERENCE IN THE REVENUE RECOGNIZED IN THE PROFIT AND LOSS ACCOUNT 3 AND RECEIPTS AS PER FORM 26-AS. THE ASSESSEE FILED RECONCILIATION OF GROSS RECEIPT AS UNDER: PARTICULAR AMOUNT REVENUE RECOGNISED IN P & L A/C. AS PER AS 7 262,014,771 ADVANCE PROGRESSIVE BILLING MADE 714,075,685 MOBILIZATION ADVANCE RECEIVED 847,959,184 TOTAL 1,824,049,640 GROSS RECEIPT AS PER 26AS 1,824,049,640 DIFFERENCE - 7. IN ITS REPLY, THE ASSESSEE EXPLAINED THAT IT HAS MADE PROGRESSIVE INVOICING TO THE TUNE OF RS. 71,40,75,685/- AND REC EIVED MOBILIZATION ADVANCE OF RS. 84,79,59,184/- DURING THE YEAR UNDER CONSIDERATION, WHICH HAS NOT BEEN CONSIDERED AS INCOME FOR THE YEA R UNDER CONSIDERATION ACCORDING TO THE PERCENTAGE OF COMPLE TION METHOD [POCM] ADOPTED BY THE ASSESSEE. IT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT THE PAYERS HAVE DEDUCTED AND DEPOSITED THE APPLICABLE TDS ON THESE PROGRESSIVE INVOICING AND A DVANCE PAYMENT AND ACCORDINGLY, THE ASSESSEE HAS CLAIMED TDS IN TH E YEAR UNDER CONSIDERATION. 4 8. THE ASSESSING OFFICER DISMISSED THE CLAIM OF THE ASSESSEE HOLDING THAT THE CREDIT OF TDS IS TO BE ALLOWED ONLY IN THE YEAR IN WHICH RECEIPT HAS BEEN REFLECTED BY THE ASSESSEE AS ITS INCOME IN ITS ACCOUNT. ACCORDINGLY, CREDIT OF TDS OF RS. 3,12,40,697/- WAS DENIED. 9. THE ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 10. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUT HORITIES BELOW. THE ASSESSING OFFICER HAS NOT MADE ANY ADVERSE INFE RENCE IN SO FAR AS THE METHOD OF ACCOUNTING EMPLOYED BY THE ASSESSEE I S CONCERNED AND HAS ACCEPTED THAT THE ASSESSEE IS CONSISTENTLY FOLL OWING POCM FOR RECOGNIZING INCOME FROM CONSTRUCTION CONTRACTS AS P RESCRIBED IN ACCOUNTING STANDARD-7 ISSUED BY INSTITUTE OF CHARTE RED ACCOUNTANTS OF INDIA, WHICH IS MANDATORY ACCOUNTING STANDARD. 11. WE FIND THAT IN ITS REPLY, THE ASSESSEE HAS SPE CIFICALLY MENTIONED THAT SINCE IT IS FOLLOWING POCM, IT HAS OFFERED FOR TAX THE INCOME ON WHICH IT HAS CLAIMED TDS DURING THE YEAR, IN SUBSEQ UENT YEARS ON THE 5 BASIS OF REVENUE RECOGNIZED AS PER THE CONSISTENT M ETHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE AS PER POCM. 12. WE FIND THAT THERE IS NO MENTION OF ANY SUCH IN COME OFFERED IN SUBSEQUENT ASSESSMENT YEARS NOR IT HAS BEEN VERIFIE D BY THE ASSESSING OFFICER. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. T HE ASSESSING OFFICER IS DIRECTED TO VERIFY WHETHER THE INCOME HAS BEEN RECO GNIZED IN SUBSEQUENT ASSESSMENT YEARS AND IF FOUND CORRECT, C REDIT OF TDS SHOULD BE GIVEN ACCORDINGLY. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 2901/DEL/2017 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 03.02. 2020. SD/- SD/- [KULDIP SINGH ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03 RD FEBRUARY , 2020. VL/ 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT ASST. REGISTRAR 4. CIT(A) ITAT, NEW DELHI 5. DR DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER