ITO, NCW-15(3), CHENNAI V. M/S. NITHYA MURTHY GENERAL CONTRACTORS, CHENNAI

ITA 2903/CHNY/2019

AI Insights

The case involves an appeal by the Income Tax Officer against M/s. Nithya Murthy General Contractors concerning the assessment year 2014-15. The appeal was based on the order of the CIT(A)-15, Chennai, which had provided certain reliefs that the revenue contested. The main issues revolved around discrepancies noted between the gross receipts and the receipts shown in Form 26AS, uncharged interest on loans to partners, and differences in profits credited to partners' accounts. The Tribunal examined the submissions and evidence presented, including the financial statements and the audit objections raised, and upheld the CIT(A)'s decisions.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 133958 (ITAT-CHENNAI)
• Duration Of Justice: 12 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-12-2022
• Assessment Year: misc
• Appeal Filed On: 16-10-2010
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; FORM 26AS

Judgement Text

आयकर अपीलीय अिधकरण ‘बी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI माननीय +ी महावीर िसंह, उपा12 एवं माननीय +ी मनोज कु मार अ7वाल ,लेखा सद: के सम2। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.2903/Chny/2019 (िनधाCरण वषC / Asse ssment Year: 2014-15) Income Tax Officer Non-corporate Ward-15(3) Chennai-34 बनाम/ Vs . M/s. Nithya Murthy General Contractors No.17/B, Pillayar Koil Street, Thiruvanmiyur, Chennai – 600 041. थायी लेखा सं. /जीआइ आर सं. /P AN / G I R No . AAD F N -6 831 -B (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Shri N. Arjun Raj (CA) for Shri S. Sridhar (Advocate)-Ld. ARs थ की ओरसे/Respondent by : Shri D. Hema Bhupal (JCIT) –Ld. DR सुनवाई की तारीख/Date of Hearing : 08-12-2022 घोषणा की तारीख /Date of Pronouncement : 08-12-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2014-15 arises out of the order of learned Commissioner of Income Tax (Appeals)-15, Chennai [CIT(A)] dated 31-07-2019 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) r.w.s. 147 of the Act on 30-12-2018. The revenue is aggrieved by certain relief provided by Ld. CIT(A) in the impugned order. 2. The Ld. AR raised a preliminary objection that the appeal would be covered by low tax effect circular issued by CBDT. However, Ld. Sr. ITA No.2903/Chny/2019 - 2 - DR submitted that the case has been reopened after accepting revenue audit objections. To support the same, a copy of half-margin reply of Ld. AO has been placed on record. The same read as under: - The RAP has pointed out that i) the addition made for the difference between the gross receipts and receipts in 26AS, an amount of Rs.54,805/- as receipt by sale of waste paper is omitted to be added. ii) Rs.66,000/- and Rs.2,32,888/- towards interest to be charged for partners current account has to be brought to tax. Reply: After verifying the issues, remedial action will be initiated if necessary. Subsequently, the case has been reopened after obtaining due approval in accordance with law. From the above reply, it was to be concluded that Ld. AO has not negated the objections raised by Revenue Audit Party but it has, in fact, accepted the same and initiated remedial action as required. The Ld. AR could not place on record any document which would indicate that the objections were not accepted by revenue. Thus, the submissions of Ld. Sr. DR are to be accepted and we would hold that the case would fall under the exceptions as provided in low tax effect circular. In the above background, the appeal is disposed-off on merits as under. 3. Addition of Rs.54,805/- due to difference in Form 26AS The Ld. AO made this addition in the allegation that the said amount as shown in Form 26AS was not reflected in the financial statements. However, Ld. CIT(A), after examining the financials, held that the addition was made by Ld. AO due to oversight without examining the financials. The said finding remains uncontroverted before us. Therefore, we see no reason to interfere in the same. 4. Interest on Loans to partners The Ld. AO made addition of Rs.66,000/- on the ground that the assessee advanced loan to its partners and it should have charged ITA No.2903/Chny/2019 - 3 - interest. During appellate proceedings, the assessee pointed out that it had already offered interest income which was found to be correct by Ld. CIT(A) and therefore, the additions were deleted. Since the fact noted by Ld. CIT(A) remain uncontroverted, we confirm the deletion by Ld. CIT(A). 5. Addition of Rs.2,32,888/- due to difference in profits This addition was made on the allegation that though the assessee earned net profit of Rs.7,53,680/- but it credited only Rs.5,20,792/- to the partners’ current account. The Ld. CIT(A) held that crediting of such lower sum cannot lead to any difference warranting addition of income. We find that the aforesaid conclusion drawn by Ld. CIT(A) is quite apt and we concur with the same. 6. The appeal stands dismissed. Order pronounced on 08 th December, 2022. Sd/- (MAHAVIR SINGH) उपा12 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद: / ACCOUNTANT MEMBER चे*ई / Chennai; िदनांक / Dated : 08-12-2022 EDN/- आदेश की Vितिलिप अ 7ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आय ु त (अपील)/CIT(A) 4. आयकर आय ु त/CIT 5. वभागीय त न ध/DR 6. गाड फाईल/GF