A.S. Nutech Electricals Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 3019/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1532 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 15-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJOG KAPOOR
• Keywords: TDS; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 3019/DEL/2017 ASSESSMENT YEAR: 2012-13 A.S. NUTECH ELECTRICAL PVT. LTD., C/O C.S. ANAND, ADVOCATE, 104, PANKAJ TOWER, 10 LSC, SAVITA VIHAR, DELHI AAICA 3020B VS INCOME-TAX OFFICER, WARD 3(3), NEW DELHI APPELLANT RESPONDENT ASSESSEE BY SH. C.S. ANAND, ADVOCATE REVENUE BY SH. SANJOG KAPOOR, SR. DR ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 20/02/2017 IN APPEAL NO. 217/15-16 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-1, NEW DELHI (LD. CIT(A)) FOR THE ASSESSMENT YEAR 2012-13, M/S A S NUTECH ELECTRICALS (P) LTD (THE ASSESSEE) FILED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF ELECTRICAL CONTRACTS. FOR THE ASSES SMENT YEAR 2012-13, IT HAS FILED ITS RETURN OF INCOME ON 28/9/2012 DECLARING A N INCOME OF RS.9,10,970/-. DURING THE COURSE OF ASSESSMENT, LEARNED ASSESSING OFFICER NOTICED THAT THE DATE OF HEARING 10.12.2019 DATE OF PRONOUNCEMENT 12.12.2019 2 ASSESSEE HAD SHOWN TOTAL REVENUE RECEIPTS TO THE TU NE OF RS. 5,92,39,842/- AS PER ITS PROFIT AND LOSS ACCOUNT WHEREAS RECEIPTS TO THE TUNE OF RS. 8,72,86,922/-WERE TO BE FOUND IN AS-26. ASSESSEE CO NTENDED BEFORE THE LD. ASSESSING OFFICER THAT THE ASSESSEE WAS WORKING AS A CONTRACTOR OF L&T LTD AT VARIOUS SITES AND AS ON 31/3/2012, L&T MADE AN ADJU STMENT OF RS. 2,85 11,426/-IN THEIR BOOKS OF ACCOUNTS IN RESPECT OF VA RIOUS WORKS AFTER MAKING DEDUCTION OF TDS TO THE TUNE OF RS.5,70,228/-; THAT AS AGAINST THOSE PROVISIONS NEITHER ANY WORK WAS DONE BY THE ASSESSE E NOR ANY AMOUNT WAS RECEIVED BY THEM DURING THE FINANCIAL YEAR 2011-12; THAT, HOWEVER, THE ASSESSEE PASSED AN ENTRY IN ITS BOOKS OF ACCOUNTS I N RESPECT OF THE TDS AFFECTED BY THE L&T LTD, BY CREATING A LIABILITY UN DER THE HAD ADVANCE TDS RECEIVED-L&T IN OTHER CURRENT LIABILITIES IN THE BALANCE SHEET AS ON 31/3/2012; THAT IT IS ONLY IN THE FINANCIAL YEAR 20 12-13 THE ASSESSEE RECEIVED A SUM OF RS. 1,93,00,756/-AGAINST THOSE WORKS FROM THE WORK IN RESPECT OF WHICH THE PROVISION WAS CREATED BY L&T LTD; THAT AT THE TIME THE ASSESSEE HAD INCLUDED SUCH AN AMOUNT IN THE INCOME STATEMENT WITHOUT CLAIMING ANY TDS OF RS.3,92,131/- AND ADJUSTED SUCH CONTRACT REC EIPTS AGAINST ADVANCE TDS RECEIVED-L&T LTD SHOWN UNDER THE HEAD OF OTHER CURRENT LIABILITIES; THAT THE ASSESSEE CLAIMED THE ENTIRE TDS OF RS. 5,70,228 /- IN ASSESSMENT YEAR 2012-13 ON THE ADVICE OF THE AUDITOR THAT IF SUCH T DS OF RS. 5,70,228/-ON PROVISION MADE BY THE L&T LTD WAS NOT CLAIMED IN TH E RETURN, IT WILL NOT BE AVAILABLE FOR CLAIM IN SUCCEEDING YEARS; AND THAT T HE ASSESSEE ALSO DID NOT CLAIM ANY EXPENDITURE IN RESPECT OF RS. 2,85,11,426 /-PROVISIONED BY L&T. 3. LEARNED ASSESSING OFFICER DID NOT CONSIDER ANY O F THESE CONTENTIONS RAISED BY THE ASSESSEE AND OBSERVED THAT IN TERMS O F SECTION 198 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) ALL THE SUMS DEDUCTED IN 3 ACCORDANCE WITH THE PROVISIONS OF THE CHAPTER SHALL , FOR THE PURPOSE OF COMPUTING THE INCOME OF THE ASSESSEE, BE DEEMED TO BE INCOME RECEIVED, AND THEREFORE, THE DIFFERENCE BETWEEN THE DECLARED INCOME AND THE RECEIPTS TO BE FOUND IN AS-26 SHALL BE BROUGHT TO TAX. HE AC CORDINGLY MADE AN ADDITION OF RS. 2,18,47,080/-TO THE INCOME OF THE A SSESSEE. 4. AGGRIEVED BY SUCH AN ADDITION, ASSESSEE PREFERRE D AN APPEAL BEFORE THE LD. CIT(A) AND RAISED ALL THE CONTENTIONS THAT WERE TAKEN BEFORE THE LDASSESSING OFFICER. ASSESSEE FURTHER PLEADED THAT WHILE FILING THE RETURN OF INCOME FOR ASSESSMENT YEAR 2012-13 IN FORM NO. ITR 6, THERE WAS NO COLUMN IN THE RETURN FORM ITR 6 TO SHOW THE TDS AMOUNT TO BE CARRIED FORWARD TO NEXT PERIOD, WHICH WAS SUBSEQUENTLY MODIFIED TO INC LUDE A NEW COLUMN REGARDING THE CLAIM OF TDS AND CARRY FORWARD OF TDS TO NEXT PERIOD. ASSESSEE FURTHER SUBMITTED THAT IT HAD CLAIMED TDS INADVERTE NTLY THAT IF THE SAME WAS NOT CLAIMED IN RETURN FOR THE ASSESSMENT YEAR 2012- 13, THE SAME COULD NOT BE CLAIMED IN THE FOLLOWING YEARS AS ADVISED BY THE IR AUDITOR. 5. LD. CIT(A) RECORDED ALL THE CONTENTIONS OF THE A SSESSEE IN HIS ORDER BUT DISMISSED THE APPEAL HOLDING THAT ONCE THE ASSESSEE HAD CLAIMED THE CREDIT OF TDS OF RS. 5,70,228/-, THE ASSESSEE WAS BOUND TO DISCLOSE THE RECEIPTS OF RS. 2,80,47,080/-WHICH THE ASSESSEE HAS NOT DONE; T HAT THE PROVISION MADE BY THE L&T IN THEIR BOOKS OF ACCOUNTS WITH REFERENC E TO RS.2,85,11,426/- WAS MADE WITH THE CONSENT OF THE ASSESSEE AND M/S L&T H AD CLAIMED THAT MUCH EXPENDITURE IN HIS BOOKS OF ACCOUNTS FOR THE WORK E XECUTED; AND, THEREFORE, THE CONTRACT RECEIPTS TO THE EXTENT OF RS. 2,80,47, 080/-WHICH ARE REFLECTED IN THE AS-26 OF THE ASSESSEE WAS THE UNDISCLOSED INCOM E OF THE ASSESSEE AS THE SAME HAS TO BE TAXED IN THE HANDS OF THE ASSESSEE F OR THE ASSESSMENT YEAR 2012-13. 4 6. IN THIS APPEAL, ASSESSEE CONTENDS THAT WHETHER O R NOT THE L&T LTD, HAVING CREATED THE PROVISION TO THE TUNE OF RS. 2,8 5,11,426/-, HAS NOT MADE ANY PAYMENTS TO THE ASSESSEE IN THAT YEAR, AND AS A MATTER OF FACT OUT OF THIS AMOUNT OF RS. 2,85,11,426/-, L&T HAD ADJUSTED A SUM OF RS.1,93,00,756/-IN THE ASSESSMENT YEAR 2013-14 WHICH THE ASSESSEE HAD DECLARED IN THE RETURNS WITHOUT CLAIMING ANY TDS BECAUSE THEY HAVE ADJUSTED THE TDS AMOUNT OF RS. 3,92,131/- RELATABLE TO THIS PAYMENT OF RS. 1,93,00 ,756/-OUT OF THE ADVANCE TDS RECEIVED-L&T. ASSESSEE FURTHER CONTENDS THAT IN RESPECT OF SUCH PROVISIONED AMOUNT, ASSESSEE HAS NOT CLAIMED ANY EX PENDITURE. 7. IT IS SUBMITTED BY THE LD. AR THAT ALL THESE THI NGS ARE VERIFIABLE FACTS AND IT IS NOT POSSIBLE FOR THE ASSESSEE TO COMPEL T HE L&T LTD TO REVEAL THE DETAILS IN RESPECT OF THE PROVISIONED AMOUNT TO THE TUNE OF RS. 2,85,11,426/- WHEREAS THE LEARNED ASSESSING OFFICER COULD HAVE OP TED SUCH INFORMATION FROM L&T LTD TO REACH A JUST CONCLUSION. 8. FROM THE RECORD AND THE IMPUGNED ORDER, WE FIND THAT THE ASSESSEE HAS BEEN CONTENDING SO IN THE PROCEEDINGS BEFORE TH E LEARNED ASSESSING OFFICER AND THE LD. CIT(A)ALSO. THESE ARE FOR THE A UTHORITIES TRY TO LOOK INTO THIS MATTER FROM THE ANGLE OF L&T LTD. WHETHER NOT THE ASSESSEE RECEIVED ANY AMOUNTS DURING THE FINANCIAL YEAR 2011-12 AND W HETHER OR NOT ANY WORK WAS DONE BY THE ASSESSEE DURING THAT PERIOD RELATAB LE TO SUCH PROVISIONED AMOUNT IS A VERIFIABLE FACT. WE FIND EVERY REASON W ITH THE SUBMISSIONS OF THE LD. AR THAT L&T BEING A GIANT COMPANY, IS NOT COOPE RATING WITH THE ASSESSEE IN PROVIDING THE REQUISITE DETAILS IN RESPECT OF TH E PROVISIONED AMOUNT AND THEREFORE IT IS ONLY THE LEARNED ASSESSING OFFICER WHO COULD CAUSE VERIFICATION OF THE SAME BY CALLING UPON THE L&T LTD TO FURNISH SUCH DETAILS. 5 9. SINCE ALL THE ENDEAVOUR OF THE AUTHORITIES UNDER THE INCOME TAX ACT, 1961 IS TO DETERMINE THE JUST TAX LIABILITY OF THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT THIS IS A FIT CASE TO SET A SIDE THE IMPUGNED ORDER AND TO REMAND THE MATTER TO THE FILE OF THE ASSESSING O FFICER WITH A DIRECTION TO VERIFY THE DETAILS RELATING TO THE PROVISIONED AMOU NT AS TO WHETHER THE ASSESSEE DID ANY WORK RELATABLE TO PROVISIONED WORK AND RECEIVED ANY PAYMENTS DURING THE FINANCIAL YEAR 2011-12 AND TO T AKE A FRESH VIEW. WITH THIS VIEW OF THE MATTER WE SET ASIDE THE IMPUGNED O RDER AND DIRECT THE LEARNED ASSESSING OFFICER TO VERIFY THE DETAILS OF THE PROVISIONED AMOUNT SECURING THEM FROM L&T LTD IN THE LIGHT OF THE CONT ENTIONS RAISED BY THE ASSESSEE AND TO TAKE A FRESH VIEW ON THIS ASPECT. W E ACCORDINGLY ALLOW THE GROUNDS OF APPEAL FOR STATISTICAL PURPOSE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH DECEMBER, 2019. SD/- SD/- (R.K. PANDA) (K. NARASIMHA CHAR Y) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12/12/2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI