M/s. Indiinfrabuild Constructions Private Limited, Bangalore V. Income Tax Officer, Ward 3(1)(4), Bangalore

ITA 329/BANG/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3250 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-04-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 10-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; TDS; Set aside
• Section: 194C; 13

Judgement Text

ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.329/BANG/2020 ASSESSMENTYEAR:2016-17 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD. NO.29/1, 4 TH FLOOR, SABARI PARADISE, KADUGODI PLANTATION BANGALORE RURAL, BANGALORE 560 067. PAN NO :AACCI6843A VS. ITO WARD 3(1)(4) BANGALORE APPELLANT RESPONDENT APPELLANT BY : SHRI H. ANIL KUMAR, A.R. RESPONDENT BY : SMT. K. HARITHA, D.R. DATE OF HEARING : 06.04.2021 DATE OF PRONOUNCEMENT : 15.06.2021 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 13.1.2020 PASSED BY LD. CIT(A)-3, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2016-17. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN CONFIRMING THE ADDITION O F RS.1.12 CRORES MADE BY THE A.O. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A CIVIL CONTRACTOR AND IT FILED ITS RET URN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME O F RS.9,31,740/-. ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 2 OF 12 THE ASSESSEE HAD DECLARED ITS TOTAL TURNOVER AT RS. 1,65,99,621/- IN ITS RETURN OF INCOME AND ALSO CLAIMED TDS CREDIT OF RS.5,57,448/-. THE A.O. NOTICED THAT THE TDS CERTIFICATES FILED BY THE ASSESSEE FOR THE AGGREGATE TDS AMOUNT OF RS.5,57,448/- DISCLOSED THAT THE TDS HAS BEEN MADE ON AN AGGREGATE AMOUNT OF CONTRACTUAL PAYMENTS OF RS.2,78,72,229/-. THUS THERE WAS A DIFFERENCE OF R S.1,12,72,068/- BETWEEN THE CONTRACTUAL AMOUNT SHOWN IN THE TDS CER TIFICATES AND THAT SHOWN IN THE PROFIT AND LOSS ACCOUNT. HENCE T HE A.O. ASKED THE ASSESSEE TO EXPLAIN THE DIFFERENCE BETWEEN THE TURNOVERS. THE ASSESSEE SUBMITTED THAT IT HAS RECEIVED AN ADVANCE AMOUNT OF RS.74,32,104/- AND THE SAME WAS NOT INCLUDED IN THE TURNOVER. ACCORDING TO THE AO, THE ASSESSEE DID NOT FURNISH A NY DOCUMENTARY EVIDENCE IN SUPPORT OF THIS CLAIM. 3. SINCE THE ASSESSEE HAS CLAIMED CREDIT FOR ENT IRE TDS AMOUNT OF RS.5,57,448/-, THE AO TOOK THE VIEW THAT THE ASSESS EE SHOULD HAVE DISCLOSED GROSS RECEIPTS OF RS.2,78,72,229/- SHOWN IN THE TDS CERTIFICATES AS ITS TURNOVER. ACCORDINGLY, HE ASSE SSED THE DIFFERENCE OF RS.1,12,72,608/- AS INCOME OF THE ASSESSEE. THE LD. CIT(A) ALSO CONCURRED WITH THE VIEW TAKEN BY THE A.O. AND HENCE , THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. THE LD. A.R. HAS FILED HIS WRITTEN SUBMISSIONS A ND ALSO ADVANCED HIS ARGUMENTS. HE SUBMITTED THAT THE ASSES SEE, BEING A CIVIL CONTRACTOR, WOULD RAISE INVOICES ON ITS CLIEN TS IN SEVERAL STAGES OF CONSTRUCTION, AS PER THE AGREEMENT ENTERED WITH ITS CLIENTS. EVEN THOUGH THE ASSESSEE WOULD BE CONTINUOUSLY EXECUTING THE WORK, THE INVOICE WILL BE RAISED AFTER COMPLETION OF PARTICUL AR STAGE OF CONSTRUCTION AND WHEN THE RUNNING BILL IS APPROVED BY THE CLIENT. ACCORDINGLY, THE ASSESSEE WOULD RECOGNIZE CONTRACT RECEIPTS ONLY TO THE EXTENT OF INVOICES RAISED BY IT. HOWEVER, SINC E THE ASSESSEE ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 3 OF 12 WOULD CONTINUE TO EXECUTE THE WORK, THE UNBILLED EX PENSES WOULD BE SHOWN AS WORK IN PROGRESS, AS PER AS-7. IN THE MEAN TIME, THE ASSESSEE WOULD ALSO BE RECEIVING ADVANCE PAYMENTS F ROM THE CLIENTS AND THE SAME WOULD BE ADJUSTED AGAINST THE INVOICE RAISED. HE SUBMITTED THAT THE CLIENTS WOULD BE DEDUCTING TDS W HENEVER THE PAYMENTS WERE MADE TO THE ASSESSEE. HOWEVER, THE A SSESSEE WOULD ACCOUNT FOR THE CONTRACT RECEIPTS ONLY UPON RAISING OF INVOICES. ACCORDINGLY, HE SUBMITTED THAT THERE WILL BE MISMAT CH BETWEEN THE AMOUNTS OF CONTRACTUAL PAYMENTS DISCLOSED IN THE TD S CERTIFICATES THE AMOUNT OF CONTRACT RECEIPTS RECOGNIZED BY THE A SSESSEE AS ITS INCOME. HE SUBMITTED THAT THE AMOUNTS RECEIVED B Y THE ASSESSEE FROM ITS CLIENTS WOULD BE REFLECTED EITHER AS CONT RACT RECEIPTS OR ADVANCE PAYMENT RECEIPTS OR IN WORK IN PROGRESS. H E SUBMITTED THAT THE AGGREGATE AMOUNTS OF RECEIPTS REFLECTED IN THE BOOKS OF ACCOUNTS IN THE ABOVE SAID THREE HEADS WOULD EXCEED THE AGGREGATE AMOUNT OF PAYMENTS MENTIONED IN THE TDS CERTIFICATE S. 5. IN THE WRITTEN SUBMISSION, THE LD A.R HAS GIVEN DETAILS OF AMOUNT RECORDED IN THE BOOKS OF ACCOUNT. FOR THE S AKE OF CONVENIENCE, WE EXTRACT BELOW THE SUBMISSIONS MADE BY LD A.R IN THIS REGARD. WHEN SECTION 194C REQUIRES DEDUCTION ON PAYMENTS M ADE AS ADVANCE, THE REASONING OF THE A.O. IS WITHOUT BASIS. IT IS FOR THE A.O. TO SUBSTANTIATE BY CALLING FOR DETAILS OF THE AMOUNTS PAID/CREDITED FROM THE 5 DEDUCTORS MENTIONED IN PARA 3 OF THE ORDER TO ESTABLISH HOW MUCH OF THE AMOUNTS PAID/CREDITED REPRESENT REVENUE AN D HOW MUCH REPRESENT ADVANCE. HE CANNOT CONCLUDE THAT RS.2,78 ,72,229 IS GROSS RECEIPTS. THE A.O. HAS ALSO IGNORED THE ACCOUNTIN G POLICY 6 REVENUE RECOGNITION ON PAGE 17, THAT REVENUE FROM WORK CONTRACT ARE RECOGNIZED ON STAGE WISE COMPETITION. THE SIG NIFICANCE OF THE INCREASE IN WORK IN PROGRESS FROM RS.89,75,730 AS O N 31.03.2015 TO RS.1,89,78,000 AS ON 31.3.2016 HAS BEEN LOST BY THE A.O. THE FINANCIAL STATEMENTS UPLOADED BY THE APPELLANT ON 29.09.2018 SHOW THAT THE APPELLANT HAS OFFERED REVENUE/INCOME FROM CONTRACTS AS UNDER: ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 4 OF 12 NOTE 13 WORK CONTRACT & SUPPLIES 71,69,238 VAT COLLECTED 10,39,541 WORKS CONTRACT SERVICES 73,60,951 SERVICE TAX COLLECTED 10,29,891 1,65,99,621 NOTE 15 INCREASE IN CONTRACT WORK IN PROGRESS ____________ (NOTE 15) 1,00,02,270 AMOUNT OFFERED AS INCOME 2,66,01,891 NOTE 4(B) INCREASE IN ADVANCE RECEIVED FROM CUSTOMERS (NOTE 4B) 74,32,104 CLOSING BALANCE 17,01,238 LESS: OPENING BALANCE 57,30,866 TOTAL OF AMOUNT CREDITED/ PAID REFLECTED IN FINANCIAL STATEMENTS. 3,23,32,757 IT APPEARS THE A.O. IS NOT CONVERSANT WITH FINANCIA L STATEMENTS OF A CONTRACTOR AND DUE TO E-PROCEEDINGS WAS RESTRICTE D FROM BEING ENLIGHTENED BY THE A.R. OF THE APPELLANT ON THE NAT URE OF OPERATIONS AND BOOK KEEPING OF A CONTRACTOR, PARTICULARLY THE CONCEPT OF CASH AND MERCANTILE SYSTEM OF ACCOUNTING. AS THE A.O. HAS NOT REJECTED THE ACCOUNTS UNDER SEC TION 145, PRESENT ACTION IS NOT AS PER LAW. THE LD REITERATED THE SUBMISSIONS MADE IN THE WRITT EN SUBMISSIONS. 6. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT THE ASSESSEE HAS CLAIMED ENTIRE AMOUNT OF TDS SHOWN IN THE CERTIFICA TES. HOWEVER, THE ASSESSEE HAS NOT OFFERED THE ENTIRE AMOUNT OF C ONTRACT RECEIPTS SHOWN IN THE TDS CERTIFICATES. SHE SUBMITTED THAT THE TDS CREDIT SHALL BE GIVEN ONLY IN THE ASSESSMENT YEAR FOR WHIC H SUCH INCOME IS ASSESSABLE. THIS IS STATED SO IN RULE 37BA(3) OF T HE I T RULES READ WITH SEC. 199(3) OF THE ACT. SINCE THE ASSESSEE HA S CLAIMED ENTIRE ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 5 OF 12 AMOUNT OF TDS CREDIT, THE AO HAS ASSESSED THE ENTIR E CONTRACTUAL PAYMENTS SHOWN IN THE TDS CERTIFICATES AS INCOME OF THE ASSESSEE. THE LD D.R SUBMITTED THAT THE ASSESSEE HAS OFFERED ONLY GENERAL EXPLANATIONS BEFORE THE AO WITH REGARD TO THE DIFFE RENCE AND DID NOT RECONCILE THE PAYMENTS SHOWN IN TDS CERTIFICATES WI TH THE BOOKS OF ACCOUNT/THE CONTRACTUAL RECEIPTS DECLARED IN THE PR OFIT AND LOSS ACCOUNT. THE LD D.R FURTHER SUBMITTED THAT, IF THE ASSESSEE IS ABLE TO RECONCILE THE CONTRACTUAL PAYMENTS RECEIVED BY I T WITH THE INCOME DECLARED IN THE SUBSEQUENT YEARS, THEN THE TDS CRED IT SHOULD BE RESTRICTED TO THE AMOUNT RELATABLE TO THE CONTRACTU AL RECEIPTS ASSESSED DURING THE YEAR UNDER CONSIDERATION AND TH E REMAINING AMOUNT OF TDS MAY BE ALLOWED IN THE YEAR IN WHICH T HE CORRESPONDING CONTRACTUAL RECEIPTS HAVE BEEN DECLAR ED. 7. IN THE REJOINDER, THE LD A.R SUBMITTED THAT THE ASSESSEE HAS FURNISHED THE DETAILS OF RECONCILIATION BEFORE THE LD CIT(A). HE INVITED OUR ATTENTION TO PAGE 53 OF THE PAPER BOOK. WITH REGARD TO THE SUBMISSION OF LD D.R FOR ALLOWING ONLY PROPORTI ONATE AMOUNT OF TDS CREDIT, THE LD A.R SUBMITTED THAT THERE ARE CER TAIN CASE LAWS, WHICH HAVE HELD THAT THE ENTIRE AMOUNT OF TDS CREDI T SHOULD BE GIVEN IRRESPECTIVE OF DISCLOSURE OF CORRESPONDING I NCOME. 8. WE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE AO HAS MADE THE IMPUGNED ADDITION FOR THE REASON THAT THE ASSESSEE HAS CLAIMED CREDIT OF ENTIRE AMOUNT OF TDS SHOWN IN TDS CERTIFICATES. IN OUR VIEW, IT SHOULD BE OTHER WAY ROUND. THE AO CAN ASSESS ONLY THE AMOUNT THAT CONSTITUTES INCO ME OF THE YEAR UNDER CONSIDERATION. AS PER THE PROVISIONS OF SEC. 199(3) R.W. RULE 37BA OF I T RULES, THE TDS CREDIT CAN BE DEFERRED T O ANY OTHER YEAR, IN WHICH THE CORRESPONDING INCOME IS ASSESSED. ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 6 OF 12 9. BE THAT AS IT MAY, THE POINT OF DISPUTE IS W HETHER THE DIFFERENCE AMOUNT OF RS.1.12 CRORES IS LIABLE TO BE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE IS A CI VIL CONTRACTOR AND HENCE IT KEEPS ON RECEIVING ADVANCES FROM ITS CLIEN TS. THE ASSESSEE WOULD BE PREPARING RUNNING BILLS UPON COMPLETION OF AGREED STAGE OF CONSTRUCTION. ACCORDING TO THE ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE, THE INVOICE SO RAISED AND APPROVED BY THE CLIENT, IS RECOGNIZED AS CONTRACT RECEIPTS IN THE BOOKS OF ACC OUNT. HENCE THERE BOUND TO BE MISMATCH BETWEEN THE AMOUNT OF CO NTRACTUAL PAYMENTS MADE BY THE CLIENT AND THE CONTRACT RECEIP TS ACCOUNTED FOR BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT. 10. THE ASSESSEE HAS CLAIMED TDS AMOUNT OF RS.5, 57,448/- DURING THE YEAR UNDER CONSIDERATION. THE DETAILS O F THE SAME ALONG WITH CORRESPONDING CONTRACTUAL PAYMENTS HAVE BEEN TABULATE AS UNDER BY THE AO:- SL. NO. NAME OF THE DEDUCTOR TDS DEDUCTED TDS CLAIMED IN THE CURRENT YEAR GROSS RECEIPTS (IN RS.) 1 ICONICA CONSTRUCTIONS 36,868 36,868 18,43,382 2 PRESTIGE ESTATES PROJECTS LTD. 2,60,220 2,60,220 1,30,10,944 3 SAFALAAKAR BUILDTECH 2,25,047 2,25,047 1,12,52,281 4 SKYLARK ARCADIA PVT. LTD. 21,795 21,795 10,89,728 5 SKYLARK MANSIONS PVT. LTD. 13,518 13,518 6,75,894 TOTAL 5,57,448 5,57,448 2,78,72,229 11. WE NOTICE THAT THE ASSESSEE HAS RECEIVED THE AGGREGATE PAYMENTS OF RS.2,78,72,229/- FROM FIVE PARTIES. WE NOTICE THAT THE PAYMENT RECEIVED FROM M/S ICONICA CONSTRUCTIONS IS ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 7 OF 12 RS.18,43,382/- AND THE ASSESSEE HAS RECONCILED THE SAME AT PAGE 56 OF THE PAPER BOOK AS UNDER:- AMOUNT BOOKED IN SALES INVOICES - RS.11,13,237 ADVANCE AMOUNT - RS. 7,30,145 ---------------- TOTAL - RS.18,43,382 ============ THE ASSESSEE HAS ALSO FURNISHED LEDGER ACCOUNT COPY OF M/S ICONICA CONSTRUCTIONS AT PAGES 57 -58 OF THE PAPER BOOK, WH ICH SHOWS CREDIT BALANCE OF RS.7,30,145/-, BEING THE ADVANCE AMOUNT RECEIVED BY THE ASSESSEE. WE NOTICE THAT THE ASSESSEE HAS R ECONCILED THE RECEIPT OF RS.18,43,382/- FROM M/S ICONICA CONSTRUC TIONS FROM ITS BOOKS OF ACCOUNTS. IN OUR VIEW, THIS IS THE RIGHT METHOD OF RECONCILING THE PAYMENTS AND THE AMOUNT SHOWN IN PR OFIT AND LOSS ACCOUNT. HOWEVER, THE ASSESSEE HAS NOT FURNISHED SI MILAR MANNER OF RECONCILIATION FOR FOUR OTHER PARTIES MENTIONED IN THE TABLE ABOVE. IF THE ASSESSEE IS ABLE TO FURNISH INDIVIDUAL RECON CILIATION IN THE SIMILAR FASHION FOR THE REMAINING FOUR PARTIES, THE N THE AMOUNT SHOWN AS ADVANCE IN THE BOOKS OF ACCOUNTS SHOULD NO T BE CONSIDERED AS INCOME OF THE ASSESSEE FOR THE YEAR U NDER CONSIDERATION. 12. WE NOTICED THAT THE ASSESSEE HAS FURNISHED RECONCILIATION STATEMENT IN A CONSOLIDATED MANNER AS GIVEN BELOW:- AMOUNT BOOKED IN SALES INVOICES - 1,65,99,621 INCREASE IN ADVANCES - 57,30,866 ---------------- 2,23,30,487 ============ WE HAVE NOTICED THAT THE AGGREGATE AMOUNT OF PAYMEN T RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WA S RS.2,78,72,229/-, WHILE THE AMOUNT ACTUALLY RECONCI LED IN A SUMMARY MANNER WAS RS.2,23,30,487/-. IN ANY CASE, IN OUR VIEW, THE RECONCILIATION MADE IN SUMMARY MANNER WILL NOT GIVE CORRECT ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 8 OF 12 RESULT. IT IS THE DUTY OF THE ASSESSEE TO RECONCIL E THE PAYMENTS RECEIVED FROM EACH OF THE PARTIES, I.E., THE ASSESS EE SHOULD FURNISH RECONCILIATION STATEMENT FOR EACH OF THE PARTIES. IN FACT, THE ASSESSEE ITSELF HAS RECONCILED THE PAYMENTS RECEIVE D FROM M/S ICONICA CONSTRUCTIONS IN A PROPER MANNER. IN OUR V IEW, THE ASSESSEE SHOULD RECONCILE THE PAYMENTS RECEIVED FRO M OTHER FOUR PARTIES ALSO IN THE SIMILAR FASHION. 13. IN THE RECONCILIATION STATEMENT FURNISHED BY THE ASSESSEE IN SUMMARY MANNER, THE ASSESSEE HAS CLAIMED THAT THERE IS INCREASE IN WORK-IN-PROGRESS AMOUNT TO THE TUNE OF RS.2,66 ,01,891/- AND IT IS FURTHER STATED THAT THE ABOVE SAID WIP HAS BEEN OFFERED AS INCOME BY THE ASSESSEE. WE ARE UNABLE TO AGREE WITH THE S AID SUBMISSION. THE AMOUNT OF WORK IN PROGRESS CANNOT BE CONSIDER ED AS AN ITEM OF INCOME OFFERED BY THE ASSESSEE. WE EXPLAIN THE SAME. THE AMOUNT OF CLOSING STOCK/WORK IN PROGRESS IS CRED ITED TO THE PROFIT AND LOSS ACCOUNT UNDER REVENUE COST MATCHING PRINC IPLE, I.E., IN ORDER TO ARRIVE AT THE CORRECT PROFIT, ONE IS ENTIT LED TO DEDUCT ONLY CORRESPONDING COST. IN THE NORMAL PRACTICE, THE PU RCHASES MADE DURING THE YEAR WOULD BE BOOKED IN THE PURCHASES AC COUNT AND THE ENTIRE AMOUNT SHALL BE TRANSFERRED TO THE PROFIT AN D LOSS ACCOUNT. THIS KIND OF PRACTICE NECESSITATES CREDITING OF PRO FIT AND LOSS ACCOUNT WITH CLOSING STOCK. WE WILL EXPLAIN THIS P RACTICE WITH A SIMPLE ILLUSTRATION. 14. FOR EXAMPLE, IF A PERSON HAS PURCHASED 10,000 UNITS AT A COST OF RS.50/- PER UNIT, THEN THE PURCHASES ACCOUNT WIL L SHOW A BALANCE OF RS.5,00,000/- AND THE SAME SHALL BE TRAN SFERRED TO THE PROFIT AND LOSS ACCOUNT. IF THAT PERSON HAS SOLD O NLY 7000 UNITS, THEN HE IS NOT ENTITLED TO CLAIM DEDUCTION OF ENTIR E AMOUNT OF RS.5,00,000/-. UNDER REVENUE COST MATCHING PRINCIP LE, HE SHALL BE ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 9 OF 12 ENTITLED TO DEDUCT ONLY COST RELATING TO 7000 UNITS , VIZ, RS.3,50,000/- ONLY. SINCE THE ASSESSEE HAS TRANSFE RRED THE ENTIRE AMOUNT OF RS.5,00,000/- TO THE DEBIT OF PROFIT AND LOSS ACCOUNT, IT BECOMES NECESSARY THAT THE CLOSING STOCK OF 3000 UN ITS COSTING RS.1,50,000/- IS CREDITED TO THE PROFIT AND LOSS AC COUNT. IN FACT, THE AMOUNT OF RS.1,50,000/- IS GETTING NETTED WITH THE PURCHASE VALUE OF RS.5,00,000/-, THE NET RESULT OF WHICH IS THAT THE AMOUNT OF PURCHASES CLAIMED AS DEDUCTION WOULD BE RS.3,50,000 /- ONLY. IN THIS SITUATION, THE AMOUNT OF RS.1,50,000/- DOES NO T CONSTITUTE INCOME, RATHER IT IS A CASE OF ELIMINATION OF EXCES S AMOUNT OF PURCHASES BOOKED. SIMILAR IS THE CASE WITH WORK I N PROGRESS ALSO. HENCE THE AMOUNT OF WORK IN PROGRESS CANNOT BE TREA TED AS AN ITEM OF INCOME OFFERED BY THE ASSESSEE. 15. IN EFFECT, THE ASSESSEE HAS NOT RECONCILED T HE DIFFERENCE BETWEEN THE CONTRACTUAL PAYMENTS SHOWN IN TDS CERTI FICATES AND THE TURNOVER SHOWN IN THE PROFIT AND LOSS ACCOUNT E XCEPT IN THE CASE OF M/S ICONICA CONSTRUCTIONS. EVEN IN THE REC ONCILIATION STATEMENT FURNISHED IN A SUMMARY MANNER, A SUM OF RS.55,41,742/- REMAIN UN-RECONCILED. WE NOTICE THAT THE RECONCILIATION STATEMENT FURNISHED IN A SUMMARY MAN NER HAS ALSO NOT BEEN EXAMINED BY THE TAX AUTHORITIES. AS NOTIC ED EARLIER, THE DIFFERENCE HAS ARISEN MAINLY ON ACCOUNT OF TIMING D IFFERENCE IN RECOGNIZING THE CONTRACTUAL RECEIPTS AS INCOME. I N ANY CASE, SINCE THESE PAYMENTS HAVE BEEN RECEIVED THROUGH BANKING C HANNELS, IT SHOULD BE POSSIBLE FOR THE ASSESSEE TO RECONCILE TH E RECEIPTS AS WAS DONE IN THE CASE OF M/S ICONICA CONSTRUCTIONS. ACC ORDINGLY, IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THA T THE ASSESSEE MAY BE PROVIDED WITH ONE MORE OPPORTUNITY TO RECONCILE THE CONTRACTUAL PAYMENTS SHOWN IN THE TDS CERTIFICATE FURNISHED BY A PARTY WITH THE ENTRIES MADE IN THE BOOKS OF ACCOUNT. ACCORDIN GLY, WE DIRECT ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 10 OF 12 THE ASSESSEE TO PREPARE RECONCILIATION STATEMENT FO R EACH OF THE REMAINING FOUR PARTIES, VIZ., M/S PRESTIGE ESTATES PROJECTS LTD, M/S SAFALAAKAR BUILDTECH, M/S SKYLARK ARCADIA PVT LTD A ND M/S SKYLARK MANSIONS PVT LTD. THE RECONCILIATION STATE MENT FURNISHED FOR EACH OF THE ABOVE SAID FOUR PARTIES WOULD SHOW HOW THE PAYMENTS RECEIVED HAVE BEEN ACCOUNTED FOR BY THE AS SESSEE, WHICH WILL HELP THE ASSESSING OFFICER TO TAKE PROPER VIEW OF THE MATTER. 16. THE LD D.R SUBMITTED THAT THE ASSESSEE SHALL BE ENTITLED TO TDS CREDIT OF PROPORTIONATE AMOUNT ONLY, I.E., THE AMOUNT PROPORTIONATE TO CONTRACTUAL RECEIPTS RECOGNIZED AS INCOME. FOR EXAMPLE, THE TDS AMOUNT DEDUCTED BY M/S ICONICA CON STRUCTIONS WAS RS.36,868/- AGAINST THE PAYMENT OF RS.18,43,382 /-. WE HAVE NOTICED EARLIER THAT THE ASSESSEE HAS OFFERED A SUM OF RS. 11,13,237/- ONLY AS ITS INCOME AND THE BALANCE AMOU NT OF RS.7,30,145/- HAS BEEN SHOWN AS ADVANCE. HENCE, OU T OF THE TDS AMOUNT OF RS.36,868/-, THE ASSESSEE WOULD GET TDS C REDIT PROPORTIONATE TO THE AMOUNT OF RS.11,13,237/- AND THE CREDIT FOR BALANCE AMOUNT OF TDS WOULD BE GIVEN IN THE YEAR IN WHICH THE BALANCE CONTRACT RECEIPT OF RS.7,30,145/- IS OFFERE D AS INCOME. 17. THE LD D.R SUBMITTED THAT HER SUBMISSIONS AR E IN TUNE WITH THE PROVISIONS OF SEC.199(3) R.W. RULE 37BA OF I T RULES. HOWEVER, THE LD A.R HAS SUBMITTED THAT THERE ARE CERTAIN CAS E LAWS, WHICH HAVE HELD THAT THE ENTIRE AMOUNT OF TDS CREDIT SHOU LD BE GIVEN IRRESPECTIVE OF DISCLOSURE OF CORRESPONDING INCOME. ACCORDINGLY HE SUBMITTED THAT THE ISSUE OF GIVING CREDIT OF TDS AM OUNT MAY BE LEFT OPEN. 18. THE SUBMISSIONS MADE BY LD D.R, PRIMA FACIE , APPEAR TO BE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND RU LES. HOWEVER, IN ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 11 OF 12 VIEW OF THE CONTENTIONS OF LD A.R, WE LEAVE THIS IS SUE TO THE WISDOM OF THE ASSESSING OFFICER. 19. IN VIEW OF THE FOREGOING DISCUSSIONS, WE A RE OF THE VIEW THAT THE ISSUES CONTESTED BEFORE US REQUIRE FRESH EXAMIN ATION. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CI T(A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THEM IN THE LIGHT OF DISCUSSIONS MADE SUPRA. AS DIRECTED EARLIER, THE ASSESSEE SHALL FURNISH RECONCILIATION STATEMENTS FO R EACH OF THE PARTIES IN THE SIMILAR FASHION AS FURNISHED IN THE CASE OF M/S ICONICA CONSTRUCTIONS ALONG WITH THE RELEVANT LEDGE R COPIES. AFTER EXAMINING THE RECONCILIATION STATEMENTS AND DULY CO NSIDERING ANY OTHER INFORMATION AND EXPLANATIONS THAT MAY BE FURN ISHED BY THE ASSESSEE, THE AO MAY TAKE APPROPRIATE DECISION IN A CCORDANCE WITH LAW. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE, 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 15 TH JUNE, 2021. VG/SPS ITA NO.329/BANG/2020 M/S. INDIINFRABUILD CONSTRUCTIONS PVT. LTD., BANGAL ORE PAGE 12 OF 12 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.