M/s. Apex Construction Co, New Delhi V. ACIT, New Delhi

ITA 3784/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0655 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 06-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Assessee Lawyers: D R KOTHARI D R ANTHWAL
• Keywords: Opportunity of being heard
• Section: 144

Judgement Text

ITA NO. 3784/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3784/DEL/2010 A.Y. : 2006-07 M/S APEX CONSTRUCTION CO., 808, ASHOKA BHAWAN-93, NEHRU PLACE, NEW DELHI 110 019 (PAN/GIR NO. : AAGFA1780R) VS. ACIT, CIRCLE - 38(1), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. D.R. KOTHARI, D.R. ANTHWAL, ADVOCATE DEPARTMENT BY : MRS. ANUSHA KHURANA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 25/3/2 010 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUES RAISED READ AS UNDER:- (I) ON THE FACTS AND THE CIRCUMSTANCES OF CASE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING AN ADDITION OF ` 17,37,856/-. (II) THAT THE PAYMENT OF ` 17,37,856/- WAS NOT ACTUALLY RECEIVED BY APPELLANT FORM M/S SATYAM INSTITUTE OF FASHION TECHNOLOGIES, AS THIS PAYMENT WA S MADE TO THE SUPPLIERS WITHOUT THE CONSENT AND ITA NO. 3784/DEL/2010 2 KNOWLEDGE OF THE APPELLANT, WHEREAS THE MATERIAL I S TO BE SUPPLIED BY THE CONTRACTEE FREE OF COST AT SI TE AND WAS NOT PART OF THE CONTRACT, THUS THE PAYMENT I S IN DISPUTE IN THE COURT OF LAW. THE ASSESSEE NEITH ER CLAIMED MATERIAL / WORK CONTRACT TAX AS EXPENSES, NO R DECLARED THE PAYMENT MADE TO SUPPLIERS DIRECTLY ON BEHALF OF THE ASSEESSEE AS GROSS RECEIPT. THUS T DS OF ` 67,905/- IS THE ONLY TAXABLE AS AGAINST OF ` 17,18,957/-. (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS UNJUSTIFIED IN MAKING AN ADDITION OF ` 1,02,99,283/- AS INCOME OF THE ASSESSEE BEING THE TOTALS OF ALL 5 RA BILLS. 3. IN THIS CASE ASSESSMENT WAS FRAMED U/S 144 OF THE IT ACT. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DERIV ES INCOME FROM CIVIL CONSTRUCTION. AS PER THE ITS DETAILS ASSESSEE HA S DEPOSITED CASH TWICE AMOUNTING TO ` 2.50 LAKHS ON 5.4.2005. ASSESS EE EXPLAINED THAT IT HAD DEPOSITED CASH AMOUNTING TO ` 2.50 LAKHS ON 5 .4.2005 IN HDFC BANK, OUT OF THE CASH AVAILABLE AS PER THE CASH BOO K. AS REGARDS THE BALANCE CASH OF ` 2.50 LAKHS DEPOSITED ON 5.4.2005. ASSESSEES COUNSEL STATED THAT THE FIRM HAS NOT DEPOSITED ANOT HER AMOUNT. ASSESSING OFFICER FURTHER OBSERVED THAT AS PER THE ITS DETAILS ASSESSEES FIRM HAD RECEIVED CONTRACTS RECEIPTS AT ` 6,82,29,517/- FROM VARIOUS CONTRACTEES INCLUDING M/S SATYAM INSTITUT E OF FASHION. ASSESSEE HAD EXPLAINED THE CONTRACT RECEIPT OF ` 6 6510560/-. AS REGARDS THE BALANCE RECEIPT OF ` 1718957/- ASSESSE E STATED THAT IT HAS ITA NO. 3784/DEL/2010 3 NOT RECEIVED THE AMOUNT OF ` 1718957/- FROM M/S SATYA M INSTITUTE OF FASHION. ASSESSEE WAS ASKED TO EXPLAIN THIS AMOUNT. ASSESSEE COUNSEL WAS ASKED TO FURNISH THE CONFIRMATION FROM M /S SATYAM INSTITUTE OF FASHION BY 31.12.2008, BUT NO CONFIRMAT ION WAS RECEIVED. ASSESSING OFFICER OBSERVED THAT SINCE IT IS A TIME BARRING CASE, IT HAS LEFT NO OPTION BUT TO COMPLETE THE ASSESSMENT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD U/S 144 OF THE ACT. HENCE, HE HELD THAT SINCE THE ASSESSEE FAILED TO ADDUCE ANY EVIDENCE REGARDING AN Y RECEIPT OF ` 17,18,957/-, THE SAME IS ADDED TO THE RETURNED INCO ME. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ASSESSEE AGITATED AND TOOK THE GROUND THAT ACIT HAS ERRED IN MAKING AN ADDITION OF ` 1718957/- WHEREAS THIS PAYMENT WAS NOT RECEIVE D BY THE ASSESSEE FROM M/S SATYAM INSTITUTE OF FASHION AND DISPUTE WAS PENDING BEFORE THE DISTRICT COURT, GAUTAM BUDH NAGAR, UP. IT WAS SUBMITTED THAT THE INSTITUTE NEITHER MADE THE SAID PAYMENT NOR ISSUE ANY TDS. THE PAYMENT WAS IN DISPUTE AND THE CASE WAS FILED BY TH E PARTIES BEFORE FILING THE INCOME TAX RETURN. 4.1 UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) ELABORATELY CONSIDERED THE ISSUE. HE PRO CEEDED TO HOLD THAT THE ASSESSEE HAS RAISED BILLS TOTALING TO ` 1029928 3/- AND HELD THAT THIS SHOULD BE ADDED TO THE GROSS RECEIPT OF THE ASSESSE E. HE FURTHER HELD THAT THE EXPENSES INCURRED DURING THE YEAR HAS ALRE ADY BEEN DEBITED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT. HE FURTHE R OBSERVED THAT ASSESSEE HAS NOT FILED ANY EVIDENCE TO PROVE THAT ANY FURTHER EXPENSES IN RESPECT OF THE ABOVE AMOUNTS HAVE BEEN I NCURRED BY HIM DURING THE YEAR UNDER CONSIDERATION. HENCE, HE HEL D THAT NO DEDUCTION IS ALLOWED AND THEREFORE, THE ENTIRE AMOUNT OF ` 10 299283/- IS TO BE ITA NO. 3784/DEL/2010 4 ADDED TO THE ASSESSEES INCOME AND THE INCOME IS EN HANCED ACCORDINGLY. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. COUNSEL OF THE ASSESSEE SUBMITTED BEFORE US THAT LD . COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN AS MUCH AS HE HAS ADDED THE RUNNING BILLS WHICH INCLUDED THE AMOUNT PERTAINING TO THE PREVIOUS BILL AND HENCE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS COME TO A INFLATED GROSS RECEIPT FIGURE. HE FURTHER URGED TH AT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT BEEN ABLE TO APPRECI ATE THE FACTS OF THE CASE PROPERLY AND ALSO SUBMITTED THAT ASSESSEE M AY BE GIVEN ONE MORE OPPORTUNITY TO PRESENT THE CASE IN PROPER PROSP ECTIVE. BOTH THE COUNSEL FAIRLY AGREED THAT THE ASSESSEE HAS FAILED TO PRODUCE THE RELEVANT DOCUMENTS BEFORE THE ASSESSING OFFICER A ND UNDER THE CIRCUMSTANCES BOTH THE COUNSEL FAIRLY AGREED THAT TH E MATTER SHOULD BE REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. HENCE, IN THE INTEREST OF JUSTICE, WE REMI T THE ISSUES RAISED IN THE APPEAL TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD B E GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. ITA NO. 3784/DEL/2010 5 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12/01/2011 UP ON CONCLUSION OF HEARING. SD/- SD/- [R.P. TOLANI] [R.P. TOLANI] [R.P. TOLANI] [R.P. TOLANI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 12/01/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES