M/s. Sundrani Construction Company, RAIPUR V. Assistant Commissioner of Income-Tax,-1(1), RAIPUR

ITA 4/BIL/2012

• Counselvise Citation: 424714 RSA 2012
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 13-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: S C MAHESHWA RI
• Keywords: Business income
• Section: 263; 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER . IT A NO. 4 / BLPR./201 2 ( ASSESSMENT YEAR : 20 0 7 08 ) M/S. SUNDRANI CONSTRUCTION COMPANY C 88, SECTOR IV, DEVEN DRA NAGAR RANI LAXMIBAI, WARD NO.21 RAIPUR (C.G) PAN AAWFS1222N APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 1(1), RAIPUR (C.G) .... RESPONDENT ASSESSEE BY : SHRI S.C. MAHESHWARI REVENUE BY : SHRI D.K. JAIN DATE OF HEARING 1 8 .06.2015 DATE OF ORDER 19 .06.2015 O R D E R PER SHAMIM YA H YA, A .M. T HIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) DATED 20 TH DECEMBER 2011 , PASSED BY THE LEARNED CIT, RAI PUR, FOR THE ASSESSMENT YEAR 20 07 08 . 2. IN THIS CASE, THE ASSESSEE IS INVOLVED IN CIVIL CONSTRUCTION WORK. THE LEARNED CIT , WHILE EXERCISING HIS JURISDICTION OF REVISION UNDER M/S. SUNDRANI CONSTRUCTION COMPANY 2 SECTION 263 OF THE ACT, HELD THAT THE ASSESSEE HAD SHOWN INTEREST INCOME FROM BANK AT ` 11,15,724, WHICH WAS INCOME FROM OTHER SOURCES AND HAS NOT BEEN ADDED BY THE ASSESSING OFFICER. THE ASSESSEE EXPLAINED BEFORE THE LEARNED CIT THAT THE FIXED DEPOSITS WERE MADE FOR OBTAINING OVERDRAFT FACILITIES AND FOR FURNISHING AS SECURITY DEPOSITS FOR GETTING CONTRACTS. HENCE, IT WAS SUBMITT ED THAT INCOME FROM THEM CANNOT BE TREATED AS INCOME FROM OTHER SOURCES. IN THIS REGARD, THE ASSESSEES COUNSEL SUBMITTED A CATENA OF CASE LAWS. HOWEVER, THE LEARNED CIT WAS NOT CONVINCED. HE REFERRED TO THE DECISION OF THE HON'BLE SUPREME COURT IN PANDIAN CHEMICALS LTD. V/S CIT, [2003] 262 ITR 278 (SC), AND DIRECTED THE ASSESSING OFFICER TO RE COMPUTE THE INCOME OF THE ASSESSEE IN THE LIGHT OF THE ABOVE DIRECTION. AGAINST THE ABOVE ORDER OF THE LEARNED CIT, THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEA RD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THIS CASE, THE ASSESSING OFFICER HAS REJECTED THE BOOK RESULTS AND COMPUTED THE TOTAL INCOME BY APPLYING NET PROFIT @ 7% OF CONTRACT RECEIPT OF ` 6,96,82,104 WHICH WORKE D OUT TO ` 48,77,750. THE LEARNED CIT HAS HELD THAT THE INTEREST INCOME FROM BANK SHOULD HAVE BEEN ADDED SEPARATELY AS INCOME FROM OTHER SOURCES AMOUNTING TO ` 11,15,724. NOW THE ASSESSING OFFICER, WHILE MAKING M/S. SUNDRANI CONSTRUCTION COMPANY 3 THE ASSESSMENT, HAS NOT ADDED SEPARATELY INTE REST INCOME AS INCOME FROM OTHER SOURCES. THE ASSESSEE HAS BEEN SHOWING THE INCOME FROM BANK FDS AS BUSINESS INCOME CONSISTENTLY FOR A NUMBER OF YEARS IN THE PAST. THE DEPARTMENT HAS ACCEPTED THE SAME. HENCE, THERE WAS NO OCCASION FOR THE ASSESSING OFFICER TO MAKE A DEPARTURE FROM THIS PRACTICE. IT IS A SETTLED LAW THAT IF TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS APPLIED ONE OF THEM, THE CIT CANNOT EXERCISE JURISDICTION UNDER SECTION 263 OF THE ACT. MOREOVER, THAT INTEREST INCOME CAN ALSO BE CON SIDERED AS BUSINESS INCOME IS ALSO SUPPORTED BY CATENA OF CASE LAWS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE THE LEARNED CIT . HENCE, THE VIEW ADOPTED BY THE ASSESSING OFFICER WAS ONE OF THE POSSIBLE VIEWS. MOREOVER, THE CASE LAW RELIED UPON BY THE LEARNED CIT TO DISTINGUISH ALL THE SUBMISSIONS AND CASE LAWS BY THE ASSESSEE WAS THE APEX COURTS DECISION IN PANDIAN CHEMICALS LTD. (SUPRA). THE ABOVE SAID DECISION IS NOT DIRECTLY APPLICABLE IN THE FACTS OF THE CASE AS IN THAT CASE, THE HON'BLE A PEX COURT WAS CONSIDERING THE ISSUE OF QUALIFICATION OF INCOME UNDER SECTION 80HHC OF THE ACT, WHICH IS NOT AT ALL THE CASE IN THE PRESENT CONTEXT. ACCORDINGLY, WE HOLD THAT THE VIEW TAKEN BY THE ASSESSING OFFICER WA S ONE OF THE POSSIBLE VIEWS AND, HENCE, THE JURISDICTION EXERCISED BY THE LEARNED CIT WAS NOT PROPER. CONSEQUENTLY, THE ORDER PASSED BY THE LEARNED CIT IS HEREBY QUASHED. M/S. SUNDRANI CONSTRUCTION COMPANY 4 4. IN THE RESULT, APPEAL BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 19 TH JUNE 2015 SD/ - M UKUL K. SHRAWAT JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER RAI PUR , DATED : 19 TH JUNE 2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, BILASPUR CITY CONCERNED ; (5) THE DR, ITAT, RAIPUR ; (6) GUARD FILE . T RUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY SR. PRIVATE SECRETARY / ASSISTANT REGISTRAR ITAT, RAIPUR