Odisha Construction Corporation Ltd., Bhubaneswar V. DCIT, Circle-2(2), Bhubaneswar

ITA 408/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5313 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 28-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAAD KIDWAI
• Assessee Lawyers: G N NAIKRAJAT KAR
• Keywords: Revised return
• Section: 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 408 /CTK/2016 : ASSESSMENT YEAR : 2010 - 2011 ITA NO.409/CTK/2016: ASSESSMENT YEAR : 2012 - 20 13 ODISHA CONSTRUCTION CORPN. LTD., UNIT - 8, GOPABANDHU NAGAR, NAYAPALI, BHUBANESWAR. VS. ACIT, CORPORATE CIRCLE - 1(2), BHUBANESWAR. PAN/GIR NO. AAACO 2571 K (APPELLANT ) .. ( RESPONDENT ) ITA NO.413/CTK/2016: ASSESSMENT YEAR : 2011 - 2012 ITA NO.414/CTK/2016: ASSESSMENT YEAR : 2012 - 20 13 ACIT, CORPORATE CIRCLE - 1(2), BHUBANESWAR VS. ODISHA CONSTRUCTION CORPN. LTD., UNIT - 8, GOPABANDHU NAGAR, NAYAPALI, BHUBANESWAR. PAN/GIR NO.AAACO 2571 K (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI G.N. NAIK/RAJAT KAR, AR REVENUE BY : SHRI SAAD KIDWAI, CIT DR DATE OF HEARING : 1 4 /1 2 / 2017 DATE OF PRONOUNCEMENT : 26 / 1 2 / 2017 O R D E R PER PAVAN KUMAR GADALE, JM ITA NO.408/CTK/2016 IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31.8.2016 OF THE CIT(A) - 1, BHUBANESWAR FOR THE ASSESSMENT YEAR 2010 - 2011. 2 2. ITA NO.413/CTK/2016 IS FILED BY THE REVENUE AGAINST THE ORDER DATED 31.8.2016 OF THE CIT(A) - 1, BHUBANESWAR FOR THE ASSESSMENT YEAR 2011 - 12. 3. THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER DATED 31.8.2016 OF THE CIT(A) - 1, BHUBANESWAR FOR THE ASSES SMENT YEAR 2012 - 2013 IN ITA NOS.409/CTK/2016 AND ITA NO.414/CTK/2016. 4. FIRST, WE TAKE UP THE APPEAL FOR THE ASSESSMENT YEAR 2010 - 2011 BY THE ASSESSEE. 5. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF FOLLOWING ADDITIONS: I) LOSS ON SALE OF ASSET : RS. 72,205/ - II) PRIOR PERIOD EXPENSES : RS.32,59,343/ - III) PROVISION FOR LEAVE ENCASHMENT: RS.74,05,677/ - 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXECUTION OF CONSTRUCTION CONTRACTS, PR OVIDING CONSTRUCTION CONSULTANCY AND SERVICES INVOLVING INFORMATION TECHNOLOGIES. RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 2011 WAS FILED BY THE ASSESSEE ON 8.10.2010 SHOWING TOTAL INCOME OF RS.2,17,76,068/ - . SUBSEQUENTLY, REVISED RETURN WAS FILED ON 29.3.2012 SHOWING TOTAL INCOME AT RS.2,02,26,154/ - . THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT DETERMINING THE TOTAL INCOME AT RS.3,37,16,050/ - , INTER ALIA, MAKING VARIOUS ADDITIONS/DISALLOWANCES TOTALLING TO 3 RS.1,34,89,899/ - UNDER DIFFERENT HEADS. ON APPEAL, THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE FOLLOWING ADDITIONS: I) LOSS ON SALE OF ASSET : RS. 72,205/ - II) PRIOR PERIOD EXPENSES : RS.32,59,343/ - III) PROVISION FOR LEAVE ENCASHMENT: RS. 74,05,677/ - 7. THE FIRST ISSUE RELATES TO DISALLOWANCE OF RS.72,205/ - ON ACCOUNT OF LOSS OF ASSETS. 8. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CLAIMED EXPENSES OF RS.72,205/ - TOWARDS LOSS ON SALE OF ASSETS. THE ASSESSING OFFICER HELD THAT THE LOSS ON SALE OF DEPRECIABLE ASSETS WAS NOT REVENUE IN NATURE AND, HENCE DISALLOWED THE CLAIM OF EXPENSES OF RS.72,205/ - U/S.37 OF THE ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE, WHICH WAS CONFIRMED IN FIRST AP PEAL. 9. BEFORE US, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS OFFERED PROFIT AND ALSO REFERRED TO PAGE OF PAPER BOOK, WHEREIN, THE ASSESSEE HAS DISCLOSED THESE FACTS. HE ALSO DREW OUR ATTENTION TO PAGE 116 OF PAPER BOOK AND SUBMITTED THAT PR OFIT ON SALE OF ASSETS WAS OFFERED BY THE ASSESSEE. 10. LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 1 1 . WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS CLAIMED EXPENSES OF RS.72,205/ - TOWARDS LOSS ON SALE OF ASSETS, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT 4 LOSS ON SALE OF DEPRECIABLE ASSET WAS NOT REVENUE IN NATURE. THE CIT(A) CONFIRMED TH E SAME. BEFORE US, LD A.R. REFERRED TO PAGE 123 OF PB AND SUBMITTED THAT THE PROFIT ON SALE OF ASSETS WAS OFFERED BY THE ASSESSEE. WE OBSERVE THAT THERE IS NO CLARITY IN RESPECT OF OFFERING OF PROFIT ON SALE OF ASSETS AND FOR NON - ADJUSTING OF SALE OF ASS ETS, THE CONCEPT OF GROSS BLOCK OF ASSETS HAS TO BE CONSIDERED AND IF ANY LOSS HAS TO BE CLAIMED, IT SHOULD BE ADJUSTED IN THE BLOCK OF ASSETS. SINCE THIS HAS NOT BEEN DONE BY THE LOWER AUTHORITIES , WE REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSING O FFICER TO RE - EXAMINE THE ISSUE AS PER OUR ABOVE OBSERVATION. THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE AS PER LAW. 12. THE NEXT ISSUE RELATES TO CONFIRMATION OF ADDITION OF RS.26,50,686/ - ON ACCOUNT OF PRIOR PERIOD EX PENSES. 13. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS ADJUSTED AN AMOUNT OF RS.32,59,343/ - TOWARDS PRIOR PERIOD EXPENSES, WHICH INCLUDES EXPENSES RELATED TO SALARY, DA , WAGES PAID TO LABOUR SUPPLIER , SALES TAX /VAT AND PROFESSIONAL CHARGES, ETC . THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING AND, THEREFORE, THE ABOVE AMOUNT DID NOT CRYSTALISE DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, HE DISALLOWED THE SAME. 14. ON APPEAL, THE CIT(A) HAS GRANTED RELIEF TO THE EXTENT OF PAYMENT OF ARREAR SALARY, D.A. AND PROFESSIONAL FEES AGGREGATING TO RS.6,08,657/ - WHEREAS THE CIT(A) HAS CONFIRMED THE ADDITION OF RS.25,45,985/ - TOWARDS 5 SALES TAX/VAT LIABILITY AS THE BILLS PER TAINS TO FINANCIAL YEAR 2008 - 09. THE CIT(A) ALSO CONFIRMED THE ADDITION OF RS.1,04,701/ - AS THERE WAS NO EXPLANATION OFFERED UNDER THE HEAD PRIOR PERIOD EXPENSES. HENCE, THE CIT(A) CONFIRMED THE DISALLOWANCE OF RS.26,50,686/ - . 15. LD A.R. OF THE ASSESSEE SUBSTANTIATED HIS VIEW BY REFERRING TO PAGE 111 IN AUDIT REPORT. HE FURTHER DREW OUR ATTENTION TO LEDGER ACCOUNT COPY REFERRED AT PAGE 135 OF PAPER BOOK AND DETAILS OF PRIOR PERIOD EXPENSES FOR THE FINANCIAL YEAR 2010 - 2011 AND SUBMITTED THAT THE ABOVE LI ABILITY COULD NOT BE PROVIDED DUE TO LACK OF DOCUMENT/INFORMATION FROM THE CONTRACTOR. HENCE, HE PRAYED TO REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY AND EXAMINE THESE DOCUMENTS AND ADJUDICATE THE ISSUE AFRESH. 16. CONTRA, LD D.R. SUPPORTED THE ORDER OF THE CIT(A). 17. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND FORCE IN THE SUBMISSION OF LD A.R. OF THE ASSESSEE THAT THESE FACTS WERE NOT DISCUSSED OR FILED DURING THE COURSE OF AS SESSMENT PROCEEDINGS. THEREFORE, WE CONSIDER IT FIT AND APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE AND VERIFY THE DOCUMENTS FILED BY THE ASSESSEE AND REDECIDE THE ISSUE AS PER LAW AFTER ALLOWING REASONABLE OPPORTUN ITY OF HEARING TO THE ASSESSEE. 18. THE LAST ISSUE RELATES TO PROVISION FOR LEAVE ENCASHMENT OF RS.74,05,677/ - . 6 19. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CLAIMED EXPENSES OF RS.74,05,677/ - TOWARDS UNAVAILABLE LEAVE ENCASHMENT. THE ASSESSING OFF ICER FURTHER OBSERVED THAT AS PER STATUTORY AUDIT REPORT AND SUGGESTION OF THE ACCOUNTANT GENERAL (A&E) UPTO 31.3.2010, THE AMOUNT OF PROVISION FOR LEAVE SALARY AND PENSION WAS RS.3.52 CRORES. HOWEVER, THE ASSESSEE HAS DEBITED TO THE PROFIT AND LOSS ACCOU NT OF RS.4.26 CRORES. THEREFORE, THE ASSESSING OFFICER DISALLOWED EXCESS PROVISION OF RS.74,05,677/ - . 20. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION OF RS.74,05,677/ - AS THE ASSESSEE COULD NOT EXPLAIN THE REASON OF EXCESS PROVISION. 21. LD A.R. OF THE A SSESSEE FILED A COMPARATIVE CHART REFERRED AT PAGE 149 OF PAPER BOOK, WHICH CONTAIN THE DETAILS OF CALCULATION OF LEAVE SALARY AND PENSION CON TRIBUTION AS MADE BY THE ASSESSEE AND A.G. FOR DEPUTED EMPLOYEES AND SUBMITTED THAT IT IS A CUMULATIVE EFFECT CARR Y FORWARD FROM THE EARLIER YEARS. LD A.,R. SUBMITTED THAT THIS HAS BEEN ADJUSTED IN SUBSEQUENT YEAR AND, THEREFORE, THERE IS NO NECESSITY OF DISALLOWANCE. 22. CONTRA, LD D.R. SUPPORTED THE ORDER OF THE CIT(A). 23. WE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE ORDERS OF LOWER AUTHORITIES AND THE DETAILS OF CALCULATION OF LEAVE SALARY AND PENSION CONTRIBUTION AS MADE BY THE ASSESSEE AND A.G. FOR THE DEPUTED EMPLOYEES, WE ARE OF THE CONSIDERED VIEW THAT THE CALCULATION HAS TO BE EXAMINED AND VERIFIED BY TH E ASSESSING OFFICER TO MAKE THE DISALLOWANCE. SINCE THIS HAS NOT BEEN DONE BY BOTH THE AUTHORITIES BELOW, WE DEEM IT FIT AND PROPER TO REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR 7 FURTHER VERIFICATION AND ADJUDICATION AS PER LAW. HENCE, THIS PART OF ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER. 24. IN THE RESULT, APPEAL FOR ASSESSMENT YEAR 2010 - 11 IS ALLOWED FOR STATISTICAL PURPOSES. NOW, WE TAKE UP THE APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2011 - 12. 25. THE SOLE GRIEVAN CE OF THE REVENUE IN THIS APPEAL IS THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.1,61,57,771/ - ON ACCOUNT OF UNASCERTAINED LIABILITY. 26. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED IN ITS PROFIT AND LOSS ACCOUNT IN SCHEUDLE - 8 - ESTABLISHMENT EXPENSES A SUM OF RS.1,61,57,771/ - TOWARDS ARREAR SALARY ON 6 TH PAY REVISION. THE ASSESSING OFFICER OBSERVED THAT THE PROVISION FOR ARREAR SALARY OF RS.1,61,57,771/ - DEBITED TO PROFIT AND LOSS ACCOUNT WAS NOT ALLOWABLE DEDUCTION U/S.37 OF THE ACT AND, THEREFORE, ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 27. BEFOR E THE CIT(A), THE ASSESSEE SUBMITTED AS UNDER: THE ABOVE PROVISION OF ARREAR SALARY HAS BEEN MADE ON COMPLETE CALCULATION AND ACTUAL DUE TO THE EMPLOYEES AND NOT MERELY ANTICIPATED OR ANY LUMP SUM ADHOC PROVISION. THE ABOVE PROVISION IS BASED ON OFFICE O RDER BEARING NO.OCC.E - I/679/08/13652(WE) DT. 13.12.2010 IN PURSUANCE TO THE APPROVAL BY THE ADDITIONAL SECRETARY TO GOVERNMENT DEPARTMENT OF WATER RESOURCES, ORISSA, BHUBANESWAR VIDE LETTER NO.IRR R .II.OCC - 8/10/29794/WR DT. 29.11.2010. AFTER THE ABOVE OFFI CE ORDER A THOROUGH CALCULATION WAS MADE CATEGORY WISE EMPLOYEES AND LIABILITY SO ARRIVED FURNISHED BELOW: 8 TOTAL ARREAR CONSIDERING 6 TH PAY COMMISSION REVISION PAY - RS.8,98,91,271.00 LESS: PROVISION ALREADY MADE F.Y.2008 - 09 - RS.5,75,12,130.00 LESS: PROVISION ALREADY MADE F.Y.2009 - 10 - RS. 1,62,21,370.00 RS.7,37,33,500.00 BALANCE AMOUNT PROVIDED DURING F.Y. 2010 - 11 VIDE CJV NO.171 DT. 31.03.2011 RS.1,61,57,771.00 COPIES OF THE OFFICE ORDER WITH ITS ENCLOSURES CATEGORY WISE CALCULATION AND JOURNAL VOUCHER IS ENCLOSED HEREWITH AS ANNEXURE - 7 SERIES. THE ABOVE FACTS WERE SUBMITTED BEFORE THE LEARNED ASSESSING OFFICER IN COURSE OF HEARING OF THE ASSESSMENT CASE ON 11.0 2.2014. HOWEVER, THE LEARNED ASSESSING OFFICER WITHOUT GIVING ANY OPPORTUNITY MADE THE ABOVE ADDITION ON A WRONG FOOTING BY CITING JUDGMENTS NOT APPLICABLE TO THE PRESENT CASE OF THE APPELLANT. THEREFORE, THE ADDITION OF RS.1,61,57,771/ - AS MADE BY . THE L EARNED ASSESSING OFFICER MAY KINDLY BE DELETED.' 28. THE CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: 9.2 1 HAVE CONSIDERED THE MATTER CAREFULLY. THE WHOLE ISSUE BOILS DOWN TO A FINDING AS TO WHETHER THE ARREAR SALARY OF RS.1,61,57,771/ - DEBITED TO THE P&L ACCOUNT UNDER THE HEAD PROVISION FOR ARREAR SALARY WAS MERELY A PROVISION OR AN ASCERTAINED LIABILITY. O N THE FACTS OF THE CASE, I FIND THAT THE LIABILITY WAS AN ASC ERTAINED ONE AND CALCULATED ON THE BASIS OF ACTUALS. IT WAS NOT AN UNASCERTAINED LIABILITY TO BE DETERMINED ON A FUTURE DATE. HENCE, THE AMOUNT CANNOT BE DISALLOWED ONLY BECAUSE THE WORD PROVISION IS USED IN THE ACCOUNTS. THE CASE LAWS RELIED ON BY TH E AO RELATE TO DISALLOWANCE OF UNASCERTAINED OR ANTICIPATED LIABILITY AND NOT LIABILITY WHICH CAN BE ACCURATELY ASCERTAINED. IN THIS VIEW OF THE MATTER, THE DISALLOWANCE OF RS.1,61,57,771 IS DELETED. 29. LD D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFI CER WHEREAS LD A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A). 9 30. WE CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE ORDERS OF LOWER AUTHORITIES, FIND THAT THE LIABILITY WAS AN ASCERTAINED ON E AND CALCULATED ON THE BASIS OF ACTUALS. WE ALSO FIND THAT NO SPECIFIC ERROR IN THE ORDER OF THE CIT(A) COULD BE POINTED OUT BY LD D.R. THEREFORE, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND GROU ND OF APPEAL OF THE REVENUE IS REJECTED . 31. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. NOW, WE TAKE UP THE CROSS APPEALS FOR THE ASSESSMENT YEAR 2012 - 13. 32. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012 - 13 WAS ORIGINALLY FILED ON 29.9.2012 SHOWING TOTAL INCOME OF RS.3,08,88,480/ - . SUBSEQUENTLY, A REVISED RETURN WAS FILED ON 28.3.2014 SHOWING A TOTAL INCOME OF RS.3,43,37,740/ - . THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. NOTICES U/S.143(2) AND 142(1) WERE ISSUED AND THE LD A.R. OF THE ASSESSEE APPEARED FROM TIME TO TIME AND CASE WAS DISCUSSED. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT DETERMINING THE TOTAL INCOME 3,43,37,740/ - , INTER ALIA, MAKING VARIOUS ADDITIONS/DIS ALLOWANCE. ON APPEAL, THE CIT(A) PARTLY ALLOWED THE APPEAL. HENCE, BOTH THE ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US. 3 3 . IN ITS APPEAL, THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF RS.34,60,000/ - MADE ON ACCOUNT OF SUSPENSE CREDIT ROLLING SINCE LO NG TIME . 10 3 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT IN THE HEAD OTHER CURRENT LIABILITY AND UNDER THE SUB HEAD SUSPENSE (CREDIT) OF RS.34 . 60 LAKHS, THE FOLLOWING AMOUNTS ARE OUTSTANDING AND ROLLING SINCE LONG: I) CWS 0533 : RS.8.04 LAKHS II) DEFUNCT PROJECT : RS.7.26 LAKHS III) CLOSED PROJECT : RS.. 1.60 LAKHS IV) IN H.O. : RS.11.45 LAKHS V) OTHER PROJECT : RS.6.25 LAKHS THE ASSESSING OFFICER OBSERVED THAT THE ABOVE AMOUNT WAS LYING IN SUSPENSE ACCOUNT SINCE LONG, WHICH RESULTED INTO UNDERSTATEMENT OF PROFIT AND, THEREFORE, HE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 35. BEFORE THE CIT(A), THE ASSESSEE FURNISHED THE RESULTANT DEBIT/CREDIT FIGURES IN RESPECT OF SUSPENSE CREDIT (LIABILITY) AND SUSPENSE DEBIT (ASSET) TO SUGGEST THAT THE ASSESSEE IS TAKING STEPS FOR ADJUSTMENT OF SUSPENSE ACCOUNT BOTH DEBIT AS WELL AS CREDIT. 36. THE CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE CONSIDERED THE MATTER. THE SUSPENSE CREDIT OPENING BALANCE STOOD AT RS.36,60,685/ - WHICH CAME DOWN FROM THE EARLIER PREVIOUS YEAR. DURING THE RELEVANT PREVIOUS YEAR, ADJUSTMENT TOOK PLACE TO THE EXTENT OF RS.2,00,544/ - AND THE CLOSING BALANCE CAME DOWN TO RS,34,60,141/ - . NO SUSPENSE CREDIT IS THERE FOR THE PREVIOUS YEAR 2011 - 12 RELEVANT TO THE AY 2012 - 13. MOREOVER, SUSPENSE DEBITS ARE ALSO THERE WITH OPENING BALANCE OF RS.1,31,29,093/ - AND CLOSING BALANCE OF RS.1,24,75,139/ - . THEREFORE, IN THE CIRCUMSTANCES OF THE ASSESSEE'S CASE, NO ADDITION CAN BE MADE ON ACCOUNT OF SUSPENSE CREDIT. HENCE, THE ADDITION OF RS.34 F 60,000/ - IS DELETED . 11 37. LD D.R. SUBMITTED THAT THERE IS NO CLARITY OF CALCULATION FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS WELL AS CIT(A). THEREFORE, THE MATTER NEEDS VERIFICATION BY THE ASSESSING OFFICER. 38. LD A.R. SUPPORTED THE ORDER OF THE CIT(A). 39. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE ORDERS OF LOWER AUTHORITIES, WE FIND FORCE IN THE ARGUMENTS OF LD D.R. THAT THERE IS NO CLARITY OF CALCULATION MADE BY THE ASSESSEE. PRIMA - FACIE, THE DEPARTMENT OR THE ASSESSEE HAS NOT COME FORWARD WITH THE DETAILS AND THE TRANSACTIONS OF SUSPENSE CREDIT OF EARLIER YEARS AND THE BALANCE OUTSTANDING AS ON THE SAID DATE. THE ASSESSING OFFICER HAS NOT VERIFIED THESE FACTS AND DEALT ON TH E SPECIFIC PROJECTS AND MADE ADDITION. WE ARE OF THE CONSIDERED OPINION THAT THE MATTER NEEDS REEXAMINATION IN DETAIL FROM EARLIER YEARS AND THE ASSESSING OFFICER IS DIRECTED TO CALL FOR THE INFORMATION AND THE ASSESSEE SHALL CO - OPERATE BY SUBMITTING DETA ILS TO THE ASSESSING OFFICER. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND REMIT THE FILE TO THE ASSESSING OFFICER FOR FRESH EXAMINATION AS PER LAW. 40. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF FOLLOWI NG ADDITIONS: I) UNDERSTATEMENT OF INCOME : RS.27,03,097/ - II) INT. ON CONSTRUCTION WORK ADVANCE FOR MORE THAN 20 YEARS : RS.1,06,05,000/ - III) HIRE CHARGES OF MACHINERY ROLLING SINCE LONG: RS.5,53,000/ - IV) LONG OUTSTANDING GUARANTEE FEES TO GOVT. RS. 7,71,000/ - V) NON DEPOSIT OF BOT, CPF : RS.15,21,579/ - VI) EXCESS PROVISION OF LEAVE SALARY : RS.32,86,000/ - 12 41. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE WITH REGARD TO ADDITION OF UNDERSTATEMENT OF INCOME OF RS.27,03,097/ - SUBMITTED THAT NECESSARY ADJUSTMENTS HAVE BEEN MADE IN THE SUBSEQUENT YEARS. AS THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING, ALL INCOMES ACCRUING OR ARISING TO THE ASSESSEE DURING A PARTICULAR ACCOUNTING YEAR HAVE TO BE TAXED IN THA T YEAR, NOTWITHSTANDING WHETHER SAME HAS BEEN SHOWN IN A SUBSEQUENT YEAR. HE ALSO SUBMITTED THAT THE ASSESSEE HAS OFFERED RS.27,03,097/ - AS INCOME AND DUE TAX HAS ALREADY BEEN PAID IN SUBSEQUENT YEAR. HE ALSO REFERRED TO THE CALCULATION MADE BY THE AUDIT OR PLACED AT PAGE 151 & 152 OF PAPER BOOK. THEREFORE, THE ADDITION MADE BY THE AUTHORITIES ARE NOT JUSTIFIED. 42. AS REGARDS TO ADDITIO N OF INTEREST ON CONSTRUCTION WORK ADVANCE FOR MORE THAN 20 YEARS OF RS.1,06,05,000/ - , LD A.R. SUBMITTED THAT THE ABOVE LIABILITY HAS BEEN ARRIVED AFTER SOME ADJUSTMENT MADE DURING THE FINANCIAL YEAR 2005 - 06 AGAINST THE WORK ADVANCE. HE SUBMITTED THAT THE ABOVE LIABILITY IS LYING SINCE FINANCIAL YEAR 2005 - 06 AND THIS BEING AN OUTSTANDING LIABILITY REQUIRES A LOT OF FORMALI TY AND INVOLVES A LOT OF COMPLIANCE AND APPROVAL FROM THE STATE GOVERNMENT FOR ADJUSTMENT AND, THEREFORE, IT REMAINED AS OUTSTANDING AND THERE BEING NO TRANSACTION DURING THE IMPUGNED YEAR, IT HAS NO TAX IMPACT ON THE ASSESSEE. 43. AS REGARDS TO THE HIRE C HARGES OF MACHINERY ROLLING SINCE LONG OF RS.5,53,000/ - , LD A.R. SUBMITTED THAT THE LIABILITY IS AWAITING ADJUSTMENT 13 SINCE LONG AND REQUIRES A LOT OF FORMALITY AND APPROVAL OF THE GOVERNMENT OF ODISHA AND THERE BEING NO TAX IMPACT ON THE ASSESSEE . 44. AS REGARDS TO ADDITION ON GUARANTEE FEES TO GOVT. OF ODISHA, LD A.R. SUBMITTED THAT THERE IS TYPOGRAPHICAL MISTAKE IN MENTIONING THE ADDITION OF RS.7,71,000/ - WHEREAS IT SHOULD BE RS.7,21,000/ - . HE SUBMITTED THAT THE ABOVE AMOUNT RECORDED IN THE BOOKS OF ACCOUNT PAYABLE TO GOVERNMENT OF ODISHA AS GUARANTEE FEES S INCE 1982, WHICH AWAITS ADJUSTMENT AGAINST THE AMOUNT PAYABLE/RECEIVABLE FROM GOVT. OF ODISHA. THEREFORE, THE ABOVE LIABILITY REMAINED AS OUTSTANDING. 45. WITH REGARDS TO ADDITION OF RS.15,21,579/ - ON ACCOUNT OF NON DEPOSIT OF BOT, CPF, LD A.R. SUBMITTED THAT THERE IS A CPF TRUST IN THE CORPORATION TO MANAGE THE PROVIDENT FUND OF THE REGULAR EMPLOYEES. THE CONTRIBUTION OF THE EMPLOYEES AND THE MATCHING CONT RIBUTION OF THE MANAGEMENT ARE MANAGED BY THE TRUST. HE SUBMITTED THAT FOR THE FINANCIAL YEAR 2009 - 2010 & 2010 - 2011, THERE WAS A SHORT FALL OF BOT, CPF OF RS.18,89,067.75. THEREFORE, THE TRUST MADE A CLAIM TO THE MANAGEMENT FOR PAYMENT OF THIS AMOUNT TO BALANCE THEIR EXPENDITURE. THE ABOVE FUND HAS BEEN CONSIDERED UNDER THE HEAD CONTRIBUTION TO STATUTORY SHORT FALL PAYABLE TO BOT, CPF IN THE BOOKS OF ACCOUNT AND THE AMOUNT HAS BEEN PAID/ADJUSTED DURING THE FINANCIAL YEAR 2012 - 13 AND 2013 - 14. HE ALSO REFERRED TO PAPER BOOK ANNEXURE - 5 PLACED AT PAGES 14 155 TO 159 WHEREIN, THE RELEVANT JOURNAL VOUCHERS AND PAYMENT VOUCHERS ARE PLACED. 46. AS REGARDS TO EXCESS PROVISION OF LEAVE SALARY & PENSION CONTRIBUTION OF RS.32,8 5,784 / - , LD A.R. OF THE ASSESSEE SUBM ITTED THAT THE ADDITION OF RS.32,8 5 , 784 / - IS A DIFFERENTIAL CUMULATIVE FIGURE OF CALCULATION MADE BY THE ASSESSEE AND A.G. AT RS.551.96 AND RS.519.10 LAKHS RESPECTIVELY. LD A.R. REFERRED TO COMPARATIVE CALCULATION SHEET FOR THREE FINANCIAL YEARS I.E. 200 9 - 10, 2010 - 11 AND 2011 - 12 PLACED AT PAPER BOOK PAGE 160. HE SUBMITTED THAT THE EXCESS PROVISION FOR LEAVE SALARY AND PENSION CONTRIBUTION IS THE DIFFERENCE BETWEEN THE CLOSING BALANCE OF LEAVE SALARY AND PENSION CONTRIBUTION AS ON 31.3.2012 AS CALCULATED BY THE ASSESSEE AND A CCOUNTANT GENERAL. 47. LD D.R. SUPPORTED THE ORDER OF THE CIT(A). 48. WE HEAR D THE RIVAL SUBMISSIONS AND PERUS ED THE ORDERS OF LOWER AUTHORITIES . WE OBSERVE THAT MANY OF THE ADDITIONS ARE OUTSTANDING SINCE LONG FROM THE GOVERNMENT OF ODISA FOR ADJUSTMENT S . AS THE ASSESSEE IS A GOVERNMENT OF ORISHA UNDERTAKING, IT IS HOPEFUL THAT THE SAME WILL BE ADJU S TED. IN THIS CASE, THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING. ACCORDING TO PAST BUSINESS PRACTICE, THE EXPENDITURE SPILLED OVER THE NEXT YEAR AND WAS DEBITED IN THE S UBSEQUENT YEAR S AND TO BE EXAMINED BY THE ASSESSING OFFICE R . THEREFORE, IN ORDER TO IMPART 15 SUBSTANTIAL JUSTICE, WE ARE OF THE CONSIDERED VIEW THAT ONE MORE OPPORTUNITY IS TO BE PROVIDED TO THE ASSESSEE TO REPRESENT ITS CASE WITH RELEVANT DOCUMENTS FILED IN THE APPELLATE PROCEEDINGS BEFORE THE ASSESSING OFFICER. WE, ACCORDINGLY, SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE ENTIRE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THE ASSESSING OFFICER IS DIRECTED TO PROVIDE REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE 49. IN THE RESULT, APPEALS FILED BY THE REVENUE AND ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUN CED ON 26 /1 2 /2017. SD/ - SD/ - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 26 /1 2 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE ASSESSEE: ODISHA CONSTRUCTION CORPN. LTD., UNIT - 8, GOPABANDHU NAGAR, NAYAPALI, BHUBANESWAR. 2. THE RESPONDENT. ACIT, CORPORATE CIRCLE - 1(2), BHUBANESWAR 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT - 1, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//