ACIT, UDAIPUR V. M/s. Khurana Construction, UDAIPUR

ITA 425/JODH/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5257 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 06-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 425 / JODH /201 4 (ASST. YEAR : 20 11 - 12 ) AC IT, CIRCLE - 1, UDAIPUR . VS. M/S. KHURANA CONSTRUCTIONS, 35 - A, AMBAVGARH, UDAIPUR. PAN NO. AABFK 6710 G (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : S HRI S.L. MOURYA - DR DATE OF HEARING : 1 0 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 1 0 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , UDAIPUR , DATED 2 3 /0 5 /201 4 . 2. IN GROUND NO.1, THE GRIEVANCE OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 76,55,531/ - ON ACCOUNT OF RETENTION MONEY & SECURITY DEPOSIT NOT INCLUDED IN THE GROSS RECEIPT BY THE ASSESSEE EVEN THOUGH ASSESSEE IS FOLLOWING MERCANTILE SYSTEM. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT RETENTION MONEY AND SECURITY DEPOSIT OF RS. 76,55,531/ - ARE NOT DECLARED IN THE GROSS CONTRACT RECEIPTS AND ACCOUNTED FOR IN THE PROFIT & 2 ITA NO. 425 / JODH /201 4 LOSS ACCOUNT , THEREFORE, THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION BY OBSERVING AS UNDER: - I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. AR AND FINDINGS OF THE LD. AO AND JUDICIAL PRONOUNCEMENTS RELIED ON AS MENTIONED ABOVE, IT IS NOTICED THAT THE HONBLE JURISDICTIONAL ITAT IN THE APPELLANT'S OWN CASE FOR AY 2009 - 10 IN ITA NO. 25/JU/2013 & MA NO . 62/JU/2013 DATED 07.03.2013 AND 13.08.2013 HAS ALLOWED THIS GROUND OF APPEAL AND DELETED THE ADDITION ON ACCOUNT OF ADDITION OF RETENTION MONEY & SECURITY DEPOSIT . FURTHER FOLLOWING THE RATIO OF THE HONBLE JURISDICTIONAL ITAT IN THE APPELLANTS CASE, I HAD ALSO ALLOWED THIS GROUND OF APPEAL AND PASSED THE ORDER IN ASSESSEES FAVOUR FOR A.Y. 2010 - 11. SINCE IN THE PRESENT APPEAL FACTS AND CIRCUMSTANCES OF THE CASE ARE SAME AND IDENTICAL SO I DONT HAVE ANY REASON TO DEVIATE FROM THE SAID DECISIONS AND RES PECTFULLY FOLLOWING THE RATIO OF THE HONBLE JURISDICTIONAL ITAT IN THE APPELLANTS OWN CASE FOR AY 2009 - 10 MENTIONED ABOVE I AM OF THE OPINION THAT THE LD. AO IS NOT JUSTIFIED IN MAKING ADDITION OF RS. 76,55,531/ - ON ACCOUNT OF RETENTION MONEY & SECURITY DEPOSIT AND THE SAME DESERVES TO BE DELETED . I ORDER ACCORDINGLY. THIS GROUND OF APPEAL IS ALLOWED . 5. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE ASSESSING OFFICER , WHEREAS NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE OF HEARING SENT TO THE ASSESSEE. 6 . WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS D E LETED THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 76,55,531/ - ON ACCOUNT OF RETENTION MONEY AND SECURITY DEPOSIT NOT INCLUDED IN THE GROSS CONTRACT RECEIPTS IN THE PROFIT & LOSS ACCOUNT BY THE ASSESSEE BY FOLLOWING THE ORD E R OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ASSESSMENT YEAR 2009 - 10 IN ITA NO. 25/JU/2013 AND MA NO. 62/JU/2013 DATED 07 /03/2013 & 13/08/2013 . DEPARTMENTAL REPRESENTATIVE COULD NOT GIVE ANY COGENT AND JUSTIFIABLE REASON AS TO WHY THE ORDER O F THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF SHOULD NOT BE FOLLOWED IN THE YEAR UNDER APPEAL . HENCE, WE FIND NO GOOD REASON TO INTERF ERE WITH THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS) 3 ITA NO. 425 / JODH /201 4 WHICH IS HEREBY CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7. GROUND NO.2 OF THE APPEAL OF THE REVENUE IS DIRECTED AGA I NST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DELE T IN G THE ADDITION OF RS. 14,40,500/ - ON ACCOUNT OF CASH PAYMENT IN CONTRAVENTION OF SEC. 40A(3) OF THE ACT. 8. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED SALARY EXPENSES OF RS. 1,05,52,482/ - AND BON U S OF RS. 12,04,502/ - . HE FOUND ON VERIFICATION OF THE DETAILS THAT THE ASSESSEE HAS P A I D SALARY AND BONUS IN CASH , IN EXCESS OF RS. 20,000/ - WHICH IS IN VIOLATION OF THE PROVISIONS OF SEC. 40A(3) OF THE ACT. HENCE, HE MADE DISALLOWANCE OF RS. 14, 40,500/ - AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 9. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DISALLOWANCE BY OBSERVING AS UNDER: - I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FINDINGS OF THE LD. AO. KEEPING INTO CONSIDERATION THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE I INCLINE TO AGREE WITH THE CONTENTION OF THE APPELLANT THAT THESE PAYMENTS ARE DULY COVERED UNDER THE EXCEPTIONS GIVEN UNDER RULE 6DD OF INCOME TAX RULES, 1962 BECAUSE THESE PAYMENTS WERE MADE TO PERSONS WHO WERE STATIONED TEMPORARILY AT DIFFERENT SITE OFFICES AND WERE NOT MAINTAINING BANK ACCOUNTS AND SOME OF THE PAYMENTS WERE MADE ON SUNDAYS. ACCORDINGLY, THE LD. AO IS NOT JUSTIFIED IN MAKING ADDITION OF RS. 14,40,500/ - ON ACCOUNT OF DISALLOWANCE U/S 40A(3) OF THE ACT AND THE SAME DESERVES TO BE DELETED. I ORDER ACCORDINGLY. THIS GROUND IS ALLOWED. 10. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE ASSESSING OFFICER. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE OF HEARING SENT TO THE ASSESSEE. 11. WE FIND THAT THE DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE COMMISSIONER OF INCOME TAX 4 ITA NO. 425 / JODH /201 4 (APPEALS). HE COULD NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT THE PAYMENTS OF SALARY WERE MADE BY THE ASSESSEE WERE NOT COVERED UNDER EXCEPTIONS OF RULE 6DD OF THE INCOME TAX RULES, 1961 . HENCE, WE FIND NO GOOD REA S ON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 12. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON THURSDAY , THE 1 0 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 1 0 TH MARCH , 201 6 . VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER