DCIT, Calicut V. M/s.Chandragiri Construction Co., Kasargode

ITA 428/COCH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69110 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: C B M WARRIER

Judgement Text

1 ITA NO. 428 & 470/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 428 & 470/COCH.2013 (ASSESSMENT YEARS 2008-09 & 2009-10) DY.CIT, CC-1 VS CHANDRAGIRI CONSTRUCTION CO CALICUT PO THEKKIL, KASARGODE PAN : AABFC7523K (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. LATHA V KUMAR RESPONDENT BY : SHRI CBM WARRIER DATE OF HEARING : 03-12-2013 DATE OF PRONOUNCEMENT : 13-12-2013 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE REVENUE ARE DIRECSTED AGAI NST THE RESPECTIVE ORDERS OF THE CIT(A) I, KOCHI DATED 13-02-2013 FOR THE ASSESSMENT YEAR 2008-09 AND DATED 27-03-2013 FOR THE ASSESSMENT YEA R 2009-10. SINCE COMMON ISSUE ARISES FOR CONSIDERATION WE HEARD BOTH THE APPEALS TOGETHER AND DISPOSE OF THEM BY THIS COMMON ORDER. 2. THE FIRST COMMON ISSUE ARISES FOR CONSIDERATION IS IN RESPECT OF ASSESSMENT OF RETENTION MONEY IN THE CONTRACT RECEI PTS. 2 ITA NO. 428 & 470/COCH/2013 3. SMT. LATHA S KUMAR, THE LD.DR VERY FAIRLY SUBMIT TED THAT THE VERY SAME ISSUE CAME UP BEFORE THIS TRIBUNAL FOR THE ASS ESSMENT YEAR 2002-03. THIS TRIBUNAL, BY MAJORITY OPINION, FOUND THAT THE RETENTION MONEY DID NOT ACCRUE TO THE ASSESSEE BY FOLLOWING THE EARLIER ORD ER OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE. WE HEARD SHRI CBM WARRIER, TH E LD.REPRESENTATIVE FOR THE ASSESSEE ALSO. 4. IT IS NOT IN DISPUTE THAT ON A DIFFERENCE OF OPI NION AMONGST THE MEMBERS OF THIS TRIBUNAL IN ITA NOS 832, 857, 681 & 861 (COCH)/2008 FOR THE ASSESSMENT YEARS, 2003-04, 2003-04, 2004-05 & 2 005-06 RESPECTIVELY, THE ISSUE OF ASSESSABILITY OF RETENTION MONEY IN CO NTRACT RECEIPTS WAS REFERRED TO THE THIRD MEMBER. BY MAJORITY OPINION, IT WAS FOUND THAT RETENTION MONEY RETAINED BY THE CONTRACTEE ACCRUES TO THE ASSESSEE ONLY WHEN IT WAS RETURNED TO THE ASSESSEE. THE THIRD ME MBER HAS PLACED HIS RELIANCE ON THE JUDGMENTS OF THE MADRAS HIGH COURT IN EAST COAST CONSTRUCTION INDIA LTD VS 283 ITR 297 (MAD) AND CIT VS IGNIFLUID BOILERS (I) LTD 283 ITR 295 AND CIT VS P&C CONSTRUCTIONS (P) LT D 318 ITR 113. IN VIEW OF THE DECISION OF THE TRIBUNAL BY MAJORITY OP INION IN THE ASSESSEES OWN CASE, THIS BENCH OF THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT THE ASSESSEE HAS NO RIGHT TO RECEIVE THE MONEY BY VIRTU E OF CONTRACT BETWEEN THE PARTIES, THEREFORE, THE RETENTION MONEY COULD N OT BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. IN OTHER WORDS, THE RETENTION MONEY WOULD 3 ITA NO. 428 & 470/COCH/2013 BE INCLUDED ONLY WHEN IT IS ACTUALLY RECEIVED BY TH E ASSESSEE. IN VIEW OF THE DECISION OF THIS TRIBUNAL FOR THE EARLIER ASSES SMENT YEARS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHOR ITY. ACCORDINGLY, THE SAME IS CONFIRMED. 5. THE NEXT ISSUE FOR ASSESSMENT YEAR 2008-09 IS WI TH REGARD TO DISALLOWANCE OF LABOUR EXPENDITURE. 6. SMT. LATHA V KUMAR, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED BOOKS OF ACCOUNT FOR THE EXPENDITURE INCU RRED. THE EXPENDITURE INCURRED IS NOT SUPPORTED BY ANY EVIDENCE. THEREFO RE, THE ASSESSING OFFICER DISALLOWED 5% OF THE EXPENDITURE. HOWEVER, THE CIT(A) BY FOLLOWING THE ORDER OF THIS TRIBUNAL IN ITA NO.643/COCH/2010 DATED 27-04-2012 FOR THE ASSESSMENT YEAR 20078-08 IN ASSESSEES OWN CASE RESTRICTED THE DISALLOWANCE TO 1%. IN VIEW OF THE ORDER OF THIS T RIBUNAL FOR THE ASSESSMENT YEAR 2007-08 IN ASSESSEES OWN CASE CONF IRMING THE DISALLOWANCE AT 1% OF THE EXPENDITURE, ON IDENTICAL CIRCUMSTANCES THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. 4 ITA NO. 428 & 470/COCH/2013 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DECEMBER, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 13 TH DECEMBER, 2013 PK/- COPY TO: 1. DY.CIT, CENT.CIR.1, CALICUT 2. M/S CHANDRAGIRI CONSTRUCTION CO, PO THEKKIL, KAS ARGODE 3. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-I, 2 ND FLOOR, SAN JUAN TOWERS, OLD RAILWAY STATION ROAD, ERNAKULAM NORTH, KOCHI-682 01 8 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH