DCIT, Agra V. M/s Radha Construction Co., Agra

ITA 435/AGR/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2439 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 30-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Assessment record; TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 435/AGRA/2009 ASSTT. YEAR : 2005-06 DY. C.I.T., CIRCLE 1, VS. M/S. RADHA CONSTRUCTI ON CO., AGRA. 3-A, MANGLIK COLONY, VIBHAV NAGAR, AGRA (PAN : AADFR 8754 P) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI A.K. SHARMA, JR. D.R. FOR RESPONDENT : NONE (APPLICATION REJECTED) ORDER PER P.K. BANSAL, A.M. : THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE ORDER DATED 28.07.2009 OF THE CIT(A)- I, AGRA TAKING THE FOLLOWING EFFECTIVE GROUNDS : 1. THAT THE CIT(APPEALS)-1, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.8,31,955/- MADE ON ACCO UNT OF THE SUPPRESSION OF CONTRACT RECEIPTS, WITHOUT APPRECIATING THE FACTS O F THE CASE. 2. IF THE TDS HAS BEEN DEDUCTED ON THE AMOUNT WHIC H HAS BEEN RECEIVED AS ADVANCE FOR CONTRACT WORK THEN CREDIT O F TDS SHOULD BE GIVEN IN YEAR OF RECEIPT OR IN THE YEAR IN WHICH WORK HAS BEEN DO NE. 2. THE BRIEF FACTS RELATING TO THE ISSUE INVOLVED I N THIS APPEAL ARE THAT FROM THE PROFIT AND LOSS ACCOUNT SHOWS THAT THE ASSESSEE HAD SHOWN TOTA L WORK DONE/RECEIPTS OF RS.11,80,96,054/- WHILE AS PER TDS CERTIFICATES THE TOTAL AMOUNT RELE ASED BY THE CONTRACTEE WAS RS.15,16,83,460/-. ON BEING ASKED, THE ASSESSEE SUBMITTED THAT HE HAS BEEN FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING CONSISTENTLY AND HAS SHOWN THE CONTRACT RECEIPTS ON THE BASIS OF WORK DONE. THIS SYSTEM HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE P AST. THE ASSESSEE HAD ALSO FILED THE WORKING OF THE WORK DONE IN THE ASSESSMENT YEAR 2005-06. TH E ASSESSEE HAD ALSO FILED PHOTOCOPIES OF 2 DIFFERENT R.A.R. PREPARED BY M.E.S. AUTHORITIES. TH E ASSESSEE ALSO FURNISHED THE RECONCILIATION OF WORK DONE SHOWN WITH REFERENCE TO THE PAYMENT RECEI PTS AS PER TDS CERTIFICATES AS REPRODUCED AT PAGE 2 OF THE ORDER OF CIT(A) AS UNDER : S.NO. NARRATION AMOUNT (RS.) 1. WORK DONE IN 04-05 (A.Y. 2005-06) 11,80,96,054 2. ADVANCE FROM CONTRACTEE DURING THE YEAR 4,27,54, 639 TOTAL 16,08,50,693 3. LESS NET AMOUNT RETAINED (AS RETENTION MONEY BY CONTRACTEE DURING F.Y. 2004-05 (A.Y. 2005-06) (-) 83,35,278/- . TOTAL 15,25,15,415/- 4. RELEASED OLD WITHHELD AMOUNT (+) 6,71,339/- 5. PAYMENT AS PER THE TDS CERTIFICATES 15,31,86,754 /- 3. FROM THE ABOVE DETAILS, THE AO ASKED THE ASSESSE E AS TO WHY THE AMOUNT OF RS.6,71,339/- SHOWN AS RELEASED OLD WITHHELD AMOUNT WAS NOT OFF ERED FOR TAX EITHER IN EARLIER YEAR OR DURING THE YEAR UNDER CONSIDERATION. AFTER CONSIDERING THE EXPLANATION OF ASSESSEE, THE ASSESSING OFFICER WORKED OUT THE RECEIPTS AS PER TDS CERTIFIC ATES AS UNDER : S.NO. NAME OF THE COMPANY ISSUING TDS CERTIFICATE AMOUNT OF TOTAL RECEIPTS TDS DEDUCTED ON THE RECEIPTS 1. GE(I) R&D, GWALIOR 46413929 232805 2. GE(A/F), IZZATNAGAR 18464372 402490 3. GE(P) FY ITRASHI 17486003 373206 4. GE, BABINA 25105010 498860 5 GE-GOPALPUR ORISSA 34582327 722686 6. IOC 9631819 (9526923+104896) 213051 TOTAL 151683460 2444098 CONSIDERING THE ABOVE FIGURES, THE ASSESSING OFFICE R COMPUTED THE CONTRACT RECEIPTS FOR CONSIDERATION AS UNDER : S.NO. NARRATION AMOUNT (RS.) 1. WORK DONE 04-05 (A.Y. 2005-06) 11,80,96,054 2. ADVANCE FROM CONTRACTEE DURING THE YEAR 4,27,54, 639 TOT AL 16,08,50,693 3. LESS-NET AMOUNT RETAINED (AS RETENTION MONEY BY CONTRACTEE DURING F.Y. 2004-05 (A.Y. 2005-06) (-)83,35,278 TO TAL 15,25,15,415 3 4. (-) PAYMENT AS PER THE TDS CERTIFICATES 15,16,83 ,460 5. DIFFERENCE 8,31,955/- IN VIEW OF THE ABOVE DETAILS, THE ASSESSING OFFICER , ADDED THE DIFFERENCE OF RS.8,31,955/- TO THE INCOME OF ASSESSEE. 4. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AN D THE CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ASSESSMENT RECORDS AND FIND THE AO WAS NOT JUSTIFIED IN ADDING RS.4,27,54,639/- BEING ADVANCES RECEIVED FROM CONTRACTEES TO RS.11,80,96,0 54/- BEING WORK DONE CREDITED TO PROFIT & LOSS ACCOUNT FOR THE REASONS T HAT A. THE TOTAL OF THESE TWO AMOUNTS WORKS OUT TO RS.16,0 8,50,693/- WHEREAS THE TOTAL, ACTUAL RECEIPTS AS PER TDS CERTI FICATES ARE ONLY RS.15,16,83,460/-. B. THE AMOUNT OF RS.11,80,96,054/- CREDITED TO THE PRO FIT & LOSS ACCOUNT COMPRISES OF AMOUNTS RECEIVED AS WELL AS AM OUNTS DUE ON ACCRUAL BASIS FOR WORK DONE. C. THE AO HAS NOT DISPUTED THAT OUT OF TOTAL RECEIPTS OF RS.15,16,83,460/-, RS.4,27,54,639/- REPRESENTS ADVA NCES RECEIVED, WHICH DO NOT FORM PART OF CURRENT RECEIPTS, LIABLE FOR TAX. SIMILARLY, THE AO WAS NOT JUSTIFIED IN DEDUCTING RE TENTION MONEY OF RS.83,35,278/- (REFER CHART III ON PAGE 2) FROM CONTRACT RECEIPTS LIABLE FOR TAX SINCE SUCH MONEY HAS OBVIOUSLY BEEN RETAINED BY THE CONTRACTEE OUT OF PAYMENTS DUE TO THE APPELLANT AND, THEREFORE, THE SAME CONSTITUTES THE APPELLANTS CONTRACT RECEIPTS LIABLE FOR TAX. THE APPROPRIATE ILLUSTRATION OF TAX ABLE CONTRACT RECEIPTS IS AS UNDER :- CHART IV : S.NO. NARRATION AMOUNT (RS.) 1. TOTAL RECEIPTS AS PER TDS CERTIFICATES 15,16,83, 460 2. LESS : ADVANCES RECEIVED FR OM CONTRACTEES DURING THE YEAR TAKEN TO BALANCE SHEET (-)4,27,54,639 3. NET AMOUNT RECEIVED FOR WORK DONE F.Y. 2004-05 (A.Y. 2005-06) 10,89,28,821 4. ADD: NET AMOUNT RETAINED (AS RETENTION MONEY BY CONTRACTEES DURING F.Y. 2004-05(A.Y. 2005-06) (+)83,35,278 5. CONTRACT PAYMENTS AS PER CONTRACTEES 11,72,64,09 9 6. CONTRACT RECEIPTS AS PER P&L A/C 11,80,96,054 IN VIEW OF THE ABOVE, NO CONCLUSION OF SUPPRESSION OF CONTRACT RECEIPTS ARISES. CONSEQUENTLY, THE DIFFERENCE OF RS.8,31,955 /- WORKED OUT BY THE AO AND ADDED TO THE APPELLANTS INCOME IS NOT SUSTAINABLE AND HENCE DELETED. 4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE MATERIAL ON RECORD INCLUDING THE ORDERS OF THE TAX AUTHORITIES BELOW. A PERUSAL OF THE IMPUGNED ORDER REVEALS THAT THE CIT(A) WHILE DELETING THE ADDITION HAS RECORDED THE FINDIN G OF FACT THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING RS.4,27,54,639/- BEING ADVANCES RECEIVED FROM CONTRACTEES TO RS.11,80,96,054/- BEING WORK DONE CREDITED TO PROFI T & LOSS ACCOUNT. HE HAS ALSO ASSIGNED THE REASONS AS REPRODUCED ABOVE IN PARA 4 OF THIS ORDER . NO CONTRARY EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO DISCARD THE REASONING GIVE N BY THE CIT(A) FOR DELETING THE IMPUGNED ADDITION. AFTER CONSIDERING THE TOTALITY OF FACTS, THE CIT(A) HAS ALSO GIVEN THE ILLUSTRATIONS OF TAXABLE CONTRACT RECEIPTS AGAINST WHICH WE DO NOT F IND ANY MATERIAL ON RECORD TO BELIE THE SAME. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) ON THIS COUNT AND, THEREFORE, NO INTERFERENCE IS CALLED FOR . 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.03.2011. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 5 TH APRIL, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR