DCIT, New Delhi V. M/s. Standard Tele Tower Pvt. Ltd., New Delhi

ITA 4480/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3597 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 12-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 26-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHARY
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A. NO. 4480/DEL/2013 (ASSESSMENT YEAR 2010-11) APPELLANT BY : SMT. BEDOBANI CHAUDHARY, SR. DR RESPONDENT BY : SH. PIYUSH KAUSHIK, ADV. DATE OF HEARING : 12.04.2017 DATE OF PRONOUNCEMENT : 25.04.2017 ORDER PER BEENA A PILLAI, JM: 1. THE PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER DATED 10.05.2013 PASSED BY LD. CIT(A)-XII, NE W DELHI FOR ASSESSMENT 2010-11 ON FOLLOWING GROUNDS OF APPE AL: 1. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITIONS ON ACCOUNT OF DEFERRED REVENUE RECEIPTS OF RS. 63,26,5307- IN THE YEAR UNDER CONSIDERATION.' 2. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITIONS ON ACCOUNT OF INTEREST AMOUNTING TO RS.46,22,754/-.' 3. THE APPELLANT CRAVES TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL.' DCIT CIRCLE-9(1), ROOM NO. 163 C. R. BUILDING NEW DELHI VS. STANDARD TELE TOWER PVT. LTD. 3457/D-III, VASANT KUNJ, NEW DELHI GIR/PAN: AAJCS9262N (RESPONDENT) (APPELLANT) 2 ITA NO. 4480/DEL/2013 (AY 2010-1 1) 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSEE HAD FILED ITS RETURN OF INCOME ON 29.03. 2012 DECLARING TOTAL LOSS OF RS.10,45,903/-. THE RETURN WAS PROCESSED UNDER SECTION 143(1) AND SUBSEQUENTLY SEL ECTED FOR SCRUTINY. IN RESPONSE TO STATUTORY NOTICES REPR ESENTATIVE OF ASSESSEE APPEARED BEFORE ASSESSING OFFICER AND F ILE DETAILS AND DOCUMENTS AS CALLED FOR FROM TIME TO TIME. 3 . LD. AO OBSERVED THAT ASSESSEE IS A COMPANY AND IS IN BUSINESS OF SALE AND INSTALLATION OF TELECOMMUNICAT ION TOWERS, CONSULTANCY SERVICES FOR PROJECTS MANAGEMEN T AND OTHER ALLIED SERVICES. ASSESSING OFFICER CONCLUDED THE ASSESSMENT PROCEEDINGS BY MAKING ADDITIONS AMOUNTIN G TO RS.63,26,530/- ON ESTIMATED INCOME ON CONTRACT ADVA NCE RECEIVED FROM INDU PROJECTS LTD., AND AN ADDITION O F RS.46,22,754/- ON ACCOUNT OF INTEREST PAID TO BANK ON GROUND THAT LOAN, NOT USED FOR BUSINESS PURPOSES. 4. AGGRIEVED BY ASSESSMENT ORDER, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHO DELETED ADDITIONS MAD E BY ASSESSING OFFICER. 5. AGAINST ORDER PASSED BY LD. CIT(A), REVENUE IS IN APPEAL BEFORE US NOW. 6. GROUND NO. 1 HAS BEEN RAISED BY REVENUE AGAINST ADDITION OF RS.63,26,530/- BEING DELETED. 3 ITA NO. 4480/DEL/2013 (AY 2010-1 1) 7. LD. DR SUBMITTED THAT ASSESSING OFFICER WAS RIGHT IN FOLLOWING PERCENTAGE COMPLETION METHOD. HE SUBMITTE D THAT M/S INDU PROJECTS MADE PAYMENT TO ASSESSEE AFTER DEDUCTING TDS. HE SUBMITTED THAT ASSESSEE RECEIVED INCOME DURING YEAR, ON WHICH TDS HAS BEEN CLAIMED BY ASSES SEE IN ITS RETURN FILED. LD. DR THUS SUBMITTED THAT ASSESS EE HAD CONCEALED DEFERRED REVENUE RECEIPT AND HAD NOT PROV IDED DETAILS OF EXPENDITURE INCURRED ON THIS ACCOUNT. 8. ON THE CONTRARY LD. AR SUBMITTED THAT ASSESSEE RECEIVED ADVANCE OF RS.7,90,81,632/- FROM M/S INDU PROJECTS LTD., FOR CARRYING OUT LAND DEVELOPMENT WO RK. HE SUBMITTED THAT SINCE PROJECT WAS NOT COMPLETED, NEI THER REVENUE NOR EXPENSES IN CONNECTION WITH THE SAID AD VANCES WAS RECOGNIZED IN INCOME OR EXPENSES. HE SUBMITTED THAT ENTIRE AMOUNT WAS SHOWN AS WORK IN PROGRESS, AS PER AUDITED ACCOUNTS, WHICH HAVE BEEN ACCEPTED BY ASSES SING OFFICER. LD. AR FURTHER SUBMITTED THAT ASSESSEE FOL LOWED COMPLETED CONTRACT METHOD OF ACCOUNTING, AND ENTIRE REVENUE AND EXPENSES ARE ACCOUNTED FOR, AT COMPLETI ON OF PROJECTS. HE SUBMITTED THAT ASSESSEE OFFERED TO TAX INCOME FROM THE ADVANCES RECEIVED IN NEXT YEAR ON COMPLETI ON OF PROJECT, WHICH IS IN FACT MORE THAN THE ADDITION ES TIMATED BY ASSESSING OFFICER IN CURRENT YEAR. LD. AR FURTHER S UBMITTED THAT ASSESSING OFFICER HAD INITIATED ENQUIRY UNDER SECTION 133(6) AND HAD RECEIVED REPLY FROM M/S INDU PROJECT S LTD., 4 ITA NO. 4480/DEL/2013 (AY 2010-1 1) CONFIRMING THAT THEY HAVE PAID ADVANCE AMOUNT OF RS.7,90,81,632/- TO ASSESSEE FOR LAND DEVELOPMENT W ORK. LD. AR PLACED HIS RELIANCE UPON DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. BILAHARI INVESTMENTS P VT.LTD., REPORTED IN 299 ITR 1. 9. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US. 10. IT IS OBSERVED THAT ASSESSING OFFICER HAS MADE ADD ITION ON AN ESTIMATED BASIS ON ADVANCES RECEIVED BY ASSES SEE AND BROUGHT TO TAX AN AMOUNT OF RS.63,26,530/-, BEING 8 % OF ADVANCE RECEIVED IN YEAR UNDER CONSIDERATION. ASSES SING OFFICER AT THIS JUNCTURE IGNORED THAT ASSESSEE HAD ACTUALLY EARNED PROFIT ON THIS ADVANCES IN THE NEXT ASSESSME NT YEAR. 11. ON PERUSAL OF AUDITED ACCOUNTS PLACED BEFORE US FO R YEAR UNDER CONSIDERATION AS WELL AS IN THE NEXT ASS ESSMENT YEAR, IT IS CORRECT THAT ASSESSEE DECLARED PROFIT O N THESE ADVANCE IN ASSESSMENT YEAR 2011-12. AS ASSESSEE EXP LAINED NATURE OF PAYMENT ALONG WITH CONFIRMATION FROM PART Y WHO HAD ADVANCED MONEY, WE DO NOT FIND ANY INFIRMITY IN FINDINGS OF LD. CIT(A). ACCORDINGLY, THIS GROUND RA ISED BY REVENUE STANDS DISMISSED. 12. GROUND NO. 2 RAISE IN RESPECT OF ADDITION OF RS. 46,22,754/- BEING DELETED ON ACCOUNT OF INTEREST PA ID TO BANK. 5 ITA NO. 4480/DEL/2013 (AY 2010-1 1) 13. LD. DR SUBMITTED THAT COULD NOT ESTABLISH THAT BOR ROWED FUNDS HAD BEEN UTILIZED FOR ITS BUSINESS ACTIVITIES UNDERTAKEN DURING YEAR UNDER CONSIDERATION. HE SUBMITTED THAT ASSESSEE FAILED TO ESTABLISH ANY NEXUS OF FUNDS BORROWED FRO M BANK DURING YEAR UNDER CONSIDERATION FROM ITS BUSINESS A CTIVITIES. LD. DR SUPPORTED THE ADDITION MADE BY LD. AO. 14. ON THE CONTRARY, LD. AR SUBMITTED THAT LOAN WAS USE D FOR BUSINESS PURPOSES WHICH IS VERY CLEAR FROM BALANCE S HEET ITSELF. HE SUBMITTED THAT LOAN AMOUNT WAS MAINLY UT ILIZED FOR REDUCTION OF CREDITORS WHICH WERE OF ABOUT RS. 20 C RORE AND BEEN REDUCED TO RS. 8 CRORES, FOR YEAR UNDER CONSID ERATION. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH TH E SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US. 15. ON PERUSAL OF BALANCE SHEET AND AUDITED ACCOUNTS W E AGREE WITH SUBMISSIONS MADE BY LD. AR THAT LOAN OBTA INED FROM BANK WAS UTILISED TO REDUCE CREDITORS AND THER EFORE, IT CANNOT BE SAID TO HAVE BEEN USED FOR ANY OTHER PURP OSE OTHER THAN BUSINESS. WE THEREFORE, DO NOT FIND ANY INFIRM ITY IN THE ADDITION BEING DELETED BY LD. CIT(A). ACCORDINGLY, THIS GROUND RAISED BY REVENUE STANDS DELETED. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH APRIL, 2017. SD/- SD/- (R. K. PANDA) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 25.04.2017 @MIT.