ACIT, New Delhi V. M/s. Brij Gopal Construction Co., New Delhi

ITA 45/DEL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6595 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2017
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO. 45/DEL/2017 [ASSESSMENT YEAR: 2009-10] ACIT, CIRCLE-62(1), NEW DELHI M/S BRIJ GOPAL CON STRUCTION CO. ( NOT KNOWN AS M/S BRIJ GOPAL CONSTRUCTION COMPANY PVT. LTD. ), A-7/2, SHIVAJI APARTMENT, SEC-14, ROHINI NEW DELHI - 110085 PAN - AADFB4527A REVENUE ASSESSEE CO NO.38/DEL/2017 (ARISING OUT OF ITA NO. 45/DEL/2017) [ASSESSMENT YEAR: 2009-10] M/S BRIJ GOPAL CONSTRUCTION CO. ( NOT KNOWN AS M/S BRIJ GOPAL CONSTRUCTION COMPANY PVT. LTD. ), A-7/2, SHIVAJI APARTMENT, SEC-14, ROHINI NEW DELHI - 110085 ACIT, CIRCLE-62(1), NEW DELHI PAN - AADFB4527A ASSESSEE REVENUE REVENUE BY SMT. RINKU SINGH ASSESSEE BY SHRI GAUTAM JAIN & SHRI LALI MOHAN DATE OF HEARING 01/08 /2019 DATE OF PRONOUNCEMENT 02 /08 /2019 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE AND CROSS OBJECTION OF T HE ASSESSEE ARE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-2, NEW DELHI, D ATED 30/09/2016 PERTAINING TO ASSESSMENT YEAR 2009-10. 2 ITA NO.45/DEL/2017 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT TH E LD. CIT(A) ERRED IN DELETING THE ADDITIONS OF RS.2,07,84,177/- MADE BY THE AO ON ACC OUNT OF PROVISIONS OF SALES TAX. IN ITS CROSS OBJECTION, THE ASSESSEE HAS CHALLENGED TH E VALIDITY OF THE ORDER DATED 11/08/2015 FRAMED U/S 154 OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ORIGINAL ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 01/12/2011. THE INCOME OF RS.1,37,16,810/- WAS ASSESSED AGAINST RETURNED INCOME OF RS.98,69,500/-. AUDIT SCRUTINY REVEALED THAT THE ASSESSEE HAD BEEN MAKING PROVISIONS FOR SALES TAX E ACH AND EVERY YEAR WITHOUT MAKING ACTUAL PAYMENT AND DEBITING THE SAME IN THE TRADING AND PROFIT & LOSS ACCOUNT. DURING THE FINANCIAL YEAR UNDER CONSIDERATION, THE ASSESSE E HAS DEBITED RS.2,07,84,177/- ON ACCOUNT OF PROVISIONS FOR SALES TAX IN THE TRADING ACCOUNT AND SHOWN AS LIABILITY IN THE BALANCE SHEET. 4. ON THESE FACTS, THE AO ISSUED NOTICE U/S 154 OF THE ACT CALLING FOR EXPLANATION AS TO WHY THE AFORESAID PROVISION SHOULD NOT BE DISALL OWED. ON RECEIVING NO PLAUSIBLE REPLY, THE AO RECTIFIED HIS ASSESSMENT ORDER AND MADE THE DISALLOWANCE ON ACCOUNT OF PROVISIONS OF SALES TAX AND ADDED A SUM OF RS.2,07, 84,177/-. 5. BEFORE THE LD. CIT(A), IT WAS STRONGLY CONTENDED THAT THE SALES TAX/WORKS CONTRACTS TAX @4% WAS DEDUCTED AT SOURCE BY ITS CUSTOMERS AT THE TIME OF PAYMENT AND THE ASSESSEE HAD VAT INPUT CREDIT AVAILABLE ALSO ON INP UTS UTILISED IN ITS CONSTRUCTION ACTIVITIES REFLECTED AS ASSET IN THE BALANCE SHEET. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE HAS SUFFICIENT CREDIT AGAINST SALES TAX PR OVISIONS MADE DURING THE YEAR UNDER 3 ITA NO.45/DEL/2017 CONSIDERATION, THEREFORE, THE ACTION OF THE AO IS U NCALLED FOR AND DISALLOWANCE MADE SHOULD BE DELETED. 6. THE LD. CIT(A) AFTER CONSIDERING THE FACTS AND T HE SUBMISSION HELD AS UNDER:- 3.4.4. FURTHER THE APPELLANT VIDE ITS SUBMISSIONS DATED 28.08.20416 ALSO STATED THAT ASSESSING OFFICER UNDER VAT ACT, 2 003 HAD COMPUTED THE SALES TAX LIABILITY OF THE APPELLANT AT RS.1,77 .77,218/- AS AGAINST A PROVISIONS OF RS.2,07,84,177/-. AS A RESULT THERE W AS A DIFFERENCE OF RS.30,06,969/- IN RESPECT OF THE PROVISION MADE BY THE APPELLANT DURING THE FINANCIAL YEAR 2008-09 RELEVANT TO ASSESSMENT Y EAR 2009-10 AND ACTUAL LIABILITY COMPUTED BY THE ASSESSING AUTHORIT Y UNDER VAT ACT, 2003. ALSO, THE ASSESSING OFFICER UNDER VAT ACT, 20 03 HAD RESTRICTED THE INPUT TAX CREDIT TO RS.2,56,16,785/- AS AGAINST CLAIM OF RS.2,64,24,058/- OUTSTANDING IN BOOKS OF ACCOUNTS O F THE APPELLANT. THUS THERE WAS NET RESTRICTION OF INPUT TAX CREDIT BY RS.8,07,273/-. IN A NUTSHELL, THE PROVISION FOR LIABILITY OF SALES TAX MADE BY THE APPELLANT WAS NET EXCESSIVE BY RS.21,99,686/- (RS.30,06,959/- RS.8,07,273). THIS SUM OF RS.21,99,686 STANDS DULY OFFERED AS INC OME IN THE FINANCIAL YEAR 2011-12 RELEVANT TO ASSESSMENT YEAR 2012-13 BY THE APPELLANT, WHICH WAS DULY ASSESSED AND ACCEPTED IN THE ORDER D ATED 12/12/2014 U/S 143(3) OF THE ACT. 7. BEFORE US, THE LD. DR COULD NOT POINT OUT ANY FA CTUAL ERROR IN THE FINDINGS OF THE LD. CIT(A). ON THE CONTRARY, WE FIND THAT THE LD.CI T(A) HAS GIVEN CATEGORICAL FINDINGS THAT A SUM OF RS.21,99,686/- WHICH WAS FOUND TO BE NET E XCESSIVE, HAS BEEN DULY OFFERED AS INCOME IN FINANCIAL YEAR 2011-12 RELEVANT TO AY 201 2-13, WHICH WAS DULY ASSESSED AND ACCEPTED IN THE ORDER DATED 12/12/2014 FRAMED U/S 1 43(3) OF THE ACT. 8. THE FACTS RELATING TO THE COMPUTATION OF NET EXC ESSIVE IN RESPECT OF PROVISION FOR LIABILITY OF SALES TAX HAS BEEN DISCUSSED ELSEWHERE AND AS NO FACTUAL ERROR HAS BEEN POINTED OUT, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE REVENUE IS DISMISSED. 4 ITA NO.45/DEL/2017 9. THE COUNSEL DID NOT PRESSED THE CROSS OBJECTION AND THE SAME IS DISMISSED AS NOT PRESSED. 10. FINALLY, THE APPEAL OF THE REVENUE AS WELL AS T HE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 02/08/ 2019 SD/- SD /- [SUCHITRA KAMBLE] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DELHI; DATED: 02/08/2019. F{X~{T? F{X~{T? F{X~{T? F{X~{T? FA FA FA FA P.S P.SP.S P.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI