M/s. EMM AAR EL Constructions Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 4616/DEL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69539 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 19-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY , JUDICIAL MEMBER ITA NO. 4616 /DEL/2011 ASSESSMENT YEAR: 2007 - 08 EMM AAR EL CONSTRUCTION PVT. LTD. C/O. M/S. BHATDURANI ASSOCIATES, C.A. 906, PADMA TOWER - I, 5, RAJINDRA PLACE, NEW DELHI 110008 PAN AAACE2853Q VS. DCIT CIRCLE - 11(1) IIIRD FLOOR, C. R. BUILDING, I. P. ESTATE, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI UPENDE R BHAT, CA RESPONDENT BY: MS NIDHI SRIVASTAVA, SR. DR O R D E R PER A. T. VARKEY , JM THE APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A), XIII, NEW DELHI DATED 05.09.2011 FOR THE ASSESSMENT YEAR 2007 - 08. THE GROU NDS OF APPEAL ARE AS FOLLOWS: - 1. REG: ADDITION OF RS. 11,33,882/ - & RS. 1976/ - BY THE LD AO ON ACCOUNT OF TREATING THE DIFFERENCE BETWEEN THE GROSS CREDIT AS SHOWN IN THE TDS CERTIFICATE BY ONE OF THE CLIENTS OF THE ASSESSEE AND BETWEEN THE SALES, THAT I S CONTRACTUAL RECEIPTS AS DECLARED BY THE ASSESSEE AS INCOME OF THE ASSESSEE. 2. THAT HAVING REGARD TO FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN LAW & ON FACTS IN NOT COMPLETELY DELETING THE PAGE NO. 2 ITA NO. 4616 /DEL/2011 ADDITION OF RS. 11,35,849/ - MADE BY THE LD A O ON ACCOUNT OF TREATING THE DIFFERENCE BETWEEN THE GROSS CREDIT AS SHOWN IN THE TDS CERTIFICATE BY ONE OF THE CLIENTS OF THE ASSESSEE AND BETWEEN THE SALES, THAT IS CONTRACTUAL RECEIPTS AS DECLARED BY THE ASSESSEE AS INCOME OF THE ASSESSEE, FACT THAT THIS AMOUNT WAS NOT RECOGNIZED AS SALES IN THAT YEAR BUT INCLUDED IN THE FIGURE OF THE CLOSING. 3. IN ANY VIEW OF THE MATTER & IN ANY CASE THE ACTION OF LD CIT(A)IN NOT COMPLETELY REVERSING THE ACTION OF LD AO IN MAKING ADDITION OF RS. 11,335,849/ - AS BAD IN LAW, UNJUSTIFIED ARBITRARY & AGAINST THE FACTS & CIRCUMSTANCES OF THE CASE. 2. APROPOS ADDITION OF RS. 11,33,882/ - & RS. 1967/ - MADE BY AO ON ACCOUNT OF TREATING THE DIFFERENCE BETWEEN THE GROSS CREDIT AS SHOWN IN THE TDS CERTIFICATE AND THE CONTRACTUAL RECEIPTS AS DECLARED BY THE ASSESSEE AS INCOME OF THE ASSESSEE IN THE ASSESSMENT YEAR 2007 - 08. 3. BRIEF FACT S OF THE CASE IS THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF FABRICATION AND ERECTION OF STEEL STRUCTURE. FOR THE ASSESSMENT YEAR 20 07 - 08 , IT DECLARED AN INCOME OF RS. 20,39,730/ - IN THE RETURN OF INCOME FILED ON 30.10.2007. DURING THE COURSE OF ASSESSMENT PROCEEDING U/S 143(2) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) , THE AO MADE AN ADDITION OF RS. 11,33,882/ - BEING RECEIP T NOT DISCLOSED AS PER TDS CERTIFICATE. AS PER THE ASSESSING OFFICER, WHEN MATCHING , THE GROSS RECEIPTS AS PER THE TDS CERTIFICATE , VIS - - VIS , THAT OF THE GROSS RECEIPT DISCLOSED IN THE PROFIT AND LOSS ACCOUNT , HE FOUND THAT THE ASSESSEE HAD NOT DISCLOSED THE RECEIPTS OF RS. 11,33,882/ - WHICH WERE DULY ADDED TO THE GROSS RECEIPTS BY THE AO. ACCORDING TO THE ASSESSEE , THE DIFFERENCE IN THE INCOME AS POINTED OUT BY THE ASSESSING OFFICER, HAS BEEN OFFERED FOR TAX IN THE SUCCEEDING ASSESSMENT YEAR 2008 - 09 AND N ECESSARY EVIDENCE WAS ALSO BROUGHT BEFORE THE AUTHORITIES. THE ASSESSEE PLEADS THAT IT CANNOT BE TAXED TWICE FOR THE SAME INCOME AND AT THE MOST IT CAN BE THE CASE OF POSTPONEMENT OF PART OF THE INCOME TO SUCCEEDING YEAR AT THE SAME RATE OF TAX. ACCORDING TO THE ASSESSEE IF THE AOS ADDITION IS CONFIRMED THEN IT PAGE NO. 3 ITA NO. 4616 /DEL/2011 WILL AMOUNT TO DOUBLE TAXATION SINCE THE DIFFERENTIAL AMOUNT HAS BEEN BROUGHT FOR TAX IN THE SUCCEEDING YEAR. THEREFORE, IT WAS PLEADED THAT ADDITION CONFIRMED BY THE LD CIT(A) NEED TO BE DELETED. A CCORDING TO THE LD DR , THE LAW REQUIRES THAT THE INCOME OF THE ASSESSMENT YEAR HAS TO BE TAXED IN PREVIOUS YEAR IN WHICH IT HAS ACCRUED, ARRIVED OR RECEIVED AND THE TDS CREDIT ALSO SHOULD BE OF THE SAME YEAR SHOULD BE TAKEN. 4 . WE HAVE HEARD BOTH THE PART IES AND PERUSED THE RECORDS AND PRECEDENTS CITED BY THEM. WE FIND MERIT IN THE CONTENTION OF THE LD AR THAT , FOR THE SAME INCOME , ASSESSEE CANNOT BE TAXED TWICE . BUT AT THE SAME TIME WE FIND MERIT IN THE CONTENTION OF THE LD DR THAT , FOR INCOME WHICH IS RE CEIVED , ACCRUED , OR ARISED IN THE PREVIOUS YEAR TO THE ASSESSMENT YEAR HAS TO BE ASSESSED IN THE ASSESSMENT YEAR ITSELF. A PERUSAL OF THE RECORDS SHOWS THAT THE ASSESSEE PLACED THE COPY OF ITR OF ASSESSMENT YEAR 2008 - 09 , AS ANNEXURE II , BEFOR E THE LD CIT(A ), WHO DID NOT DISCUSS THE DOUBLE TAXATION OF THE SAME INCOME AND WHILE EXPLAINING THE BASIC TENETS OF INCOME TAX LAW CASUALLY STATED THAT TAX AUTHORITIES CANNOT BRING TO TAX ANY INCOME WHICH DOES NOT RELATE TO THE PREVIOUS YEAR. SUGGESTING THAT THE IMPUGN ED ADDITION COULD NOT HAVE BEEN CARRIED FORWARD AS INCOME FOR THE NEXT ASSESSMENT YEAR AND DID NOT COMMENT UPON THE ITR FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2008 - 09. THEREFORE, IT HAS TO BE SEEN FIRST WHETHER THE CLAIM OF THE ASSESSEE THAT HE HAS BROU GHT THE ADDITION MADE BY THE ASSESSEE (RS. 11,33,882/ - AND RS. 1967/ - ) FOR ASSESSMENT IN THE ASSESSMENT YEAR 2008 - 09. IF THE ASSESSEE HAS BROUGHT THE ADDITION IN THIS ASSESSMENT YEAR (RS. 11,33,882/ - AND RS. 1967/ - ) FOR ASSESSMENT IN THE SUCCEEDING ASSESSM ENT YEAR 2008 - 09, THEN THE CLAIM OF THE ASSESSEE THAT HE HAS BEEN TAXED TWICE FOR THE SAME INCOME WILL BE CORRECT. IN THAT SCENARIO, WE GIVE LIBERTY TO THE LD ASSESSING OFFICER TO TAKE APPROPRIATE DECISION TO CHOOSE EITHER THE ASSESSMENT YEAR 2007 - 08 OR PAGE NO. 4 ITA NO. 4616 /DEL/2011 2 008 - 09 TO ASSESS THE SAID AMOUNT, IN CASE THE LD ASSESSING OFFICER DECIDES TO ASSESS THE SAID ADDITION IN THE ASSESSMENT YEAR 2007 - 08, THE ASSESSING OFFICER SHALL DELETE THE SAME AMOUNT FROM THE ASSESSMENT YEAR 2008 - 09. APART FROM THE ABOVE, IT IS THE CO NTENTION OF THE LD COUNSEL OF THE ASSESSEE THAT THE IMPUGNED AMOUNT WAS INCLUDED IN THE CLOSING STOCK INSTEAD OF SALES. HENCE, THERE IS NO ADVERSE EFFECT ON THE PROFITS OF THE YEAR. THIS ASPECT HAS NOT BEEN DEALT WITH BY THE AUTHORITIES BELOW , THIS MAY ALS O BE EXAMINED BY THE LD AO. 4. WITH THE AFORESAID DIRECTION THE APPEAL PREFERRED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 . 11 .2013. S D/ - S D/ - ( SHAMI M YAHYA ) ( A. T. VARKEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 28 / 11 /2013 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR IT AT, NEW DELHI