The ACIT, 3(1), Bhopal V. M/s Kamla Construction Company, Raisen

ITA 462/IND/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1532 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: ANIL KHAA
• Keywords: Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAEFK0608C I.T.A.NO. 462 /IND/201 2 . A.Y. : 2007 - 08 ACIT, 3(1), M/S. KAMLA CONSTRUCTION CO., BHOPAL VS MAIN ROAD, OBEDULLAGANJ, DISTT. RAISEN APPELLANT RESPONDENT C.O.NO.96/IND/2012 (ARISING OUT OF I.T.A.NO. 462/IND/2012.) A.Y. : 2007 - 08 M/S. KAMLA CONSTRUCTION CO., ACIT, 3(1), MAIN ROAD, OBEDULLAGANJ, DISTT. RAISEN VS BHOPAL CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI R.A. VERMA, SR. DR ASSESSEE BY : SHRI ANIL KHABYA, CA -: 2: - 2 DATE OF HEARING : 03.01.2013 DATE OF PRONOUNCEMENT : 04 . 01 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF CIT( A) DATED 17.5.2012 FOR ASSESSMENT YEAR 2007-08. 2. IN THE APPEAL FILED BY THE REVENUE, ACTION OF THE C IT(A) FOR DELETING THE ADDITION OF RS. 75,10,840/- ON ACC OUNT OF CONTRACT RECEIPT WAS ALLEGED. IN THE CROSS OBJECTIO N, THE ASSESSEE IS AGGRIEVED FOR SUSTAINING ADDITION ON AC COUNT OF INTEREST RECEIPT . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF CIVIL CONTRACT. THE ASSESSING OFFICER F OUND THAT AS PER TDS CERTIFICATE, TOTAL CONTRACT RECEIPT WORKS O UT TO BE RS. 8,61,25,061/-, WHEREAS THE ASSESSEE HAD SHOWN CONTR ACT RECEIPT OF RS. 7,86,14,221/-. THUS, THE DIFFERENCE OF RS. 75,10,840/- WAS ADDED BY THE ASSESSING OFFICER IN A SSESSEES -: 3: - 3 INCOME. SIMILARLY, THE ASSESSING OFFICER FOUND THAT AS PER TDS CERTIFICATE BANK HAS CREDITED INTEREST OF RS. 8,25, 805/-, WHEREAS THE ASSESSEE HAD SHOWN INTEREST INCOME OF R S. 4,91,838/-. DIFFERENCE OF RS. 3,30,805/- WAS ADDED BY THE ASSESSING OFFICER AND THE SAME WAS CONFIRMED BY THE LD.CIT(A). AGAINST THIS ORDER, BOTH THE ASSESSEE AND REVENUE A RE IN APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THE CIT(A) HAS DELETED THE ADDITIO N OF RS. 75,10,840/- BY RECORDING A DETAILED FINDING TO THE EFFECT THAT THE ASSESSEE HAD SHOWN SUB CONTRACT RECEIPT IN ITS PROFIT AND LOSS ACCOUNT, WHICH HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER. THE FINDING OF CIT(A) ARE AS UNDER :- 2.3 I HAVE EXAMINED THE ISSUE . IN ORDER TO VERIFY THE FACTS OF THE ISSUE, THE ASSESSMENT RECORDS WERE ALS O EXAMINED. IN THE ASSESSMENT RECORDS, STATEMENT OF GROSS RECEIPTS OF 13 WORK CONTRACTS EXECUTED DURING THE YEAR IS AVAILABLE. THE STATEMENT OF RECEIPT OF WORK CONTRACT SHOWS TOTAL RECEIPT OF RS. -: 4: - 4 8,71,12,523/-. THIS INCLUDES WORK CONTRACT AMOUNT OF RS. 18,03,438/- RECEIVED FROM M/S. SHIVAJI INFRASTRUCTURE ON WHICH TDS IS NOT DEDUCTED BY THE PAYER. 2.4 THE WORK CONTRACT INCLUDES THE WORK EXECUTED FOR EXECUTIVE ENGINEER PWD, VIDISHA FOR CONTRACT AMOUNT OF RS. 66,94,863/-. THIS CONTRACT WAS GIVEN AS SUB CONTRACT TO S. N. AGRAWAL. THE SUB CONTRACT LEDGER OF S. N. AGRAWAL SHOWS TOTAL CREDIT OF RS. 66,94,863/- AND DEBIT OF RS. 62,76,837/-. THE NET BALANCE OF THIS LEDGER AT RS. 4,18,026/- IS CREDITE D TO PROFIT AND LOSS ACCOUNT. THIS SHOWS THAT THE RECEIPT OF RS. 66,94,863/- ON ACCOUNT OF WORK CONTRACT OF EE, PWD, VIDISHA EXECUTED AS SUB- CONTRACT BY S. N. AGRAWAL IS DULY ACCOUNTED IN THE BOOKS OF ACCOUNT. 2.5 THE ASSESSING OFFICER HAS WORKED OUT SUPPRESSION OF RECEIPT BY RS. 75,10,840/- OUT OF WHICH RS. 66,94,863/- IS ACCOUNTED IN SUB CONTRACTORS LEDGER AS DISCUSSED ABOVE. THE BALANCE -: 5: - 5 AMOUNT IS RS. 8,25,850/- WHICH IS INTEREST RECEIPT. THE TDS WAS DEDUCTED ON INTEREST RECEIPT WHICH THE ASSESSING OFFICER WRONGLY TREATED AS WORK CONTRACT RECEIPT. IN VIEW OF THE ABOVE IT IS CLEAR THAT THER E IS NO SUPPRESSION OF RECEIPT. THE TOTAL WORK CONTRACT RECEIPT HAVE BEEN DULY ACCOUNTED HENCE THE IMPUGNED ADDITION IS NOT JUSTIFIED. IN VIEW OF THE ABOVE THE ADDITION OF RS. 75,10,840/- ON ACCOUNT OF WORK CONTRACT RECEIPT IS DELETED. 5. FROM THE RECORD, WE FIND THAT EVEN BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS FILED DETAILED SUBMISSION WITH REGARD TO THE ACTUAL WORK EXECUTED AS A SUB CO NTRACTOR ACCOUNTING TO RS. 66,94,863/- WHICH HAS BEEN SUB CO NTRACTED TO M/S. S.N. AGRAWAL. WE FOUND THAT IN THE PROFIT A ND LOSS ACCOUNT, THE ASSESSEE HAD SHOWN ENTIRE CONTRACT REC EIPT OF ITS OWN AND NET PROFIT FROM SUB CONTRACT WORK, WHICH HA S BEEN SHOWN AT RS. 4,18,026/-. THE ASSESSEE HAD ALSO PAID CERTAIN AMOUNT TO SUB CONTRACTOR OUT OF PROCEEDS OF WORK, O N WHICH ALSO ASSESSEE DEDUCTED TDS. THUS, AS PER THE FINDIN G RECORDED BY THE LD.CIT(A), THE RECONCILIATION STATEMENT SUBM ITTED BY THE -: 6: - 6 ASSESSEE BEFORE THE ASSESSING OFFICER CLEARLY SHOWS THAT THE ENTIRE CONTRACT RECEIPT HAS BEEN ACCOUNTED FOR. ACC ORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE LD.CIT(A) WITH REGARD TO THE SUB CONTRACT RECEI PT, WHICH HAS BEEN DULY DISCLOSED IN THE PROFIT AND LOSS ACCO UNT. 6. IN RESPECT OF INTEREST INCOME, THE ASSESSING OFFICE R FOUND THAT AS PER TDS CERTIFICATE, THE ASSESSEE WAS IN RECEIPT OF INTEREST OF RS. 8,25,805/-, WHEREAS HE HAS ACCOU NTED FOR ONLY RS. 4,95,138/-. THE LD. CIT(A) OBSERVED AS UN DER WHILE CONFIRMING ADDITION :- 3.3 THE FACTS OF THE ISSUE IN BRIEF ARE THAT AS PE R THE TDS CERTIFICATE THE TOTAL INTEREST INCOME DURING TH E YEAR IS RS. 8,25,805/- BUT THE APPELLANT HAD SHOWN INTEREST INCOME AT RS. 4,95,138/-. REGARDING THE BALANCE AMOUNT OF INTEREST IT IS PLEADED THAT THE APPELLANT HAD BEEN FOLLOWING THE METHOD OF SHOWING INTEREST INCOME AT THE TIME OF MATURITY OF FDR. IT IS PLEADED THAT ALTHOUGH TDS IS DEDUCTED ON THE FDR INTEREST ON ACCRUAL BASIS BUT IT WILL BE OFFERED TO TAX IN THE YEAR OF RECEIPT. THIS ARGUMENT IS NOT PLAUSI BLE. -: 7: - 7 INTEREST ON FDR HAS ACCRUED AND HAS BEEN CREDITED TO THE FDR ACCOUNT OF THE APPELLANT DURING THE YEAR . THE BANK HAS DEDUCTED INTEREST AT THE TIME OF CREDITING INTEREST INCOME IN FDR ACCOUNT. SINCE THE INCOME HAS ACCRUED AND CREDITED TO THE APPELLANTS FDR ACCOUNT DURING THE YEAR IN APPEAL IT IS TAXABLE IN THE SAME YEAR. IN VIEW OF THE ABOVE ADDITION OF RS. 3,30,805/- ON ACCOUNT OF INTEREST INCOME IS CONFIRMED. 7. IT IS CLEAR FROM THE ORDER OF CIT(A) THAT THE ASSE SSEE HAS ACCOUNTED FOR INTEREST INCOME IN RESPECT OF THE FDR WHICH HAVE ACTUALLY BEEN MATURED DURING THE YEAR AND IN R ESPECT OF OTHER FDRS, WHICH DID NOT MATURE DURING THE YEAR BU T MATURED IN THE SUBSEQUENT YEAR, THE INTEREST INCOME WAS ACCOUNTED FOR IN THE SUBSEQUENT YEAR. NO FAULT CAN BE FOUND IN THIS METHOD OF ACCOUNTING BEING FOLLOWED BY THE ASS ESSEE. IN THE INTEREST OF JUSTICE, WE RESTORE THIS GROUND BAC K TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ASSESSEE TO FILE DETAILS OF INTEREST INCOME ACCOUNTED FOR IN SUBSEQUENT YEAR S ON MATURITY OF FDRS. IF THE ASSESSING OFFICER FINDS TH AT SUCH -: 8: - 8 INTEREST INCOME HAS BEEN ACCOUNTED FOR IN THE YEAR OF MATURITY, NO ADDITION IS WARRANTED. WE DIRECT ACCOR DINGLY. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED, WHEREAS CROSS OBJECTION IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 4 TH JANUARY, 2013. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 4 TH JANUARY, 2013. CPU* 3.3.1