M/s. Poggen AMP Nagarsheth Powertronics Ltd., Ahmedabad V. The Addl.CIT.,Range-5, Ahmedabad

ITA 514/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0628 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N B SHAH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.514/AHD/2013 ( / ASSESSMENT YEAR : 2009-10) POGGEN-AMP NAGARSHETH POWERTRONICS PVT.LTD. C-1/B, 4402, GIDC ESTATE PHASE-IV, VATVA AHMEDABAD / VS. THE ADDL.CIT RANGE-5 AHMEDABAD $ ./ ./ PAN/GIR NO. : 2009-10 ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) $&) / APPELLANT BY : SHRI N.B.SHAH, AR '($&* ) / RESPONDENT BY : SHRI JAMES KURIAN, SR.DR +* / DATE OF HEARING 29/07/2016 ,-./* / DATE OF PRONOUNCEMENT 31/08/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XI, AHMEDABAD D ATED 07/12/2012 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- ITA NO.514/AHD/ 2013 POGGEN-AMP NAGARSEHTH POWERTRONICS PVT.LTD. VS. A DDL.CIT ASST.YEAR 2009-10 - 2 - 2.1. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF ELECTRICAL STAMPINGS , TRANSFORMERS, ETC. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME ON 29/10/2009 FOR AY 2009-10 DECLARING TOTAL INCOME OF RS.3,69,55,273/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S 'THE ACT') VIDE ORDER DATED 16/12/2011 AND THE TOTAL INCOME WAS DET ERMINED AT RS.4,12,45,963/-. AGGRIEVED BY THE ORDER OF THE AS SESSING OFFICER (AO), ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), W HO VIDE ORDER DATED 07/12/2012 (IN APPEAL NO.CIT(A)-XI/266/ADDL.CIT.R -5/11-12) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD.CIT(A) HAS GROSSLY ERRED IN LAW AND ON F ACTS IN PARTLY ALLOWING THE APPEAL. HE OUGHT TO HAVE ALLOWED THE APPEAL FULLY IN ACCORDANCE WITH THE GROUNDS OF APPEAL RAISED BY THE APPELLANT BEFORE HI M. 1. ADDITION ON ACCOUNT OF ALLEGED ACCRUED INCOME O N THE BASIS OF AIR INFORMATION RS.40,00,000/- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CON FIRMING THE ADDITION OF RS.40,00,000/- ON ACCOUNT OF ALLEGED AC CRUED INCOME ON THE BASIS OF AIR INFORMATION. 2. THE LD.A.O. AS WELL AS THE LD.CIT(A) ERRED IN LAW A ND ON FACTS IN FAILING TO CONSIDER APPELLANT COMPANYS SUBMISSIONS FILED BEFORE THEM. ITA NO.514/AHD/ 2013 POGGEN-AMP NAGARSEHTH POWERTRONICS PVT.LTD. VS. A DDL.CIT ASST.YEAR 2009-10 - 3 - 3. BEFORE US, AT THE OUTSET, LD.AR SUBMITTED THAT T HOUGH ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE SOLITARY ISSUE TO BE DECIDED IS WITH RESPECT TO ADDITION OF RS.40 LACS. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AN D ON THE BASIS OF AIR INFORMATION, AO NOTICED THAT AS PER THE INFORMA TION OF AIR, ASSESSEE HAD RECEIVED RS.1,24,99,016/- DURING THE FINANCIAL YEAR (FY) 2008-09 FROM ALSTOM PROJECTS PVT.LTD. BUT ASSESSEE HAD ACCO UNTED INCOME FROM ALSTOM PROJECTS PVT.LTD. OF ONLY RS.98,27,916/-. ASSESSEE WAS THEREFORE ASKED TO RECONCILE THE DIFFERENCE IN INCOME TO WHIC H THE ASSESSEE INTER- ALIA SUBMITTED THAT THOUGH AS PER THE TDS CERTIFICATE, ALSTOM PROJECTS PVT.LTD. HAD CREDITED THE AMOUNT IN FY 2008-09 BUT THE PAYMENT WAS RECEIVED BY THE ASSESSEE IN APRIL-2009, I.E. FY 200 9-10 RELEVANT TO AY 2010-11 AND IT WAS ACCOUNTED IN AY 2010-11. THE SU BMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE AO AS HE W AS OF THE VIEW THAT SINCE ASSESSEE HAD CLAIMED CREDIT FOR TDS ON THE A FORESAID SUM, IT SHOULD HAVE ACCOUNTED THE AMOUNT OF RS.40 LACS IN T HE YEAR UNDER CONSIDERATION AS THE AMOUNT HAD ACCRUED TO THE ASSE SSEE. HE ACCORDINGLY MADE ADDITION OF RS.40 LACS. AGGRIEVED BY THE ORDE R OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY HOLDING AS UNDER:- 3.3. I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT IONS. I HAV E ALSO PERUSED THE FACTS AVAILABLE ON RECORD. IT IS SEEN THAT THE APPELLANT HAS ITA NO.514/AHD/ 2013 POGGEN-AMP NAGARSEHTH POWERTRONICS PVT.LTD. VS. A DDL.CIT ASST.YEAR 2009-10 - 4 - RECEIVED PAYMENT OF RS.40,00,000/- FROM M/S.ALSTOM PROJECT INDIA LTD. THIS PAYMENT WAS RECEIVED VIDE CHEQUE NO.38514 DATE D 31.3.2009. THIS FACT IS CLEARLY NARRATED IN TDS CERTIFICATE IS SUED BY M/S.ASTOM PROJECT INDIA LTD. DATED 10.7.2009. M/S.ALSTOM PR OJECT INDIA LTD. HAD DULY DEDUCTED TAXES ON THIS PAYMENT. THE CREDIT OF TDS MADE ON THIS OF PAYMENT RS.40,00,000/- HAS BEEN CLAIMED BY THE APPE LLANT IN THE CURRENT ASSESSMENT YEAR I.E. A.Y. 2009-10. NOT ONL Y THIS, THE APPELLANT HAS ALSO CLAIMED EXPENDITURE TOWARDS DISCOUNT ALLOW ED ON THE SO-CALLED ADVANCE PAYMENT OF RS.40,00,000/- OF RS.1,20,000/- IN THE CURRENT ASSESSMENT YEAR I.E. A.Y. 2009-10. THE A.O. WAS OF THE OPINION THAT THE RECEIPT OF RS.40,00,000/- HAS ACCRUED TO THE APPELL ANT DURING THE YEAR UNDER CONSIDERATION. HOWEVER, THE APPELLANT HAS AC COUNTED FOR THIS RECEIPT IN THE NEXT ASSESSMENT YEAR I.E. A.Y. 2010- 11, AS THIS PAYMENT WAS STATEDLY REALIZED BY THE APPELLANT ON 8.4.2010. TAKING ENTIRETY OF FACTS IN VIEW, I AM OF THE CONSIDERED VIEW THAT THE RECEIPT OF RS.40,00,000/- HAS ACCRUED TO THE APPELLANT DURING THE CURRENT ASSESSMENT YEAR I.E. A.Y. 2009-10 FOR THE FOLLOWING REASONS:- (I) THE APPELLANT FIRM IS CONSISTENTLY FOLLOWING MERCAN TILE METHOD OF ACCOUNTING. THIS FACT IS DULY CERTIFIED BY THE STATUTORY AUDITORS IN FORM NO.3CD DATED 23.9.2009. THE APPELLANT HAS REITERATED THE METHOD OF ACCOUNTING A S MERCANTILE SYSTEM OF ACCOUNTING IN THE INCOME-TAX R ETURN FOR THE A.Y. 2009-10, WHICH WAS FILED ON 24.3.2010. AS PER THE MERCANTILE SYSTEM OF ACCOUNTING THE MATERIA L DATE IS THE DATE ON WHICH CHEQUE IS ISSUED. THE RECEIPT OF PROCEED OR THE REALIZATION OF CHEQUE AMOUNT IN THE BANK ACCOUNT CANNOT BE THE DATE OF ACCRUAL AS PER MERCAN TILE SYSTEM OF ACCOUNTING. THE FACTS AVAILABLE ON RECOR D CONCLUSIVELY PROVES THAT THE PAYMENT OF RS.40,00,00 0/- WAS MADE VIDE CHEQUE NO.38514 DATED 31.3.2009. ACCORDINGLY, I AM OF THE CONSIDERED VIEW THAT THE R ECEIPT OF RS.40,00,000/- HAS ACCRUED DURING THE YEAR UNDER CONSIDERATION AND AS PER MERCANTILE SYSTEM OF ACCOU NTING THE SAME SHOULD BE ACCOUNTED FOR IN THE CURRENT YEA R ITSELF. ITA NO.514/AHD/ 2013 POGGEN-AMP NAGARSEHTH POWERTRONICS PVT.LTD. VS. A DDL.CIT ASST.YEAR 2009-10 - 5 - (II) IT IS A MATTER OF FACT THAT M/S.ASTOM PROJECT INDIA LTD. HAS DEDUCTED TAX AT SOURCE OF RS.90,640/- ON THIS PAYME NT OF RS.40,00,000/-. THE APPELLANT HAS CLAIMED CREDIT O F THIS TDS IN THE CURRENT ASSESSMENT YEAR I.E. A.Y. 2009-1 0. THE CREDIT OF TDS OF RS.90,640/- HAD ALREADY BEEN ALLOW ED TO THE APPELLANT DURING THE CURRENT ASSESSMENT YEAR. AS PER THE PROVISIONS OF RULE 37BA(3)(I), THE CREDIT OF TD S IS TO BE ALLOWED IN THE ASSESSMENT YEAR IN WHICH THE INCO ME IS ASSESSABLE. SINCE THE CREDIT OF TAX DEDUCTED AT SO URCE OF RS.90,640/- ON THE PAYMENT OF RS.40,00,000/- HAS BE EN CLAIMED AND ALLOWED IN THE A.Y. 2009-10, ACCORDINGL Y, AS PER THE PROVISIONS OF RULE 37BA(3)(I), THE INCOME S HOULD ALSO BE ASSESSED IN THE SAME YEAR. AS PER THE PROV ISIONS OF RULE 37BA(3)(I) THE RECEIPT OF RS.40,00,000/- IS ASSESSABLE IN THE CURRENT A.Y. 2009-10. (III) THE APPELLANT HAS ALLOWED DISCOUNT OF RS.1,20,000/- ON THIS RECEIPT OF RS.40,00,000/-. THIS DISCOUNT HAS BEEN ALLOWED TO M/S.ASTOM PROJECT INDIA LTD., AS THE PA YMENT HAS BEEN MADE PROMPTLY. THE APPELLANT HAS CLAIMED DISCOUNT EXPENDITURE OF RS.1,20,000/- IN THE CURREN T ASSESSMENT YEAR I.E. 2009-10. SINCE THE ACCRUAL OF RECEIPT OF RS.40,00,000/- AND DISCOUNT ALLOWANCE ARE INTRIC ATELY RELATED, ACCORDINGLY IT WILL BE LOGICAL IF BOTH THE SE ENTRIES ARE ACCOUNTED FOR IN THE SAME YEAR. STRANGELY THE APPELLANT HAS ACCOUNTED FOR THE DISCOUNT EXPENDITUR E IN THE CURRENT ASSESSMENT YEAR WHILE THE RECEIPT OF RS.40,00,000/- IS ACCOUNTED FOR IN THE NEXT ASSESSM ENT YEAR. IN MY CONSIDERED VIEW IF DISCOUNT EXPENDITUR E HAD ACCRUED IN THE CURRENT ASSESSMENT YEAR, THE RECEIPT OF RS.40,00,000/- SHOULD ALSO ACCRUED IN THE CURRENT ASSESSMENT YEAR ITSELF AND THE SAME SHOULD BE ACCOU NTED FOR IN THE CURRENT YEAR ONLY. 3.4. DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS CONTENDED THAT IT IS NOT A CASE OF EVASION AS THE RECEIPT OF RS.40,00,000/- HAS BEEN ACCOUNTED FOR IN THE NEXT ASSESSMENT YEAR. I AM NO T INCLINED TO AGREE ITA NO.514/AHD/ 2013 POGGEN-AMP NAGARSEHTH POWERTRONICS PVT.LTD. VS. A DDL.CIT ASST.YEAR 2009-10 - 6 - WITH THE ARGUMENTS OF THE APPELLANT AS THE RECEIPT OF RS.40,00,000/- HAS ACCRUED TO THE APPELLANT IN THE CURRENT YEAR AND AS PER CONSISTENT METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT THE RECEIPT OF RS.40,00,000/- NEEDS TO BE ACCOUNTED FOR IN THE CUR RENT ASSESSMENT YEAR. IN VIEW OF ABOVE, ADDITION OF RS.40,00,000/- IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 4. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, LD.AR REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT THE AMOUNT WAS RECEIVED BY THE ASSESSEE AS ADVANCE IN THE MONTH OF APRIL-2009 AND SINCE THE AMOUNT WAS RECEIVED IN THE MONTH OF APRIL-2009 IT HAS ACCO UNTED AS INCOME IN SUBSEQUENT YEAR, I.E. FY 2009-10 RELEVANT TO AY 201 0-11. HE ALSO SUBMITTED THAT THE CHEQUE WAS DEPOSITED ON 9 TH APRIL-2009 AND THE CHEQUE GOT CLEARED IN FY 2009-10. IN SUPPORT OF HIS CONTENTION OF THE AMOUNT BEING RECEIVED IN SUBSEQUENT YEARS, HE PLAC ED ON RECORD THE COPY OF THE VOUCHER AND THE BANK STATEMENT OF STANDARD C HARTERED BANK WHEREIN THE CHEQUE WAS DEPOSITED. HE THEREFORE SUB MITTED THAT ADDITION BE DELETED AND MORE SO THAT THE ADDITION WOULD AMO UNT TO DOUBLE ADDITION BECAUSE THE INCOME HAS ALREADY BEEN OFFERE D IN SUBSEQUENT YEAR I.E. AY 2010-11. IN THE ALTERNATE, HE SUBMITTED TH AT THE ASSESSEE BE ALLOWED THE CREDIT OF TDS IN SUBSEQUENT YEARS. LD. SR.DR ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. ITA NO.514/AHD/ 2013 POGGEN-AMP NAGARSEHTH POWERTRONICS PVT.LTD. VS. A DDL.CIT ASST.YEAR 2009-10 - 7 - 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO TH E ADDITION TO INCOME MADE ON THE BASIS OF AIR INFORMATION RECEIVED BY TH E AO. BEFORE US, IT IS ASSESSEES SUBMISSION THAT THE AMOUNT WAS RECEIV ED BY THE ASSESSEE IN AY 2010-11 AND HAS ALSO BEEN OFFERED TO TAX IN AY 2 010-11 AS THE CHEQUE WAS RECEIVED IN SUBSEQUENT YEARS AND THE AMO UNT WAS RECEIVED AS ADVANCE PAYMENT AND THEREFORE THE INCOME DID NOT A CCRUE TO THE ASSESSEE IN AY 2009-10. IT IS ALSO ASSESSEES CONTENTION TH AT IF ADDITION IS MADE IN THE YEAR UNDER CONSIDERATION IT WOULD AMOUNT TO DOUBLE TAXATION OF THE SAME INCOME. WE FIND FORCE IN THE CONTENTION OF TH E ASSESSEE BUT HOWEVER APART FROM THE ORAL CONTENTIONS, ASSESSEE H AS NOT PLACED ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THE AMOUNT H AS BEEN OFFERED TO TAX IN SUBSEQUENT YEARS. IN VIEW OF THESE FACTS, WE A RE OF THE VIEW THAT THE MATTER NEEDS TO BE RE-EXAMINED AT THE END OF AO. W E THEREFORE SET ASIDE THE ISSUE TO THE FILE OF AO TO VERIFY AND SEE THAT THE SAME AMOUNT IS NOT TAXED TWICE, I.E. IN AY 2009-10 AND IN AY 2010-11. IN CASE, THE AMOUNT IS FOUND TO BE TAXABLE IN AY 2010-11, THEN SUITABLE CREDIT OF TDS BE GIVEN TO THE ASSESSEE IN ACCORDANCE WITH LAW BUT IN CASE THE AMOUNT IS FOUND TO BE TAXABLE IN AY 2010-11, THEN AO IS DIREC TED TO GIVE THE CREDIT OF THE TDS IN AY 2010-11. THE ASSESSEE IS ALSO DIR ECTED TO FURNISH ALL THE REQUIRED DETAILS PROMPTLY TO THE AO. THUS, THI S GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.514/AHD/ 2013 POGGEN-AMP NAGARSEHTH POWERTRONICS PVT.LTD. VS. A DDL.CIT ASST.YEAR 2009-10 - 8 - 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 31 /0 8 /2016 SD/- SD/- () () (RAJPAL YADAV) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 31/ 08 /2016 3..,.../ T.C. NAIR, SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 456 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-XI, AHMEDABAD 5. 89:'56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<=+ / GUARD FILE. / BY ORDER, (8' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 2.8.16 (DICTATION-PAD 6- P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30.8.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.31.8.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.8.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER