DCIT, New Delhi V. M/s Ahlcon India Pvt. Ltd., New Delhi

ITA 5141/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65942 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIRTHI LAL
• Assessee Lawyers: A L SEHGAL

Judgement Text

ITA NO. 5141/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 5141/DEL/2012 A.Y. : 2009-10 DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), ROOM NO. 390, C.R. BUILDING, I.P. ESTATE, NEW DELHI 110 002 VS. M/S AHLCON INDIA PVT. LTD., A-177, OKHLA INDUSTRIAL AREA, PHASE-I, NEW DELHI 110 020 (PAN/GIR NO. : AAACA8064H) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. A.L. SEHGAL, CA DEPARTMENT BY : SH. PIRTHI LAL, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-IV, NEW DEL HI DATED 18.7.2012 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE ISSUE RAISED IN THE APPEAL READ AS UNDER :- I) THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF ` 4,12,38,88 0/- ON ACCOUNT OF MOBILIZATION ADVANCE RECEIVED BY THE ASSE SSEE FROM CUSTOMERS TO PURCHASE RAW MATERIAL. II) THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED ON FACTS AND IN LAW IN IGNORING THE FACTS THAT THE RECEIPTS OF MOBILIZATION ADVANCE ARE NOT TAKEN AS INCOME BUT SHOW N ITA NO. 5141/DEL/2012 2 UNDER THE HEAD CURRENT LIABILITIES IN BALANCE SHE ET RESULTING IN DEFERMENT OF TAX LIABILITIES. III) THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) O F APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS AP PEAL. 3. IN THIS CASE THE ASSESSEE HAD SHOWN AN AMOUNT O F ` 4,12,38,880/- AS MOBILIZATION ADVANCE UNDER THE HEAD CURRENT LIABILITIES IN THE BALANCE SHEET FOR THE YEAR UND ER CONSIDERATION. ON BEING ASKED BY THE ASSESSING OFFICER, IT WAS EXPLAI NED BY THE ASSESSEE THAT IT WAS CARRYING ON THE BUSINESS OF MANUFACTURI NG OF ALUMINUM PANELS AND RELATED PRODUCTS AS PER THE ARCHITECTURA L DESIGNS AND SPECIFICATIONS SUPPLIED BY THE CUSTOMERS. THE ASSE SSEE RECEIVED 10% TO 30% MOBILIZATION ADVANCE FROM THE CUSTOMERS TO E NABLE IT TO PURCHASE RAW MATERIAL AS PER THE DESIGN AND SPECIFI CATION MENTIONED IN THE WORK CONTRACT. WORK IS DONE AT THE SITE O F THE CUSTOMER. THE MOBILIZATION ADVANCE IS RECEIVED AGAINST FURNISHING OF INDEMNITY BOND FOR CORPORATE BANK GUARANTEES. THE SAID ADVANCE I S ADJUSTED ON PRO- RATA BASIS FROM TIME TO TIME ON SUBMISSION OF SALE BI LLS TO THE EXTENT OF WORK EXECUTED. THE BALANCE MOBILIZATION ADVANCE IS SHOWN AS LIABILITY AS PER BALANCE SHEET. HOWEVER, THE ASSE SSING OFFICER HAS REJECTED THE ABOVE CLAIM AND HAS ADDED THE ABOVE MOBI LIZATION ADVANCE TO ASSESSEES INCOME FOR THE YEAR UNDER CONS IDERATION. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) REFERRED TO THE LD. COMMISSIONER OF INCOME TAX (A)S ORDER FOR ASSESSMENT YEAR 2008-09 AND ACCORDINGLY, FOLLOWING THE EARLIER ORDER LD. COMMISSIONER OF INCOME TAX (A) HAS DELETED THE A DDITION. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. ITA NO. 5141/DEL/2012 3 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE ISSUE INVOLVED IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN I.T.A. NO. 1924/ DEL/2011 FOR A.Y. 2008-09 VIDE ORDER DATED 19.10.2012. IN THE SA ID TRIBUNALS DECISION THE IDENTICAL ISSUE WAS DEALT WITH AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FI ND THAT IN THIS CASE ASSESSEE IS RECEIVING MOBILIZATION ADVA NCE FROM CUSTOMERS. THIS IS TO ENABLE THE ASSESSEE TO PURCH ASE THE RAW MATERIAL FOR THE PROPOSED WORK. AS PER THE ASSE SSEES METHOD OF ACCOUNTING, THE MATERIAL, FINISHED OR SEMI FINISHED STOCKS IS TRANSFERRED TO CUSTOMERS WORK SI TE FOR INSTALLATION THROUGH INVOICES. THE CUSTOMER IS BI LLED AND THE AMOUNT IS CREDITED TO SALES ACCOUNT AT PRO-RAT A TO THE EXTENT WORK IS DONE AND BILLED FROM TIME TO TIME. T HE MOBILIZATION ADVANCE IS ACCORDINGLY ADJUSTED PROPORTIONATELY. 6.1 THIS SYSTEM OF ACCOUNTING DOES NOT SUFFER FROM ANY SHORT COMING. MOREOVER, IT HAS BEEN ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS. UNDER THE CIRCUMSTAN CES, WHEN ASSESSEE IS FOLLOWING AN ACCEPTABLE METHOD ACCOUNTING AND THAT ALSO FOR A NUMBER OF YEARS, THE RE IS NO REASON TO CHANGE THE SAME. THERE IS NO CHANGE IN FAC TS OR LAW AS COMPARED TO EARLIER YEARS. HENCE, NO CHANGE IS WARRANTED AS THE MOBILIZATION ADVANCES IS ULTIMATELY OFFERED FOR TAXATION AS INCOME AS PER A CONSISTENT METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE. ITA NO. 5141/DEL/2012 4 6.2 IN THIS REGARD, WE ALSO PLACE RELIANCE UPON THE HONBLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF C IT VS. DALMIA PROMOTERS DEVELOPERS (P) LTD. 281 ITR 346, WHER EIN IT WAS HELD THAT FOR REJECTING THE VIEW TAKEN IN EARLIER ASSESSMENT YEARS, THERE MUST BE MATERIAL CHANGE IN T HE FACT, SITUATION OR IN LAW. 6.3 IN THE BACKGROUND OF AFORESAID DISCUSSIONS AND PRECEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A). ACCORDINGLY, W E UPHOLD THE SAME. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. 7. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND PRECEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CO MMISSIONER OF INCOME TAX (A), HENCE, WE UPHOLD THE SAME. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/12/2012. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [ [[ [U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 07/12/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES