ACIT CIR 1, THANE V. MAHESH B. CHAPEKAR, THANE

ITA 5676/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3487 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA VIJAY
• Assessee Lawyers: RAVI K MULCHANDANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO.5676/MUM/2013 (ASSESSMENT YEAR: 2009-10) ACIT, CIRCLE-1, APPELLANT ASHAR I T PARK, 6 TH FLOOR, B WING, ROOM NO.22 ROAD NO.16Z, WAGLE INDUSTRIAL ESTATE, THANE (W) - 400604 VS. SHRI MAHESH B. CHAPEKAR RESPONDENT PROP. DEVIKA SERVICES, SHEHNAI HALL, LOUIS WADI, NR. RTO OFFICE, SERVICE ROAD, EEH, THANE (W) PAN: AAKPC 5324P /BY APPELLANT : SHRI CHANDRA VIJAY, /BY RESPONDENT: SHRI RAVI K. MULCHANDANI /DATE OF HEARING : 16.08.2016 /DATE OF PRONOUNCEMENT : 19.08.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-II, THANE, DAT ED 21.06.2013 FOR A.Y. 2009-10 ON FOLLOWING GROUND: ITA NO.5676/MUM/13 A.Y. 2009-10 [ACIT, THANE VS. SH RI MAHESH B. CHAPEKAR PAGE 2 THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.35,88,521/- WITHOUT APPRECIATING THE FACT THAT TH E ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING AND CONSEQUENTLY AMOUNT OF RS.35,88,521/- WHICH IS OF T HE NATURE OF TRADING RECEIPTS IS TAXABLE IN THE YEAR O F RECEIPT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS RECEIVED ADVANCE PAYMENT OF RS.35,88,521/- IN THE Y EAR UNDER CONSIDERATION SERVICES FOR WHICH ARE YET TO BE REND ERED. SO, ASSESSING OFFICER MADE ADDITION IN QUESTION. 2.1 IN APPEAL, THE CIT(A) OBSERVED THAT UNLESS SERV ICE ARE RENDERED BY ASSESSEE, THE ADVANCE PAYMENTS RECEIVED REMAIN AS LIABILITY AND CANNOT PARTAKE CHARACTER OF INCOME CHARGEABLE TO TAX EVEN IN THE CASH SYSTEM OF ACCOUNTING. MOREO VER, THESE ADVANCE RECEIPTS HAVE BEEN SHOWN BY THE ASSESSEE AS INCOME IN THE SUBSEQUENT ASSESSMENT YEAR AND BRINGING THE SAME TO TAX AGAIN IN THIS ASSESSMENT YEAR WOULD AMOUNT TO D OUBLE TAXATION WHICH IS NOT PERMITTED UNDER LAW. FURTHER CIT(A) NOTICED THAT IN THE YEAR UNDER CONSIDERATION NET PR OFIT WAS 33.32% OF THE GROSS RECEIPT AS COMPARED TO 31.61% I N THE IMMEDIATE PRECEDING ASSESSMENT YEAR AND HENCE THE N ET PROFITS DURING THE YEAR UNDER CONSIDERATION WAS BE TTER. 2.2 IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT T HE CIT(A) HAS RIGHTLY OBSERVED THE ADVANCE PAYMENT RECEIVED FOR T HE SERVICES TO BE RENDERED IN SUBSEQUENT YEAR CANNOT BE TREATED INCOME AND ACCORDINGLY, THE ADDITION MADE BY THE AO ON THI S ACCOUNT AT RS.35,86,521/- WAS RIGHTLY DELETED BY HIM, SAME IS UPHOLD. ITA NO.5676/MUM/13 A.Y. 2009-10 [ACIT, THANE VS. SH RI MAHESH B. CHAPEKAR PAGE 3 3. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 19 TH DAY OF AUGUST, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 19/08/2016 TRUE COPY PRABHAT KESARWANI / COPY OF ORDER FORWARDED TO:- / REVENUE !# / ASSESSEE $ %&%'( ) / CONCERNED CIT * )+ / CIT (A) ,-./00'(1 '( 12 %& / DR, ITAT, MUMBAI 3/4567 / GUARD FILE. BY ORDER / #8 1 9: ;% 1 '( 12 %&<