OSGL Buildwell Pvt. Ltd., Delhi V. ACIT, New Delhi

ITA 5791/DEL/2012

• Counselvise Citation: 579120114 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 15-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJHA
• Assessee Lawyers: S C GARG
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 5791/DEL/2012 5791/DEL/2012 5791/DEL/2012 5791/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008 - -- - 09 0909 09 M/S OSGL BUILDWELL PVT.LTD., M/S OSGL BUILDWELL PVT.LTD., M/S OSGL BUILDWELL PVT.LTD., M/S OSGL BUILDWELL PVT.LTD., LU LULU LU- -- -108, SECOND FLOOR, 108, SECOND FLOOR, 108, SECOND FLOOR, 108, SECOND FLOOR, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, DELHI DELHI DELHI DELHI 110 088. 110 088. 110 088. 110 088. PAN : AAACO9334N. PAN : AAACO9334N. PAN : AAACO9334N. PAN : AAACO9334N. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -13(1), 13(1), 13(1), 13(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.C. GARG, CA. RESPONDENT BY : SHRI P. DAM KANUNJHA, SR.DR. ORDER ORDER ORDER ORDER PER G.D. PER G.D. PER G.D. PER G.D. AGRAWAL, VP AGRAWAL, VP AGRAWAL, VP AGRAWAL, VP : :: : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-XVI, NEW DELHI DATED 7 TH AUGUST, 2012 FOR THE AY 2008- 09. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD.ACIT ERRED IN LAW & ON FACTS IN MAKING ADDITION OF RS.4324908/- AND THE LD.CIT(A) ERRED IN CONFIRMING THE SAID ADDITION TO THE INCOME OF THE ASSESSEE TOWARDS DIFFERENCE IN CONTRACTUAL RECEIPTS BETWEEN THOSE AS PER AIR DATA AND AS PER BOOKS OF ACCOUNT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE PARTICULARLY WHEN THE DIFFERENCE WAS DULY EXPLAINED BY THE ASSESSEE WITH EVIDENCE. 2. THE LD.ACIT ERRED IN LAW & ON FACTS IN TAKING TH E TOTAL CONTRACTUAL RECEIPTS OF THE APPELLANT AS PER THE AIR DATA RATHER THAN AS PER THE BOOKS OF ACCOUNT OF THE APPELLANT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E WHEN THE ASSESSEE HAD DULY PROVED THAT CONTRACTUAL RECEIPTS SHOWN IN THE BOOKS OF ACCOUNT WERE ACCORDI NG TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND THE ITA-5791/DEL/2012 2 LD.CIT(A) ERRED IN LAW & ON FACTS IN CONFIRMING THE ACTION OF THE AO. 3. THE LD.ACIT ERRED IN LAW & ON FACTS IN TAKING ADVERSE VIEW OF THE FACT THAT SOME CONTRACTEES DID NOT RESPOND TO HIS NOTICES U/S 133(6) PARTICULARLY WHEN NOTICES WERE SENT AT THE REQUEST OF THE ASSESSEE AN D THE LD.CIT(A) ERRED IN LAW & ON FACTS IN CONFIRMING THE ACTION OF THE AO. 4. THE LD. CIT(A) ERRED IN LAW & ON FACTS IN CONFIR MING THE ACTION OF THE AO OF REJECTION OF BOOKS OF ACCOU NT U/S 145(3) OF THE INCOME TAX ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LD. CIT(A) ERRED ON FACTS IN OBSERVING THAT THE APPELLANT HAD AGREED BEFORE THE AO FOR INCLUSION OF THE AMOUNTS OF RS.4324908/- AS ITS CONTRACT RECEIPTS IN ACCORDANCE WITH AIR DATA. THE FACT OF THE MATTER I S THAT THE ASSESSEE HAD MADE A CONDITIONAL SUBMISSION AND HAD WORKED OUT THE NET EFFECT/DEVIATION IN CONTRACT RECEIPTS AT RS.3216950/- VIDE SUBMISSIONS DATED 09.11.2010. THE SUBMISSIONS WERE MADE AFTER EXPLAINING WHY THE RECEIPTS WERE PROPERLY EXCLUDED EARLIER. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE ASSESSEE DERIVES INCOME FROM EXECU TION OF THE CONTRACT WORK. FOR THE YEAR UNDER CONSIDERATION, T HE CONTRACT RECEIPT DISCLOSED BY THE ASSESSEE WAS `83,08,624/-. THE AS SESSEE HAD FILED THE RETURN DISCLOSING THE NET LOSS OF `45,36,133/-. THAT THE ASSESSING OFFICER CONSIDERED THE LOSS DISCLOSED BY THE ASSESS EE AS INCOME. FURTHER, THE ASSESSING OFFICER ALSO MADE THE ADDITI ON OF `45,37,596/- FOR THE ALLEGED VARIATION IN THE CONTRACT RECEIPT. HE STATED THAT THE ASSESSING OFFICER HAD RECEIVED THE INFORMATION FROM AIR DATA AS PER WHICH THE RECEIPT BY THE ASSESSEE WAS UNDERSTATED I N RESPECT OF FOUR PROJECTS BY A SUM OF `43,24,908/-. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT THE ASSESSEE IS FOLLOWING THE CONSISTE NT METHOD OF RECORDING THE RECEIPT WHEN THE BILL SUBMITTED BY TH E ASSESSEE IS APPROVED AND ACCEPTED BY THE CONTRACTEE. THAT THE ASSESSEE HAS RECORDED ALL THE RECEIPTS EITHER IN THIS YEAR OR IN THE NEXT YEAR AS PER ITA-5791/DEL/2012 3 THE METHOD OF ACCOUNTING BEING REGULARLY FOLLOWED B Y THE ASSESSEE. THAT THE ASSESSING OFFICER DID NOT GIVE THE DETAILS TO THE ASSESSEE ON WHAT BASIS AIR DATA IS BEING COLLECTED. THE ASSESS ING OFFICER ALSO DID NOT ALLOW ADEQUATE OPPORTUNITY TO RECONCILE THE DIF FERENCE BETWEEN RECEIPT AS PER A.I. R. AND AS PER BOOKS OF ACCOUNT. HE, THEREFORE, SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING O FFICER SHOULD BE DELETED OR ALTERNATIVELY, THE MATTER MAY BE SET ASI DE TO THE FILE OF THE ASSESSING OFFICER FOR PROVIDING ADEQUATE OPPORTUNIT Y TO THE ASSESSEE TO RECONCILE THE DIFFERENCE. HE FURTHER SUBMITTED THA T IF THE MATTER IS SET ASIDE, THE ASSESSING OFFICER SHOULD BE FURTHER DIRE CTED TO EXCLUDE THE INCOME FROM SUBSEQUENT YEARS IF HE IS MAKING THE AD DITION IN THIS YEAR IN RESPECT OF THE RECEIPT WHICH IS RECORDED BY THE ASSESSEE IN THE SUBSEQUENT YEAR. HE ALSO REQUESTED THAT THE ASSESS ING OFFICER MAY BE DIRECTED TO TREAT THE RETURNED INCOME AS LOSS OF `4 5,36,133/- AND NOT AS PROFIT. 4. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A). HOWEV ER, HE HAS NO SERIOUS OBJECTION WITH REGARD TO SETTING ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. 5. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND PERUSING THE FACTS OF THE CASE, IN OUR OPINION, THE MATTER N EEDS RE-EXAMINATION AT THE END OF THE ASSESSING OFFICER. WE, THEREFORE , SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. WE DIRECT THE ASSESSING OFFICER TO FIRST VERIFY WHETHER THE ASSESSEE FILED THE RETURN DISCLOSING LOSS OR PROFIT OF `45,36,133/-. IN THIS REGARD, HE MAY VERIFY THE ASSESSEES PROFIT & LOSS ACCOUNT, BOOKS OF ACCOUNT AND THEN VERIFY WHETHER THERE WAS LOSS O R PROFIT OF `45,36,133/-. FURTHER, HE WILL ALLOW ADEQUATE OPPO RTUNITY TO THE ASSESSEE TO RECONCILE THE DISCREPANCY IN THE RECEIP T OF THE ASSESSEE. AFTER CONSIDERING THE RECONCILIATION OF THE ASSESSE E AND ALL THE FACTS OF THE CASE AVAILABLE WITH HIM, HE WILL MAKE THE ASSES SMENT AFRESH IN ITA-5791/DEL/2012 4 ACCORDANCE WITH LAW. HOWEVER, BEFORE WE PART WITH THE MATTER, WE MAY MENTION THAT THE ASSESSING OFFICER SHOULD ENSUR E THAT NEITHER ANY RECEIPT REMAIN TO BE TAXED NOR SAME RECEIPT IS TAXE D TWICE. WITH THESE OBSERVATIONS, WE SET ASIDE THE MATTER TO THE FILE O F THE ASSESSING OFFICER. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEE MED TO BE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY, 2015. SD/- SD/- ( (( ( CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG ) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 28.01.2015 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S OSGL BUILDWELL PVT.LTD., M/S OSGL BUILDWELL PVT.LTD., M/S OSGL BUILDWELL PVT.LTD., M/S OSGL BUILDWELL PVT.LTD., LU LULU LU- -- -108, SECOND FLOOR, PITAMPURA, DELHI 108, SECOND FLOOR, PITAMPURA, DELHI 108, SECOND FLOOR, PITAMPURA, DELHI 108, SECOND FLOOR, PITAMPURA, DELHI 110 088. 110 088. 110 088. 110 088. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TA X, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -13(1), NEW DELHI. 13(1), NEW DELHI. 13(1), NEW DELHI. 13(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR