M/s. Asian Developers, Ahmedabad V. The Income tax Officer,Ward-9(2), Ahmedabad

ITA 616/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67754 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 23-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: A L THAKKAR
• Section: 194C

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , ,, , ! ! ! ! ' #$ ' #$ ' #$ ' #$, , , , % % % % BEFORE S/SHRI B.P. JAIN, ACCOUNTANT MEMBER AND KUL BHARAT, JUDICIAL MEMBER ITA NO.616/AHD/2010 [ASSTT.YEAR : 2006-2007] M/S.ASIAN DEVELOPERS 2 ND FLOOR, CITY MALL BESIDE RAJPATH CLUB S.G. HIGHWAY ROAD AHMEDABAD. PAN : AAMFA 2576 R /VS. ITO, WARD-9(2) AHMEDABAD. ( (( ('( '( '( '( / APPELLANT) ( (( ()*'( )*'( )*'( )*'( / RESPONDENT) +,$ - . / ASSESSEE BY : SHRI A.L. THAKKAR - . / REVENUE BY : SHRI K.C. MATHEWS, SR.DR ' 0 - $1/ DATE OF HEARING : 23 RD SEPTEMBER, 2013 234 - $1/ DATE OF PRONOUNCEMENT : 27.09.2013 5 / O R D E R PER B.P. JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LEARNED C IT(A)-XV DATED 15.12.2009 FOR THE ASSESSMENT YEAR 2006-2007. 2. THE ASSESSEE HAS RAISED THE FOLLOWING SOLE GROUN D: ITA NO.616/AHD/2010 -2- 1. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDIT ION OF RS.77,65,500/- MADE BY THE AO U/S.40(A)(IA) OF THE I.T.ACT FOR THE ALLEGED DEEMED SUB-CONTRACT. 3. THE BRIEF FACTS ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS AS CONTRACTOR FOR CONSTRUCTION OF BUIL DING. THE COMPANY IS NOT A SUPPLIER OF CEMENT, STEEL ETC. TH E ASSESSEES CONTENTION IS THAT IT MADE PURCHASES FROM VASTUCHAK RA HOUSING & MANAGEMENT PVT. LTD., (VH&MPL FOR SHORT) WHICH ACCORDING TO THE AO IS DEVOID OF ANY MERIT AND WITH OUT ANY SUBSTANCE. IN SPITE OF SEVERAL OPPORTUNITY OFFERED TO THE ASSESSEE TO PRODUCE PURCHASE BILLS/VOUCHERS ETC., THE ASSESS EE FAILED TO PRODUCE THE SAME FOR VERIFICATION OF THE AO. THE A O ACCORDINGLY OBSERVED THAT THE TRANSACTION ENTERED I NTO WITH VH&MPL TO BE CONSIDERED AS A SUB-CONTRACT GIVEN B Y THE ASSESSEE, AND IT CAN BE CONCLUDED THAT VH&MPL CAR RIED OUT THE CONSTRUCTION WORK FOR THE ASSESSEE AS PER THE S UB-CONTRACT. THE ASSESSEE FAILED TO DEDUCT THE TAX AS REQUIRED U NDER SECTION 194C OF THE IT ACT ON PAYMENT OF RS.1,00,40,775/- A ND THE ASSESSEES CASE IS CLEARLY COVERED UNDER SECTION 40 (A)(IA) OF THE IT ACT. THE AO, ACCORDINGLY, AFTER REDUCING THE PA YMENT ON WHICH THE TAX AT SOURCE HAS BEEN DEDUCTED OBSERVED THAT THE ASSESSEE OUGHT TO HAVE DEDUCTED THE TAX AS REQUIRED UNDER SECTION 194C OF THE ACT ON THE BALANCE AMOUNT OF RS.77,65,5 00/-, WHICH THE ASSESSEE FAILED TO DEDUCT WITHIN THE TIME ALLOW ED UNDER SECTION 194C OF THE ACT. ACCORDINGLY, THE ASSESSEE S CASE IS COVERED UNDER SECTION 40(A)(IA) OF THE IT ACT, AND THE AMOUNT OF RS.77,65,500/- BEING SUB-CONTRACT AMOUNT PAID WITHO UT ITA NO.616/AHD/2010 -3- COMPLYING THE PROVISIONS OF SECTION 194C OF THE ACT IS DISALLOWED UNDER SECTION 40(A)(IA) OF THE IT ACT. 4. THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE A O AND FURTHER OBSERVED THAT ACCORDING TO THE ARGUMENTS MA DE BY THE LEARNED COUNSEL OF THE ASSESSEE APPEARING BEFORE HI M THAT ENTIRE EXPENDITURE WAS TAKEN TO BE WORK-IN-PROGRESS AND TH AT IT WAS NOT NIL RETURN, BUT RETURN OF LOSS OF RS.1,01,75,249/-, AND IF ANY ADDITION WAS MADE AT ALL, IT WOULD BE ONLY REDUCE T HE LOSS BUT WILL NOT BECOME INCOME. ACCORDINGLY, THE AO WAS DIREC TED TO TAKE LOSS RETURNED BY THE ASSESSEE IN ITS RETURN FOR COM PUTATION PURPOSES WHILE GIVING APPEAL EFFECT. 5. THE LEARNED COUNSEL FOR THE ASSESSEE MADE ARGUME NTS ON SIMILAR LINE, AS MADE BEFORE THE AO AND THE CIT(A). THE LEARNED DR, ON THE OTHER HAND, ARGUED THAT IF THE ASSESSEE HAD TO REVISE THE CLAIM, IT SHOULD BE DONE ONLY BY REVISING THE R ETURN OF INCOME, IN VIEW OF THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF GOETZE (INDIA) LTD. V. COMMISSIONER OF INCOME-TAX, 284 ITR 323. THE LEARNED DR RELIED ON THE ORDERS O F THE AUTHORITIES BELOW. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE DID NOT SUBMIT ANY BILLS OR VOUCHERS FOR PURCHASE OF STEEL, CEMENT ETC., AND THEREFORE, THE AO HAS RIGHTLY CONCLUDED THAT V H&MPL HAS CARRIED OUT THE CONSTRUCTION WORK FOR THE ASSESSEE AS PER THE SUB- ITA NO.616/AHD/2010 -4- CONTRACT. THE ASSESSEE HAS FAILED TO DEDUCT THE TA X AT SOURCE UNDER SECTION 194C OF THE ACT ON THE AMOUNT OF RS.7 7,65,500/-, AND THEREFORE, THE ASSESSEE HAS VIOLATED THE PROVIS ION OF SECTION 40(A)(IA) OF THE ACT. THE CONTENTION OF THE ASSESS EE HAS BEEN ADMITTED BY THE LEARNED CIT(A) THAT ENTIRE EXPENDIT URE WAS TAKEN TO BE WORK-IN-PROGRESS, AND IT WAS NOT NIL RETURN, BUT RETURN OF LOSS. ACCORDINGLY, THE LEARNED CIT(A) HAS RIGHTLY DIRECTED THE AO TO TAKE LOSS RETURNED BY THE ASSESSEE IN ITS RET URN FOR COMPUTATIONAL PURPOSE, WHILE GIVING APPEAL EFFECT. WE DO NOT FIND ANY INFIRMITY IN HIS ORDER ON THIS ISSUE, WHIC H IS CONFIRMED. THUS GROUND OF THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, ITA NO.616/AHD/2010 OF THE ASSESS EE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( ' #$ ' #$ ' #$ ' #$ /KUL BHARAT) /JUDICIAL MEMBER ( . .. . . .. . / B.P.JAIN ) /ACCOUNTANT MEBER C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD