ACIT-15(2)(1), MUMBAI V. M/S.IOT ENGINEEING PROJECT LIMITED, MUMBAI

ITA 6308/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2062 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 18-10-2017
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH, JM ITA NO.6308/MUM/2017 ( ASSESSMENT YEAR: 2013-14 ) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-15(2)(1) R. NO. 357, 3 RD FLOOR, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI-400020. VS. M/S IOT ENGINEERING PROJECT LIMITED, PLOT NO. 15, IOT HOUSE, NEAR NAHUR RAILWAY STATION, NAHUR (WEST), MUMBAI-400078. PAN/GIR NO.AABCI 6822 N (APPELLANT ) .. (RESPONDENT ) ITA NO.6435/MUM/2017 ( ASSESSMENT YEAR: 2013-14 ) M/S IOT ENGINEERING PROJECT LIMITED, PLOT NO. 15, IOT HOUSE, NEAR NAHUR RAILWAY STATION, NAHUR (WEST), MUMBAI-400078. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-15(2)(1) R. NO. 357, 3 RD FLOOR, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI-400020. PAN/GIR NO.AABCI 6822 N (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI CHAUDHARY ARUN K. SINGH (DR) ASSESSEE BY MS. VASANTI PATEL (AR) DATE OF HEARING 28/08/2019 DATE OF PRONOUNCEMENT 06/09/2019 / O R D E R PER: R.C. SHARMA, A.M. THE APPEAL BY THE REVENUE AND THE CROSS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 14/07/2017 OF L D. CIT(A)-24, MUMBAI ITA NO. 6308 &6435/MUM/2017 ACIT VS M/S IOT ENGINEERING PROJECT LTD. 2 FOR THE A.Y. 2013-14 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN THE APPEAL FILED BY THE REVENUE, THE REVENUE IS AGGRIEVED FOR DELETING THE DISALLOWANCE BY THE LD. CIT(A) ON ACCO UNT OF EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND. WE FOUND THAT T HE TAX EFFECT IN THE APPEAL OF THE REVENUE IS LESS THAN RS. 50.00 LACS, THEREFORE, IN VIEW OF THE CBDT CIRCULAR NO. 17/2019 DATED 08/08/2019 THE APPEAL DESERVES TO BE DISMISSED. 3. IN THE CROSS APPEAL, THE ASSESSEE IS AGGRIEVED F OR THE ADDITION OF RS. 5,32,236/- ON ACCOUNT OF PROVISION FOR FORESEEA BLE LOSSES. 4. AT THE OUTSET, THE LD AR OF THE ASSESSEE PLACED ON RECORD THE ACCOUNTS OF THE SUBSEQUENT YEAR WHEREIN THE PROVISI ON MADE IN THE EARLIER YEAR WAS AGAIN WRITTEN OFF AS INCOME BY THE ASSESSEE. 5. RIVAL CONTENTIONS HAVE BEEN MADE AND RECORD PERU SED. IT WAS THE CONTENTION OF THE LD AR THAT IT IS A STATUTORY REQU IREMENT TO PREPARE AND MAINTAIN ITS BOOKS OF ACCOUNT AND COMPUTE ITS PROFI T AND LOSS FOR THE PERIOD IN ACCORDANCE WITH THE ACCOUNTING STANDARD P RESCRIBED BY THE ICAI AND NOTIFIED BY THE MCA UNDER THE COMPANIES A CCOUNTING STANDARD RULES, 2006. THUS, WHERE PROVISION FOR EXPECTED LOS SES IS RECOGNIZED BY AN ASSESSEE IN ACCORDANCE WITH REQUIREMENT OF AS-7, IT SHALL NOT BE ITA NO. 6308 &6435/MUM/2017 ACIT VS M/S IOT ENGINEERING PROJECT LTD. 3 REGARDED AS CONTINGENT IN NATURE, AS IT IS RECOGNIZ ED IN THE BOOKS OF ACCOUNT IN ACCORDANCE WITH THE STATUTORY REQUIREMEN T. FURTHER ADHERENCE TO APPLICABLE ACCOUNTING STANDARDS LEAD T O THE TRUE AND FAIR VIEW OF THE FINANCIAL STATEMENTS I.E. BY NOT OVERST ATING IT PROFITS. KEEPING IN VIEW THE FACT THAT THE PROVISION HAS AGAIN BEEN TAKEN AS INCOME IN THE SUBSEQUENT YEAR BY REVERSING THE ENTRY, THERE IS NO JUSTIFICATION FOR DISALLOWING THE SAME. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D WHEREAS APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH SEPTEMBER, 2019. SD/- (PAWAN SINGH) SD/- (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 06/09/2019 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//