M/s. Srishti Constructions, Jalandhar V. The Additional Commissioner of Income Tax, Jalandhar

ITA 74/ASR/2011

• Counselvise Citation: 7420914 RSA 2011
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 03-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Rule of consistency
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.74(ASR)/2011 ASSESSMENT YEAR:2007-08 PAN :AAOFS6916P M/S. SRISHTI CONSTRUCTIONS, VS. THE ADDL. C.I.T. PUDA COMPLEX, JALANDHAR. RANGE-III, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. SANDEEP VIJH, CA RESPONDENT BY:SH. TARSEM LAL, 17 DATE OF HEARING: 17/12/2012 DATE OF PRONOUNCEMENT:27/12/2012 ORDER PER BENCH ; THE PRESENT APPEAL FILED BY THE ASSESSEE ARISES FR OM THE ORDER OF THE CIT(A), JALANDHAR, DATED 21.12.2010 FOR THE ASSESSM ENT YEAR 2007-08. THE ASSESSEE HAS FILED THE AMENDED GROUNDS OF APPEAL, W HICH ARE REPRODUCED HEREUNDER: 1. THAT THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFIRMING THE FOLLOWING ADDITIONS: - CLOSING WORK IN PROGRESS RS.36,41,702/- - DISALLOWANCE OF INTEREST ON INTEREST FREE LOANS RS. 38,000/- ITA NO.74/ASR/2011 2 2. THE LD. CIT(A) HAS WRONGLY REJECTED THE CONTENTI ON OF APPELLANT THAT ITS REGULAR AND CONSISTENT METHOD OF ACCOUNTING SHOULD BE ACCEPTED AND SHOULD NOT BE DISTURBED.. 3. THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT MOST OF THE STOCK LYING AT THE SITES HAS BEEN ACCOUNTED FOR IN THE RUNNING BILLS AT THE YEAR ED. IT WILL LEAD TO DOUBLE TAXATI ON. 4. THE ORDER OF CIT(A) IT SELF CONTRADICTORY ON THE ISSUE OF OPENING STOCK/OPENING WORK IN PROGRESS. THE LD. CIT (A) HAS COMMITTED INJUSTICE WHILE REJECTING THE ALTERNATE P LEA OF THE ASSESSEE TO ACCEPT THE ESTIMATE OF THE OPENING WORK IN PROGRESS AND STATING THAT IT HAS BEEN MADE ONLY IN THE APPEL LATE PROCEEDINGS AND WILL REQUIRE FRESH EXAMINATION FACT S. 5. THE LD. CIT(A) HAS FAILED TO ADDRESS TO THE FACT S THAT ASSESSEE IS A PARTNERSHIP FIRM OF TO PARTNERS AND HAVE INTEREST FREE LOAN OF RS.20.70 LACS FROM FRIENDS/RELATIVES IN ADDITION TO INTEREST FREE PARTNER CAPITAL OF RS.163.31 LACS WHEREAS SMALL AMO UNT OF RS.6.50 LACS HAS BEEN ADVANCED AND INTEREST FREE FU NDS ARE SUFFICIENT TO COVER INTEREST FREE ADVANCE. 6. THE LD. CIT(A) HAS WRONGLY DISTINGUISHED THE DEC ISION OF HONBLE SUPREME COURT IN THE MUNJAL SALES CORPORATI ON FROM THE CASE OF ASSESSEE WHEREAS FACTS OF THE BOTH CASE S ARE SIMILAR. 7. THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF I NTEREST U/S 234A, 234B AND 234C OF THE ACT. 8. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER OR DELET E ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE ASSESSEE HAS NOT PRESSED GROUNDS NO.5, 6 & 7 AND THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. 3. GROUNDS NO. 8 IS GENERAL IN NATURE, THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. ITA NO.74/ASR/2011 3 4. AS REGARDS GROUNDS NO. 1 TO 4, THE BRIEF FACTS A S ARISING FROM THE ORDER OF THE CIT(A) IN PARA 3 ARE REPRODUCED AS UNDER: THE ASSESSEE HAD DECLARED TOTAL INCOME OF RS.1,42, 43,430/- IN ITS RETURN OF INCOME. ITS GROSS TURNOVER DURING THE REL EVANT PREVIOUS YEAR WAS RS.28,78,16,634/-, ON WHICH NET PROFIT SHOWN WA S RS.1,42,11,424/-. THE ASSESSEE IS A CIVIL CONTRACTO R AND HAS EXECUTED VARIOUS PROJECTS LIKE RAILWAY OVERBRIDGES, AIRPORTS AND OTHER GOVERNMENT CONSTRUCTIONS. THE AO NOTICED DURING THE ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAD NOT SHOWN ANY CLO SING STOCK OR CLOSING WIP IN THE PROFIT & LOSS ACCOUNT/BALANCE SH EET FOR THE EAR ENDED 31.03.2007. THE TAX AUDITOR HAD REPORTED IN F ORM NO.3CD THAT THE ASSESSEE DID NOT MAINTAIN STOCK REGISTER, THOUG H THE METHOD OF VALUATION OF CLOSING STOCK WAS STATED TO BE AT COST OR MARKET VALUE WHICHEVER IS LOWER. THE AO HAD CALLED FOR INFORMATI ON ON THE MONTH- WISE QUANTITATIVE AND VALUE CHART OF PURCHASE AND C ONSUMPTION OF STEEL AND CEMENT BAGS AND DETAILS OF THE OPENING AN D CLOSING STOCK. THE MONTH-WISE DETAILS WERE SUBMITTED BY THE ASSESS EE BUT THE CLOSING AND OPENING STOCKS WERE STATED TO BE NIL. THE AO AL SO NOTICED THAT AS PER THE DETAILS SUBMITTED THE ENTIRE MATERIAL PURCH ASED BY THE ASSESSEE IN A PARTICULAR MONTH WAS SHOWN TO HAVE BEEN CONSUM ED IN THAT VERY MONTH ITSELF. THE AO, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO HOW THE ENTIRE MATERIAL PURCHASED IN A PARTICULAR M ONTH WAS CONSUMED IN THE SAME MONTH WHEN THERE WAS NO OPENING OR CLOS ING STOCK IN THE PROFIT & LOSS ACCOUNT. THE ASSESSEE SUBMITTED THAT STEEL AND CEMENT WERE CONSUMED WITHIN 2-3 DAYS OF ITS PURCHASE SINCE THE PRICE OF THESE FLUCTUATED ON DAY TO DAY BASIS. IT WAS FURTHER SUBM ITTED THAT THE FIRM MAINLY DEALT IN GOVERNMENT CONTRACTS WHERE THE PRAC TICE WAS TO ACCOUNT FOR ALL WORK IN PROGRESS AND STOCK AS ON 31 ST MARCH, AS WORK DONE. IT WAS FURTHER STATED THAT THIS WAS THE REASO N WHY THE RECEIPTS OF THE FIRM IN THE MONTH OF MARCH WERE VERY HIGH IN CO MPARISON TO OTHER MONTHS. IT WAS SUBMITTED THAT FIGURES APPEARING IN THE BALANCE SHEET UNDER THE HEAD CHEQUE IN HAND/TRANSIT REPRESENTED T HESE AMOUNTS. THE AO THEREAFTER ASKED THE ASSESSEE TO FURNISH MONTH-W ISE BREAK UP OF WORK DONE DURING THE YEAR, COMPLETE DETAILS IN QUAN TITY AND VALUE OF ALL MATERIAL PURCHASED IN THE MONTH OF MARCH, DATE- WISE AND SITE WHERE THESE MATERIAL HAD BEEN CONSUMED AND COMPLETE DETAILS, DATE- WISE OF BILLS RAISED IN THE MONTH OF MARCH ALONGWIT H COPIES OF THE BILLS. THE ASSESSEE SUBMITTED DETAILS WHICH SHOWED, AS PER THE AO THAT ITA NO.74/ASR/2011 4 SOME PAYMENT HAD BEEN RECEIVED BY THE ASSESSEE ON 3 0 TH MARCH AND 31 ST MARCH, 2007, BUT THE COPIES OF THE BILLS RAISED IN THE MONTH OF MARCH WERE NOT FURNISHED. THE AO ASKED THE ASSESSEE TO AGAIN FURNISH THE COPIES OF MEASUREMENT BILLS (MBS) FOR T HE MONTH OF MARCH. THE ASSESSEE SUBMITTED THE PAYMENT VOUCHER/M BS IN RESPECT OF SOME OF THE CONTRACTS. THE AO NOTED THAT THE PAY MENT VOUCHERS DID NOT MENTION THE DATE OF THE RESPECTIVE BILLS IN THE CASE OF PAYMENTS RECEIVED FROM AIRPORT AUTHORITY OF INDIA. THE MB OF JALANDHAR IMPROVEMENT TRUST WAS FILED WHICH SHOWED THAT BILL OF RS.42,28,790/- HAD BEEN RAISED ON 25.03.2007 AGAINST WHICH PAYMENT WAS STATED TO HAVE BEEN RECEIVED ON 30 TH MARCH 2007. HOWEVER, NO MBS/PAYMENT VOUCHERS OR OTHER VOUCHERS TO SHOW THE DATE ON WHIC H BILLS WERE RAISED IN OTHER CASES WERE FILED. THE AO, THEREFORE , ASKED THE ASSESSEE TO SHOW THAT ALL THE WORK DONE TILL 31.03. 2007 HAD BEEN ACCOUNTED FOR DURING THE YEAR ITSELF AND THERE WAS NO CLOSING STOCK/WIP. IN THE SHOW CAUSE THE AO MENTIONED THAT THE MB OF JALANDHAR IMPROVEMENT TRUST WAS DATED 25.03.2007 AN D IT WAS PRESUMED THAT PAYMENT RAISED BY THE ASSESSEE ON 30 TH AND 31 ST MARCH, 2007 WOULD BE IN RESPECT OF BILLS RAISED BY 26 TH MARCH, 2007.SHE EXPRESSED THE OPINION THAT THE PURCHASE AFTER 25 TH & 26 TH MARCH, 2007 SHOULD HAVE BEEN ACCOUNTED FOR AS CLOSING STOCK/WIP AND ASKED THE ASSESSEE TO EXPLAIN THE SAME. SHE ALSO ASKED FOR DE TAILS OF THE QUANTITY AND VALUE OF EACH ITEM OF PURCHASE MADE FROM 25.03. 2007 TO 31.03.2007. THE ASSESSEE REPLIED THAT RUNNING BILL DATED 25.03.2007 OF JALANDHAR IMPROVEMENT TRUST WOULD SHOW A ITEM NOS. AT 6 & 7 THAT STEEL AND CEMENT HAD BEEN ACCOUNTED FOR ON THE BASI S OF MATERIAL SUPPLIED WHICH CORROBORATED THE CONTENTION THAT ALL THE MATERIAL AT SITE WAS ACCOUNTED FOR AS ON 31.03.2007. THE DETAILS OF PURCHASES FROM 25.03.2007 TO 31.03.2007 WERE SUBMITTED. 3.2. THE AO, HOWEVER, WAS NOT SATISFIED WITH THE AS SESSES EXPLANATION. SHE HELD THAT THE BILL OF JALANDHAR IM PROVEMENT TRUST ACCOUNTED FOR STEEL AND CEMENT PURCHASES ONLY UPTO 25.03.2007, BUT MATERIAL WORTH RS.22,27,607/- PURCHASED AFTER 25.03 .2007 TILL THE END OF THE YEAR HAD NOT BEEN ABSOLUTELY ACCOUNTED FOR. HENCE, THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE HAD UNDER- VALUED ITS CLOSING STOCK BY NOT SHOWING THE VALUE OF MATERIAL PURCHASE D AFTER 25.03.2007 IN THE CLOSING STOCK AND THAT THE ASSESSEE HAD NOT PRODUCED MBS OR ANY OTHER DOCUMENTARY EVIDENCE IN SUPPORT OF THE CO NTENTION THAT ALL THE WORK DONE TILL 31.03.2007 AND ALL MATERIAL PURC HASED TILL ITA NO.74/ASR/2011 5 31.03.2007 HAD BEEN ACCOUNTED FOR IN THE WORK DONE SHOWN IN THE PROFIT & LOSS ACCOUNT SINCE THERE WAS NO CLOSING ST OCK OR WIP. SHE EXPRESSED THE OPINION THAT SINCE IT TOOK AT LEAST 5 -6 DAYS TO GET THE BILLS CLEARED AND PAYMENTS RELEASED, THE PAYMENT RECEIVED ON 30 TH & 31 ST MARCH HAD TO BE IN RESPECT OF BILLS RAISED BY 25 TH MARCH, 2007 AT THE LATEST. THE AO REFERRED TO THE JUDGMENT IN THE CASE OF GEO TECH CONSTRUCTION CORPORATION VS. DCIT 203 CTR (KER.) 49 3 IN WHICH IT WAS NOTED THAT INCOME OF CONTRACTOR COULD NOT BE DE DUCTED PROPERLY FROM THE ACCOUNTS UNLESS THE WORK IN PROGRESS WAS T AKEN INTO CONSIDERATION. IN THIS DECISION THE ESTIMATED ADDIT ION ON ACCOUNT OF CLOSING STOCK WORK IN PROGRESS WAS UPHELD. 3.3. THE AO MADE THE FOLLOWING ADDITIONS ON ACCOUNT OF CLOSING STOCK/WIP:- A) MATERIAL = RS.22,27,607/- AS PER THE DETAILS FUR NISHED BY THE ASSESSEE. B) WAGES = RS.9,21,979/- BEING 1/6 TH OF THE EXPENDITURE INCURRED UNDER THIS HEAD IN THE MONTH OF MARCH, 200 7. C) EARTH FILLING : RS.4,35,916/-. THE AO NOTED THAT EXPENDITURE OF RS.3,06,500/- WAS INCURRED BY THE ASSESSEE IN EXECUTING THE CONTRACTS IN PUNJAB FROM 26 TH MARCH, 2007 TO 31 ST MARCH, 2007 WHICH SHE HELD OBVIOUSLY HAVE TO FORM PART OF THE CLOSING WIP. EXPENDITURE IN OTHER STATES OF RS.7,76,5000/- WAS INCURRED UNDER THIS HEAD IN THE MONTH OF MARCH AND THE AO ALSO TOOK 1/6 TH OF SUCH EXPENSES ON PRO-RATA BASIS AND ADDED RS.4,35,916/- AS CLOSING WIP. D) FUEL EXPENSES = RS.56,220/-. THE ADDED RS.56,22 0/- ON ACCOUNT OF FUEL CONSUMPTION ON PRO-RATA BASIS TO TH E CLOSING WIP. 5. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 6. THE LD. COUNSEL FOR THE ASSESSEE, SH. SANDEEP VI JH, CA, AT THE OUTSET POINTED OUT AT PB-12 WHERE THE ASSESSEE HAS BEEN FO LLOWING THE SAME METHOD OF ACCOUNTING FOR THE PAST MANY YEARS. HE PO INTED OUT THAT FOR THE ITA NO.74/ASR/2011 6 A.Y. 2004-05 WHERE THE ASSESSMENT MADE WAS UNDER SE CTION 143(3) AND ALSO FOR THE A.Y. 2005-06 WHERE THE ASSESSMENT WAS MADE U/S 143(3), WHERE NO CLOSING STOCK HAS BEEN DECLARED, HAS BEEN ACCEPTED BY THE INCOME TAX DEPARTMENT AND THERE IS NO DISPUTE TO THE FACT. AS REGARDS TO THE ASSESSMENT YEARS 2006-07 AND 2007-08, SIMILAR METHOD OF ACCOUN TING HAS BEEN FOLLOWED. ACCORDINGLY, THE LD. COUNSEL FOR THE ASSE SSEE, MR. SANDEEP VIJH RELIED UPON DECISIONS OF VARIOUS COURTS OF LAW FOR WHICH COPIES OF THE RELEVANT ORDERS ARE PLACED ON RECORD, AS UNDER: I) CIT VS. K.S. BHATIA 269 ITR 577 (P&H) II) CIT VS. LEADER VALVES LTD. 295 ITR 273 (P&H) III) CIT VS. SANT RAM MANGAT RAM 275 ITR 312 (P&H) IV) CIT VS. PUNJAB STATE INDUSTRIAL DEVELOPMENT CORPN. 323 ITR 495 (P&H) V) CIT VS. HARYANA STATE INDUSTRIAL CEMENT CORPN. LTD. 326 ITR 640 (P&H). VI) UNITED COMMERCIAL BANK VS. CIT 240 ITR 355 (SC) VII) CIT VS. MAHALAXMI GLASS WORKS (P) LTD. 318 ITR 116 (BOM.) 6.1. HE, THEREFORE, ARGUED THAT FOLLOWING THE RULE AND PRINCIPLE OF CONSISTENCY, THE AO WAS NOT JUSTIFIED IN MAKING TH E CASE OF NON-DISCLOSURE OF CLOSING STOCK AND THAT TOO WITHOUT PROVIDING OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. OUR ATTENTION WAS INVITED TO THE ORDE R OF THE ASSESSMENT WHERE THE ASSESSEE WAS NEVER PROVIDED ANY OPPORTUNITY WHI LE MAKING SUCH ADDITION. THEREFORE, IN THE INTEREST OF NATURAL JUS TICE ALSO, THE AO IS NOT ITA NO.74/ASR/2011 7 JUSTIFIED IN COMING TO THE CONCLUSION THAT CLOSING STOCK HAS NOT BEEN DECLARED. 6.2. IT WAS ALSO ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE AO IS REQUIRED TO DEMONSTRATE BOTH THE METHODS OF ACCOUNT ING I.E. ONE WHICH HAS BEEN ADOPTED BY THE ASSESSEE AND THE OTHER WHICH IS REQUIRED BY THE REVENUE WHERE THE AO HAS POINTED OUT UNDER ESTIMATION OF T HE PROFIT, WHICH IN FACT IS NOT THERE IN THE PRESENT CASE. IT WAS ALSO ARGUED B Y THE LD. COUNSEL FOR THE ASSESSE THAT IF THE CLOSING STOCK WAS ADDED BY THE AO THEN THE AO IS ALSO REQUIRED TO GIVE DEDUCTION OF THE OPENING STOCK AS WELL. THE AO COULD HAVE CHANGED THE METHOD OF ACCOUNTING, WHICH WAS POSSIB LE ONLY BY INCLUDING OPENING STOCK AS WELL AS THE CLOSING STOCK IN THE T RADING ACCOUNT WHICH HAS NOT BEEN DONE. 6.3. ON MERIT, THE LD. COUNSEL FOR THE ASSESSEE ARG UED THAT THE ASSESSEE HAD PRODUCED MEASUREMENT BOOK OF JALANDHAR IMPROVEMENT TRUST, IN WHICH THE BILL WAS RAISED ON 25 TH MARCH. THE AO PRESUMED THAT IN THE OTHER CASES OF CONTRACTEES, THE ASSESSEE HAS NOT DECLARED PURCHASE S FROM 25 TH MARCH, 2007 TO 31 ST MARCH, 2007 AND ACCORDINGLY VALUED THE PURCHASES O F THE MATERIAL AT RS.22,27,607/- TO WHICH THE AO ADDED EXPENSES OF WA GES, EARTH FILLING AND FUEL EXPENSES TOTALING TO RS.36,41,702/- FOR WHICH THE ADDITION WAS MADE. WHEREAS THIS IS NOT A FACT, THE ASSESSEE HAD RECEIV ED THE PAYMENT FROM OTHER ITA NO.74/ASR/2011 8 CONTRACTEES EVEN UPTO 31 ST MARCH. SUCH COMPUTATION OF INCOME IS WITHOUT ANY BASIS AND IS ON SURMISES AND CONJECTURES AND T HEREFORE, CANNOT BE SUBJECT MATTER OF ADDITION IN THE PRESENT CASE. 7. THE LD. DR, SH. TARSEM LAL, ON THE OTHER HAND, R ELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. BRITISH PAINTS INDIA LTD. 188 ITR 44 (SC). HE FURTHER ARGUED THAT THE ASSESSEE HAS NOT ACCOUNTED FOR WORK IN PROGRESS AND ALSO RELIED UPON THE DECISION, RELIED UPON BY THE AO. HE ALSO ARGUED THAT THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE H AS BEEN FOLLOWING THE SAME METHOD OF ACCOUNTING CONSISTENTLY FOR MANY YEARS AS POINTED OUT AT PB-12. THIS FACT HAS NOT BEEN REBUTTED BY THE REVENUE. THE REFORE, IT IS UNDISPUTED FACT THAT WHEN METHOD OF ACCOUNTING HAS BEEN FOLLOW ED CONSISTENTLY AND IN THE ABSENCE OF ANY JUSTIFICATION BY THE LOWER AUTHO RITIES IN THEIR ORDERS, A DIFFERENT METHODOLOGY CANNOT BE ADOPTED DEPARTING F ROM THE PAST PRACTICE AS A MATTER OF PRINCIPLE OF CONSISTENCY. THEREFORE, TH E AO AS WELL AS THE LD. CIT(A) ARE NOT JUSTIFIED IN ADOPTING DIFFERENT METH ODOLOGY AS IN THE PRESENT CASE. THE RELIANCE WAS PLACED ON THE DECISIONS OF V ARIOUS COURTS OF LAW UPON BY THE LD.AR FOR THE ASSESSEE, SH. SANDEEP VIJH MEN TIONED HEREINABOVE. ITA NO.74/ASR/2011 9 8.1. MOREOVER, IF AT ALL, THE METHOD OF ACCOUNTING IS CHANGED BY THE AO THEN FOR INCLUDING THE CLOSING STOCK IN THE INCOME, THE AO IS REQUIRED TO GIVE DEDUCTION FOR THE OPENING STOCK WHICH IS ACCEPTED M ETHOD OF ACCOUNTING. THIS HAS NOT BEEN DONE BY THE AO. THEREFORE, HE IS NOT JUSTIFIED IN MAKING ANY ADDITION ON ACCOUNT OF CLOSING STOCK. 8.2. NOTHING HAS BEEN BROUGHT BY THE AO OR NOTHING HAS BEEN DEMONSTRATED BY THE AO THAT THE METHOD ADOPTED BY THE ASSESSEE IS DIFFERENT AS REQUIRED BY THE REVENUE AND HOW THE PROFIT HAS B EEN UNDER ESTIMATED HAS NOT BEEN WORKED OUT PROPERLY. THE AO HAS RELIED UPO N THE MEASUREMENT BOOK OF JALANDHAR IMPROVEMENT TRUST AND THE SAME HA S BEEN APPLIED ON THE OTHER CONTRACTEES WHICH IN FACT IS NOT TRUE. IT HAS BEEN ARGUED AND ALSO IS ON RECORD THAT THE ASSESSEE HAD RECEIVED PAYMENT UPTO 30 TH MARCH. THEREFORE, ON NO ACCOUNT, THE PURCHASE OF MATERIAL BETWEEN 25 TH MARCH 2007 TO 31 ST MARCH, 2007 CAN BE RS.22,27,607/-. THEREFORE, NO AD DITION IN THE PRESENT CASE CAN BE MADE ON SURMISES AND CONJECTURES. 8.3. AS REGARDS THE ARGUMENTS OF THE LD. DR, WHO RE LIED UPON THE DECISION OF GEO TECH CONSTRUCTION CORPORATION VS. DY. CIT ( 2006) 203 CTR 493 (KERALA), WHICH WAS RELIED UPON BY BOTH THE AUTHORI TIES BELOW AS WELL CANNOT HELP THE REVENUE SINCE THE FACTS IN THAT CASE ARE D ISTINGUISHABLE FOR THE REASONS, THE AO HAD ADDED THE DIFFERENCE IN THE OPE NING STOCK AND CLOSING ITA NO.74/ASR/2011 10 STOCK OF THE WORK IN PROGRESS TO THE INCOME OF THE ASSESSEE. IN THE PRESENT CASE, NO OPENING STOCK AND CLOSING STOCK AND WORK IN PROGRESS IS THERE AND THE AO IN FACT HAS NOT TAKEN THE OPENING STOCK. THE RELIANCE PLACED BY THE LD. DR IN THE CASE OF CIT VS. BRITISH PAINTS INDIA LTD . 188 ITR 44 (SC) IS ALSO NOT APPLICABLE SINCE THE FACTS IN THAT CASE ARE QUI TE DISTINGUISHABLE FOR THE REASONS THAT THE ASSESSEE VALUED THE GOODS IN PROCE SS. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE AO IS NO T JUSTIFIED IN MAKING ANY ADDITION. THEREFORE, THE ORDER OF THE LD. CIT(A) IS DIRECTED TO REVERSED AND ALL THE GROUNDS OF THE ASSESSEE I.E. 1 TO 4 ARE ALL OWED. THUS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSE IN ITA NO.74(ASR)/2011 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH DECEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27TH DECEMBER., 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. SRISHTI CONSTRUCTIONS, JALANDHAR. 2. THE ADDL. CIT, RANGE-III, JALANDHAR. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER ITA NO.74/ASR/2011 11 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.