DEEPAK HIRALAL SOLANKI, MUMBAI V. ACIT RG 22(1), NAVI MUMBAI

ITA 7777/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100978 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MISHRA
• Assessee Lawyers: REEPAL TRALSHAWALA
• Keywords: Additional evidence

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN , AM AND AMARJIT SINGH , JM ./ I.T.A. NO . 7777 / MUM/20 1 2 ( / ASSESSMENT YEA R : 20 09 - 10 ) DEEPAK HIRALAL SOLANKI, 1301, HIMGIRI, NEELKANTH VIHAR, GHATKOPAR (E), MUMBAI - 4000 86 / VS. ASSTT OF COMMISSIONER OF INCOME TAX - 22 (1) TOWER - 6, ROOM NO. 10 , 4TH FLOOR, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI - 400703 . ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAUPS0982P / APPELLANT S BY SHRI REEPAL TRALSHAWALA / R EVENUE BY SHRI S K MISHRA / DATE OF HEARING : 0 9 .9 . 201 5 / DATE OF PRONOUNCEMENT: 9 . 9. 201 5 / O R D E R P ER B R BASKARAN, AM : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 29 - 10 - 2012 PASSED BY LD CIT(A) - 33, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING ADDITION OF RS.75.00 LAKHS MADE BY THE ASSESSING OFFICER AND ALSO IN NOT GIVING DEDUCTION OF WORK IN PROGRESS AMOUNT AND TAXES AMOUNT. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. T HE ASSESSEE IS A CIVIL CONTRACTOR AND INTERIOR DECORATOR. DURING THE YEAR UNDER CONSIDERATION, IT UNDERTOOK A CONTRACT WORK FROM M/S AMAR PLASTICS TO CARRY OUT INTERIOR ITA NO. 7777 / MUM/20 1 2 2 DECORATION WORK FOR A BUILDING. THE ASSESSEE DECLARED THE RECEIPTS FROM M/S AMAR PLAST ICS AT RS.2,41,05,800/ - EXCLUDING VAT AND SERVICE TAX. THE AO CALLED FOR DETAILS FROM M/S AMAR PLASTICS AND FOUND THAT THE SAID CONCERN HAS DEBITED A SUM OF RS.3,16,05,800/ - . WHEN ENQUIRED ABOUT THE DIFFERENCE, THE ASSESSEE SUBMITTED THAT IT HAS RECEIVED A SUM OF RS.75.00 LACS AS ADVANCE FROM THE ABOVE SAID CONCERN AGAINST THE PENDING WORKS AND THE SAME WAS KEPT AS ADVANCE IN THE BALANCE SHEET, WHERE AS M/S AMAR PLASTICS HAD ACCOUNTED THE SAME AS EXPENDITURE. THE AO NOTICED THAT THE ASSESSEE HAD RAISED T HREE BILLS VIZ., RA 1, 2 & 3 AND THE ASSESSEE HAS ACCOUNTED ONLY RA 1 & 2 AS CONTRACT RECEIPTS. SINCE THE ASSESSEE HAD ALREADY RAISED RA 3 AND RECEIVED THE PAYMENT ALSO, THE AO HELD THAT THE AMOUNT OF RS.75.00 LAKHS RECEIVED BY IT, IS ASSESSABLE AS INCOME OF THE ASSESSEE. ACCORDINGLY HE ADDED THE ABOVE SAID INCOME OF RS.75.00 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. THE LD CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. THE LD A.R SUBMITTED THAT THE ASSESS EE HAD ACTUALLY RECEIVED ADVANCE PAYMENTS ONLY AND IT HAS SPENT ONLY A SUM OF ABOUT RS.15.00 LAKHS ON THE PENDING WORKS. HENCE THE ABOVE SAID SUM OF RS.15.00 LAKHS WAS SHOWN AS WORK IN PROGRESS IN THE BOOKS OF ACCOUNT. SINCE THE ASSESSEE HAD RECEIVED T HE PAYMENT OF RS.75.00 LAKHS, HE HAD PAID THE SERVICE TAX ALSO. HE SUBMITTED THAT THE ASSESSEE HAS CARRIED OUT THE BALANCE WORK IN THE SUCCEEDING YEAR AND HENCE HE HAS DECLARED THE ABOVE SAID RECEIPT OF RS.75.00 LAKHS IN THE SUCCEEDING YEAR. THE LD A.R S UBMITTED THAT THE ASSESSEE IS NOT BOUND BY THE ACCOUNTING TREATMENT GIVEN BY M/S AMAR PLASTICS AND HENCE THE TAX AUTHORITIES WERE NOT JUSTIFIED IN ASSESSING THE AMOUNT OF RS.75.00 LAKHS AS INCOME OF THE ASSESSEE ON THE BASIS OF ACCOUNTING TREATMENT GIVEN B Y M/S AMAR PLASTICS. ITA NO. 7777 / MUM/20 1 2 3 ALTERNATIVELY, THE LD A.R SUBMITTED THAT THE ASSESSEE SHOULD HAVE BEEN GIVEN DEDUCTION FOR AMOUNT SPENT ON WORK IN PROGRESS AND TAXES. 4. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS OBTAINED A CONFIRMATION LETTER FROM M/S AMAR PLA STICS TO SUPPORT HIS STAND. HE SUBMITTED THAT THE ABOVE SAID LETTER ALONG WITH COPIES OF BILLS FOR PURCHASE OF MATERIALS IS FURNISHED AS ADDITIONAL EVIDENCES. HE PRAYED THAT THESE ADDITIONAL EVIDENCES MAY BE ADMITTED AND THEY MAY BE SENT TO THE AO FOR HI S EXAMINATION. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD FURNISHED COPIES OF CORRESPONDENCES EXCHANGED BETWEEN THE ASSESSEE AND M/S AMAR PLASTICS TO SUBSTANTIATE HIS CLAIM, BUT THEY HAVE NOT BEEN CONSIDERED BY THE TAX AUTHORITIES. ACCORDINGLY HE SUBMITT ED THAT THE ENTIRE ISSUE REQUIRES RECONSIDERATION ON THE BASIS OF FRESH MATERIALS BROUGHT ON RECORD BY THE ASSESSEE. 5. THE LD D.R, ON THE CONTRARY, PLACED HEAVY RELIANCE ON THE ORDER PASSED BY LD CIT(A). 6. WE NOTICE THAT THE ASSESSING OFFICER HAS ASSESSED THE SUM OF RS.75.00 LAKHS ON THE BASIS OF ACCOUNTING TREATMENT GIVEN BY M/S AMAR PLASTICS. ACCORDING TO THE ASSESSEE, HE HAS RECEIVED THE ABOVE SAID AMOUNT OF RS.75.00 LAKHS AS ADVANCE ONLY AND AS PER THE REQUEST MADE BY M/S AMAR PLASTICS, RA - 3 BILL WAS RAISED. IT IS THE CONTENTION OF THE ASSESSEE THAT ACTUAL WORK WAS EXECUTED IN THE SUCCEEDING YEAR ONLY. IN THIS REGARD, THE ASSESSEE HAS NOW FURNISHED A CONFIRMATION LETTER OBTAINED FROM M/S AMAR PLASTICS. THE LD A.R ALSO SUBMITTED THAT THE ASSESSING OFFICER HAS DRAWN ADVERSE CONCLUSIONS AGAINST THE ASSESSEE WITHOUT EXAMINING M/S AMAR PLASTICS. THE ASSESSEE HAS ALSO FURNISHED COPIES OF BILLS EVIDENCING PURCHASE OF MATERIALS IN THE SUCCEEDING YEAR. HENCE, THE ITA NO. 7777 / MUM/20 1 2 4 QUESTION THAT IS REQUIRED TO BE EXAMINED IS ABOUT THE VERACITY OF SUBMISSIONS MADE WITH REGARD TO RA - 3 BILL. SINCE THE SUBMISSIONS OF THE ASSESSEE HAVE NOT BEEN PROPERLY EXAMINED AND SINCE THE ASSESSEE IS FURNISHING ADDITIONAL EVIDENCES, IN THE INTEREST OF JUSTICE, WE ARE OF THE VIEW TH AT THIS ISSUE REQUIRES FRESH EXAMINATION. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND DIRECT THE AO EXAMINE THIS ISSUE AFRESH BY CONSIDERING ALL THE SUBMISSIONS AND EVIDENCES FURNISHED OR THAT MAY BE FURNISHED BY THE ASSESSEE. 7. IN THE RESU LT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 9TH SEPT, 2015. 9TH SEPT , 2015 S D SD ( AMARJIT SINGH ) ( B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 9TH SEPT , 2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCER NED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI