M/s. Usha Hydro Dynamics Ltd., New Delhi V. DCIT, New Delhi

ITA 781/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59055 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 01-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 08-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR

Judgement Text

ITA 781/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H NEW DELHI BEFORE SHRI A.N. PAHUJA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.781/DEL/2011 ASSESSMENT YEAR : 2007-08 USHA HYDRO DYNAMICS LTD., VS DY. COMMISSIONE R OF INCOME TAX, ROOM NO. 107, 1 ST FLOOR, CIRCLE 18 (1), PRATAP BHAWAN, NEW DELHI. 5, BAHADURSHAH ZAFAR MARG, NEW DELHI. (PAN AAACU0002H) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWANI KUMAR RESPONDENT BY : DR. B.R.R. KUMAR, S R.DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS) [ (HEREINAFTER REFERRED TO AS CIT(A)], NEW DELHI DATED 15.12.2010, UPHOLDIN G THE ORDER OF DCIT, CIRCLE-2(1), NEW DELHI DATED 12.8.2009 PERTAINING T O ASSTT. YEAR 2007-08, WHEREBY THE LD. AO MADE AN ADDITION OF RS.7,41,357 TOWARDS SERVICE TAX RECOVERABLE ON THE BASIS OF DISCLOSURE MADE IN THE TAX AUDIT REPORT. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE LD. AO, RELYING ON THE TAX AUDIT REPORT, FOUND THAT IN SCHEDULE 5 OF THE B ALANCE SHEET OF THE ITA 781/DEL/2011 2 ASSESSEE, IT HAS BEEN MENTIONED UNDER THE HEAD LOAN S AND ADVANCES THAT SERVICE TAX RECOVERABLE IS OF RS. 8,97,023/- WHEREA S IN FORM NO. 3CD, IT IS MENTIONED IN POINT 13(B) THAT TWO REFUNDS OF SERVIC E TAX TOTALING RS. 16,38,380/- WERE FILED BEFORE THE AUTHORITY AND THE AMOUNT WILL BE CREDITED IN THE BOOKS ON RECEIPT OF THE SAME. LD. AO HAS FU RTHER TAKEN THE VIEW THAT THE ASSESSEE HAS SHOWN LESS VALUE OF RS. 7,41,357/- UNDER THE HEAD LOANS AND ADVANCES. THEREFORE, THIS AMOUNT WAS DISALLOWE D AND ADDED BACK TO THE INCOME OF THE ASSESSEE. BESIDES OTHER SEVERAL G ROUNDS, THE ASSESSEE FILED AN APPEAL BEFORE LD. CIT(A). DEALING WITH GROUND NO . 3, PERTAINING TO SERVICE TAX ISSUE, THE APPELLATE AUTHORITY HELD THAT THE AO HAS NOTICED THAT THERE IS A DIFFERENCE OF RS.7,41,357/- WHICH HE ADDED BACK AS INCOME IN THE HANDS OF ASSESSEE COMPANY RELYING ON THE TAX AUDIT REPORT AN D DISMISSED THIS GROUND BY IMPUGNED ORDER DATED 15.12.2010. HENCE, THIS AP PEAL BY THE ASSESSEE. 3. WE HAVE PERUSED THE ORDER OF LD. CIT(A) AND ENTI RE RECORD PLACED BEFORE US AND IN THE LIGHT OF RIVAL ARGUMENTS ADVAN CED BY BOTH THE PARTIES, WE FOUND THAT LD. CIT(A) NOTICED THAT THE LD. ASSIS TANT COMMISSIONER OF SERVICE TAX, FARIDABAD REJECTED THE REFUND CLAIM OF THE ASSESSEE VIDE ORDER DATED 30.8.2006. THE COMMISSIONER (APPEALS) CENTRA L EXCISE DELHI-I HAS ALLOWED THE REFUND CLAIMED VIDE ORDER DATED 30.3.20 07. HE ALSO OBSERVED THAT SUBSEQUENTLY, AN APPEAL WAS PREFERRED BY THE R EVENUE BEFORE CESAT ITA 781/DEL/2011 3 TRIBUNAL AND THE TRIBUNAL, VIDE ITS ORDER DATED 20. 5.2009, HAS REMANDED THE MATTER TO THE LD. ADJUDICATING AUTHORITY FOR EXAMIN ATION OF THE ISSUE. 4. LD. DR APPEARING FOR THE REVENUE DID NOT DISPUTE THE FACT THAT THERE IS NO REFUND ORDER IN FAVOUR OF ASSESSEE AND THE REFUN D REQUEST IS STILL PENDING UNDECIDED WITH THE ADJUDICATING AUTHORITY I.E. LD. ASSISTANT COMMISSIONER OF SERVICE TAX, FARIDABAD. 5. IN VIEW OF ABOVE, WE FIND THAT THERE IS NO REFUN D OF SERVICE TAX OF RS.7,41,357/- IN THE HANDS OF ASSESSEE AND HIS PRAY ER FOR REFUND IS STILL PENDING WITH THE SERVICE TAX DEPARTMENT AS PER THE ORDER OF CESAT TRIBUNAL DATED 20.5.2009. THAT TAX AUDIT REPORT DI SCLOSED THE FACT THAT THE REFUND OF SERVICE TAX IS FILED WITH THE DEPARTMENT AND THE AMOUNT WILL BE CREDITED IN THE BOOKS ON RECEIPT BASIS. IN VIEW OF ABOVE, THE IMPUGNED ORDER OF LD. CIT(A), CONFIRMING THE ADDITION MADE BY THE AO, IS NOT JUSTIFIED AS THE ENTIRE RECORD DO NOT REVEAL ANY FACT PERTAINING TO THE REFUND TO THE ASSESSEE. THEREFORE, THIS AMOUNT CANNOT BE TREATED AS INCOME IN THE HANDS OF THE ASSESSEE. THEREFORE, THE ADDITION MADE IS NOT JUST AND PROPER IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. ON THE BASIS OF ABOVE DISCUSSION, WE FURTHER HOL D THAT UNTIL AND UNLESS THIS AMOUNT IS REFUNDED TO THE ASSESSEE, AN AMOUNT OF RS. 7,41,357/- CANNOT BE TREATED AS INCOME CHARGEABLE TO TAX UNDER THE AC T. THEREFORE, WE HOLD ITA 781/DEL/2011 4 THAT THE IMPUGNED ORDER IS NOT SUSTAINABLE AND THE ORDER OF LD. CIT(A) IS SET ASIDE AND THIS APPEAL DESERVES TO BE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH, 2012. SD/- SD/- (A.N. PAHUJA) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 30TH MARCH, 2012 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR