ITO, New Delhi V. M/s. Logistic Buildtech P. Ltd., New Delhi

ITA 848/DEL/2015

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6226 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 12-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A T
• Keywords: Assessment record; TDS; Set aside
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DLEHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 848/DEL/2015 ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, VS. LOGISTIC BUILDTECH P. LT D., WARD 15(3), NEW DELHI. 17B, MGF HOUSE, ASAF ALI ROAD, NEW DELHI. PAN : AABCL2921M (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VIPUL KASHYAP, SR. DR RESPONDENT BY: SH. SATYEN SETHI, ADVOCATE & SH. A.T. PANDA, ADVOCATE DATE OF HEARING: 13/09/2021 DATE OF ORDER : 13/09/2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 18.12.2014 PASSED BY T HE COMMISSIONER OF INCOME TAX (APPEALS)-V, NEW DELHI ( 'LD. CIT(A)') IN THE CASES OF LOGISTIC BUILDTECH P. LTD. (THE ASSESSEE ) FOR THE ASSESSMENT YEAR 2007-08, REVENUE PREFERRED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION OF COMMERCIAL COMPL EX AND ACTS AS A BUILDERS, COLONIZERS ETC. FOR THE ASSESSMENT YEAR 2 007-08, THEY HAVE FILED RETURN OF INCOME ON 27.03.2009 DECLARING LOSS OF RS .10,327/-. 2 SUBSEQUENTLY, THE ASSESSEE CLAIMED REFUND OF RS.1,9 3,07,796/- ON ACCOUNT OF TDS DEDUCTED BY VARIOUS PARTIES. ON VERI FICATION OF RECORD, IT WAS FOUND THAT THE ASSESSEE DID NOT DECLARE ANY COR RESPONDING RECEIPTS AGAINST THIS AMOUNT OF TDS CREDIT AND, THEREFORE, T HE LD. ASSESSING OFFICER CALCULATED SUCH RECEIPTS TO BE AT RS.86,04,18,771/- BY REVERSE WORKING OF TDS BY 2.44%. UNDER SECTION 44AD, LEARNED ASSESSING OFFICER WORKED OUT THE NET PROFIT AT RS.6,88,33,501/- AT 8% OF THE TOT AL RECEIPTS. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT( A). IT WAS CONTENDED BEFORE THE LD. CIT(A) THAT THERE WAS A PR OPOSAL TO ENTER INTO THE CONTRACTS WITH VARIOUS COMPANIES FOR EXECUTION OF CONTRACT WORKS, BUT SUBSEQUENTLY, SUCH PROPOSAL WAS DROPPED, BUT UN DER MISTAKEN IMPRESSION, TDS WAS DEDUCTED BY VARIOUS PARTIES AND CREDITED TO THE ACCOUNT OF THE ASSESSEE, WHICH THE ASSESSEE SOUGHT REFUND OF TO REPAY THE PARTIES. LEARNED CIT(A) BELIEVED THE CONTENTION OF THE ASSESSEE ON EXAMINATION OF RECORD AND DELETED THE ADDITION. HEN CE, THIS APPEAL BY THE REVENUE. 4. IT IS CONTENDED ON BEHALF OF THE REVENUE THAT LE ARNED ASSESSING OFFICER CATEGORICALLY FOUND, AS A MATTER OF FACT, T HAT THE PREMISES OF THE ASSESSEE AS WELL AS THE 36 DEDUCTORS OF TDS ARE LOC ATED IN THE SAME ADDRESS, I.E., MGF HOUSE, ASAF ALI ROAD, NEW DELHI AND THEREFORE, THE PARTIES WOULD BE KNOWING THE STATE OF AFFAIRS WITHO UT LEAVING ANY SCOPE FOR MISTAKEN DEDUCTION OF TDS TO THE CREDIT OF THE ASSESSEE. IT IS FURTHER SUBMITTED BY THE LD. DR THAT NO PIECE OF PAPER, LET ALONE THE ORIGINAL CONTRACT OR CANCELLATION THEREOF, IS FILED TO JUSTI FY THE CLAIM OF THE ASSESSEE. FURTHER, WHEN NO ADVANCE PAYMENT WAS MADE NOR ANY WORK WAS EXECUTED BY THE ASSESSEE, THE OCCASION TO DEDUC T THE TDS DOES NOT 3 ARISE. ACCORDING TO THE LD. DR, CERTAIN UNDER HAND PAYMENTS HAVE CHANGED HANDS BETWEEN THE PARTIES AND THEREFORE, TH E LD. ASSESSING OFFICER IS JUSTIFIED IN MAKING THE ADDITION. LASTLY , LD. DR SUBMITTED THAT EXPENSES BOOKED BY THE PAYERS IN THE SHAPE OF TDS M UST HAVE GONE BACK TO THEM BY ESCAPING THE TAX. HE, THEREFORE, PRAYED TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND TO RESTORE THE ASSESSMENT ORD ER. 5. IT IS CONTENDED BY THE LD. AR THAT EVEN UNDER ME RCANTILE SYSTEM OF ACCOUNTING, INCOME ACCRUES WHEN THERE IS A RIGHT TO RECEIVE INCOME AND INASMUCH AS THERE IS NO INCOME ACCRUED TILL THE RIG HT IS VESTED IN FAVOUR OF THE PERSON, NO INCOME COULD BE BROUGHT TO TAX IN TH E HANDS OF THE ASSESSEE. HE FURTHER SUBMITTED THAT THE TDS OF RS.1 ,93,07,796/- WAS REFUNDED WITH INTEREST BY THE INCOME-TAX DEPARTMENT AND THE SAME WAS REFUNDED TO THE VARIOUS PARTIES WHO EFFECTED TDS AN D THEREFORE, NO INCOME ACCRUED TO THE ASSESSEE. HE FURTHER CONTENDE D THAT SINCE THE DEPARTMENT HAD REFUNDED THE AMOUNT WITH INTEREST BY ACCEPTING THE STAND OF THE ASSESSEE THAT NO INCOME HAS ACCRUED TO THE ASSESSEE, NOW THE DEPARTMENT CANNOT TURN AROUND TO CONTEND ANYTHI NG CONTRARY. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF SUBMISSIONS MADE ON EITHER SIDE. IT IS AN ADMITTED FACT THAT THE ASS ESSEE CLAIMED REFUND OF RS.1,93,07,796/- AND THE SAME WAS REFUNDED BY THE D EPARTMENT WITH INTEREST. IN SO FAR AS THE REAL INCOME IS CONCERNED , LD. ASSESSING OFFICER ONLY SUSPECTS THAT CERTAIN UNDER HAND DEALINGS MUST HAVE TAKEN PLACE BETWEEN THE PARTIES. IN VIEW OF THE UNDISPUTED FACT THAT ALL THE 36 ENTITIES WHICH EFFECTED THE TDS ARE ALSO LOCATED IN THE ADDRESS OF THE ASSESSEE, THE CHANCES OF ERROR ARE LESS AND THAT TO O A SIMILAR MISTAKE COMMITTED BY AS MANY AS 36 PEOPLE, NATURALLY LENDS SUPPORT TO THE 4 SUSPICION. LEARNED ASSESSING OFFICER, HOWEVER, DOE S NOT SEEM TO HAVE CONDUCTED ANY ENQUIRY AS TO WHETHER REALLY EITHER T HE ASSESSEE OR THE DEDUCTORS WERE BENEFITED BY THIS TRANSACTION. LD. A SSESSING OFFICER COULD HAVE VERIFIED ASSESSMENT RECORDS OF THE DEDUCTORS T O KNOW WHETHER SUCH ENTITIES STOOD TO GAIN BY SHOWING THIS EXPENSE IN T HEIR BOOKS WITHOUT REALLY AVAILING ANY SERVICES FROM THE ASSESSEE. IN THE ABSENCE OF ANY SUCH EXERCISE, MERE SUSPICION DOES NOT TAKE THE ASSESSIN G OFFICER ANYWHERE TO MAKE THE ADDITION. 7. IMPUGNED ORDER CLEARLY REVEALS THAT DURING THE F INANCIAL YEARS 2006-07 AND 2007-08, THE BOOKS OF ACCOUNT OF THE AS SESSEE CLEARLY SHOW THAT NO AMOUNT HAD FLOWN FROM 36 ENTITIES TO THE AS SESSEE NOR THE ASSESSEE ENTERED INTO ANY CONTRACT NOR EXECUTED ANY CONTRACT DURING SUCH PERIOD. LD. CIT(A) FURTHER PERUSED THE CONFIRMATION S FILED BY THE PARTIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND RET URNED A FINDING THAT CONTRACT BETWEEN THE ASSESSEE AND THE PARTIES COULD NOT BE EXECUTED DUE TO UNFORESEEN CIRCUMSTANCES AND THE PARTIES HAV E ALSO FILED THE DETAILS OF TDS DEPOSITED BY THEM IN THE PAN OF THE ASSESSEE. 8. LEARNED CIT(A) FURTHER PERUSED THE FORMS 16A ISS UED BY VARIOUS PARTIES AND NOTED THAT THE ASSESSEE DID NOT RECEIVE ANY AMOUNT THEREUNDER AND SUCH AN OBSERVATION OF THE LD. CIT(A ) IS CORROBORATED BY THE BANK ACCOUNT STATEMENT OF THE ASSESSEE. 9. IN ALL THESE CIRCUMSTANCES, WE ARE OF THE CONSID ERED OPINION THAT EXCEPT SUSPICION OF THE LD. ASSESSING OFFICER, THER E IS NO MATERIAL, WHATSOEVER, AT THE COMMAND OF THE LD. ASSESSING OFF ICER TO FASTEN ANY TAX LIABILITY ON THE ASSESSEE. LEARNED CIT(A) ON APPRAI SAL OF ALL THE MATERIAL AVAILABLE ON RECORD REACHED A RIGHT CONCLUSION WHIC H DOES NOT NEED ANY 5 INTERFERENCE. WE, ACCORDINGLY, DECLINE TO INTERFERE WITH THE IMPUGNED ORDER. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 13 TH DAY OF SEPTEMBER, 2021. SD/- SD/- ( N.K. BILLAIYA) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13/09/2021 AKS