ITO, Namakkal V. Shri K.V.Ramasamy, Namakkal

MA 121/CHNY/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8904 (ITAT-CHENNAI)
• Duration Of Justice: 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 31-07-2012
• Court: TRIBUNAL
• Keywords: Business income; Audit objection; Tax effect; Reason to believe
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER .. M.P. NO. 121/MDS/2012 (IN I.T.A. NO. 1638/MDS/2011) ASSESSMENT YEAR : 2006-07 THE INCOME TAX OFFICER, WARD I(2), NAMAKKAL. (PETITIONER) V. SHRI K.V. RAMASAMY, NO.2/17, KARANGALPUDUR, PAPPINAICKENPATTY, NAMAKKAL. PAN : ACFPR6253H (RESPONDENT) PETITIONER BY : SHRI M.N. MURTHY NAIK, JCIT RESPONDENT BY : NONE DATE OF HEARING : 24.08.2012 DATE OF PRONOUNCEMENT: 24.08.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS MISCELLANEOUS PETITION FILED BY THE REVENU E, ITS GRIEVANCE IS THAT THIS TRIBUNAL HAD DISMISSED ITS A PPEAL FOR A REASON THAT THE TAX EFFECT WAS BELOW THE LIMIT OF ` 2 LAKHS FIXED BY CBDTS INSTRUCTION NO.2 OF 2005 DATED 24.10.2005. NOW, IN THIS PETITION IT IS SUBMITTED BY THE REVENUE THAT THE SOLE REASON WHY T HE APPEAL WAS FILED BEFORE THE TRIBUNAL WAS THAT THERE WAS A REVE NUE AUDIT OBJECTION, M.P. NO. 121/MDS/12 2 WHICH WAS ACCEPTED BY THE DEPARTMENT, RESULTING IN THE IMPUGNED RE- ASSESSMENT. 2. WE HAVE HEARD THE LEARNED COUNSEL. A READING OF THE ASSESSMENT ORDER FOR THE IMPUGNED ASSESSMENT YEAR, WOULD SHOW THAT THE REASON FOR REOPENING WAS AS UNDER:- ON A PERUSAL OF THE RECORDS IT IS REVEALED THAT THE GROSS CONTRACT RECEIPTS OF THE ASSESSEE AS PER TDS CERTIF ICATE WAS ` 40,04,890/- WHEREAS THE ASSESSEE OFFERED ONLY ` 36,56,646 IN THE P & L ACCOUNT, OMITTING THE WITHHELD AMOUNT OF ` 3,48,244/-. IT IS SEEN FROM THE TDS CERTIFICATE THAT THE ACTUAL AMOUNT WITHHELD WAS ` 46,427/- COMPRISING THE FOLLOWING ITEMS. THUS THE WITHHELD AMOUNT FOR ANY REASON IS NOT AN ADMISSIBLE DEDUCTION FROM BUSINESS INCOME. SIMILAR LY THE AMOUNT WITHHELD IS NOT ` 3,48,244/- AND IT IS ONLY ` 46,427/-. THEREFORE, AS THERE IS A REASON TO BELIEVE THAT THE INCOME ASSESSABLE TO INCOME TAX HAS ESCAPED ASSESSMENT WIT HIN THE MEANING OF SEC. 147 OF THE I.T. ACT, 1961 AFTER RE CORDING THE REASONS A NOTICE U/S. 148 DATED 11.08.2008 OF THE I.T. ACT WAS ISSUED TO THE ASSESSEE. THIS NOTICE WAS DULY SERVE D UPON THE ASSESSEE. IN RESPONSE TO THIS NOTICE THE ASSESSEE FILED A LETTER GROSS AMOUNT OF CONTRACT RECEIPTS ` 40,04,890 LESS: WITHHELD AMOUNT ` 46,427 TNWF ` . 12, 015 INCOME - TAX ` . 80,098 SUR - CHARGE ` 8,010 EDUCATION CESS ` 2,422 FINE ` 500 ` 1,49,472 ` 1,49,472 NET AMOUNT OF CONTRACT ` 38,55,418 M.P. NO. 121/MDS/12 3 RECEIVED IN THIS OFFICE ON 02.04.2009. IN THIS LET TER THE ASSESSEE RE-PRODUCED THE DETAILS OF INCOME EARNED D URING THE ASSESSMENT YEAR AND ALSO THE DETAILS OF TDS AND WIT HHELD AMOUNT. THE ASSESSEE FURTHER STATED THAT THE RETUR N FILED ON 22.03.2007 MAY KINDLY BE TREATED AS THE RETURN FILE D IN COMPLIANCE OF THE NOTICE U/S. 148. HOWEVER, A NOTI CE U/S. 143(2) DATED 01.04.2009 WAS ISSUED TO THE ASSESSEE. IN RE SPONSE TO THIS NOTICE, THE ASSESSEES AUTHORIZED REPRESENTATI VE SHRI N.R.K. MARIMUTHU, ITP PRESENT. CASE DISCUSSED. DURING TH E COURSE OF DISCUSSION THE REPRESENTATIVE STATED THAT DURING TH E FINANCIAL YEAR 2004-05 ALSO A SUM OF ` 1,02,548/- HAS BEEN TREATED AS WITHHELD AMOUNT. IN SUPPORT OF THIS CLAIM THE REPR ESENTATIVE PRODUCED FORM 16A. A PERUSAL OF THE FORM 16A REVEA LED THAT THERE IS NO DEDUCTION SHOWN AS WITHHELD AMOUNT OF ` 1,02,548/-. FOR THE ASSESSMENT YEAR 2006-07 THE GROSS CONTRACT RECEIPTS AS PER THE TDS CERTIFICATE IS ` 40,04,890/- WHEREAS THE ASSESSEE HAS OFFERED ONLY ` 36,56,646 AS STATED ABOVE. HERE I MAY HIGHLIGHT THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. HENCE THE CONCEPT OF ACCRUABLE BASIS I S WRONG. THEREFORE, THERE IS A DIFFERENCE OF ` 3,48,244/- AND THIS HAS TO BE ADDED TO THE INCOME OF THE ASSESSEE. 3. CIT(APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE PARTLY FOR A REASON THAT ASSESSING OFFICER HAD IGNORED THAT THE SUM ADDED INCLUDED AN AMOUNT OF ` 3,48,234/- WHICH WAS RETENTION MONEY. NOWHERE CAN WE SEE A PLEADING TAKEN BY THE REVENUE THAT THE REOPENING FOR IMPUGNED ASSESSMENT YEAR WAS MADE ON ACCOUNT OF A REVENUE AUDIT OBJECTION. SUCH A GROUND WAS NEVER T AKEN BY THE REVENUE IN ITS APPEAL BEFORE THIS TRIBUNAL, NOR WAS ANY SUBMISSIONS MADE ON THESE LINES. NO RECORDS WERE ALSO PRODUCED IN SUPPORT. WE M.P. NO. 121/MDS/12 4 ARE, THEREFORE, OF THE OPINION THAT THERE IS NO MER IT IN THE MISCELLANEOUS PETITION NOW FILED BY THE REVENUE. 4. IN THE RESULT, MISCELLANEOUS PETITION FILED BY T HE REVENUE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON FRIDAY, TH E 24 TH AUGUST, 2012. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 24 TH AUGUST, 2012. KRI. COPY TO: (1) PETITIONER (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE