Emkay Hindustan Infrastructure, Mangaluru V. The Deputy Commissioner of Income Tax, Central Circle - 2, Mangaluru

MA 181/BANG/2023

AI Insights

Emkay Hindustan Infrastructure filed Miscellaneous Applications seeking rectification of the Tribunal's earlier order, which had not addressed a specific ground concerning the disallowance of income and expenditure by the Assessing Officer. The Tribunal had previously recorded the ground but failed to adjudicate it. The main issue revolved around the AO's action of estimating income at 8% on contract receipts from the Creek Galaxy Project, which the assessee had already accounted for in their books. The Tribunal found that this could lead to double taxation and remitted the issue back to the AO to verify the accounts and ensure no double addition is made.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130021 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-08-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 05-07-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V. PARITHIVEL
• Section: 153C

Judgement Text

MP Nos.177 to 181/Bang/2023 Emkay Hindustan Infrastructure, Mangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER MP Nos.177 to 181/Bang/2023 (Arising out of ITA Nos.979 to 983/Bang/2022) Assessment Years: 2014-15 to 2018-19 Emkay Hindustan Infrastructure D.No.20-1-19/5, Ground Floor Behar Complex, Azizuddin Road Bunder Mangaluru PAN NO : AAEFE5746K Vs. DCIT Central Circle-2 Mangalore APPELLANT RESPONDENT Appellant by : Smt. Sheetal Borkar, A.R. Respondent by : Shri V. Parithivel, D.R. Date of Hearing : 25.08.2023 Date of Pronouncement : 29.08.2023 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: By these Miscellaneous Applications, assessee seeks rectification of order of the Tribunal in ITA Nos.979 to 983/Bang/2022 dated 16.6.2023. 2. The ld. A.R. submitted that assessee raised common ground No.2 in all these appeals, only change in figures in each assessment years, which reads as follows: In ITA No.979/Bang/2022: 2. The ld. CIT(A)-2, Panaji is not justified in law in upholding the Assessing Officer’s action of out-rightly disallowing both the income as well as expenditure by grossly rejecting the Audited Profit and Loss Account without giving any valid reason for the same and thereby recomputing the profit at Rs.2,20,142 and adopted the total income of Rs.43,20,142 on adhoc basis by exparte order under section 144, though audited accounts and details called for have been furnished during the course of assessment proceedings.” MP Nos.177 to 181/Bang/2023 Emkay Hindustan Infrastructure, Mangalore Page 2 of 4 2.1 She submitted that though this ground was argued by the assessee’s counsel, the Tribunal failed to adjudicate the same. Hence, she requested that the order of the Tribunal may be recalled on this issue and adjudicate the same. 2.2 The ld. D.R. submitted that this ground is of general nature, which need not be adjudicated. 3. We have heard the rival submissions and perused the materials available on record. Admittedly, assessee raised ground No.2 in all these appeals as above, only change in figures in each assessment year. However, the Tribunal though recorded these grounds in its order, failed to adjudicate this ground in all these appeals. Hence, there was a mistake on the part of the Tribunal in not adjudicating this ground, though argued by the assessee’s counsel. It is incumbent upon the Tribunal to rectify the error crept in the order of the Tribunal, which is a mistake apparent on record. Accordingly, we accede to the argument of the ld. A.R. and adjudicate this ground as follows. 4. Facts of this ground are that in these assessment years, assessee accounted the contract receipts in respect of Creek Galaxy Project received through banking channels as follows: 2014-15 2015-16 2016-17 2017-18 2018-19 27,51,769 3,83,62,250 3,20,99,253 2,11,47,376 1,48,25,791 4.1 The assessee declared income from this accounted turnover as follows: 2014-15 2015-16 2016-17 2017-18 2018-19 80,697 6,36,835 6,41,297 33,945 0 4.2 The AO estimated the income from the accounted receipts at 8% as follows: 2014-15 2015-16 2016-17 2017-18 2018-19 2,20,142 30,68,980 25,67,940 16,91,790 11,86,063 MP Nos.177 to 181/Bang/2023 Emkay Hindustan Infrastructure, Mangalore Page 3 of 4 4.4 Now the contention of the ld. A.R. is that assessee has already accounted the contract receipts received through banking channels in its books of accounts, if once again estimating the income at 8% received through banking channels amounts to double taxation, which shall be avoided. She submitted that the contract receipts accounted in the books of accounts and the contract receipts considered by the ld. AO for estimation of income is as follows: Assessment year Contract receipt as disclosed in audited account (which includes VAT and service) Contract receipt as per assessment order Difference 2014-15 27,51,769 27,51,769 -- 2015-16 3,84,73,832 3,83,62,250 -1,11,582 2016-17 3,21,74,456 3,20,99,253 -75,203 2017-18 2,12,10,151 2,11,47,376 -62,775 2018-19 1,48,91,191 1,48,25,791 -65,400 4.5 The ld. A.R. submitted that the addition is to be deleted on this count. 5. The ld. D.R. relied on the order of the lower authorities. 6. We have heard the rival submissions and perused the materials available on record. Admittedly, the assessee has accounted the contract receipts from Creek Galaxy Project received through banking channels in its books of accounts. However, the AO after considering the profit declared by the assessee in its return filed u/s 153C of the Income-tax Act,1961 ['the Act' for short], once again made addition at 8% of the contract receipts received through banking channels in respect of Creek Galaxy Project. 6.1 We have gone through the quantum of accounted contract receipts considered by ld. AO and also declared by the assessee in its books of accounts. There is also difference between these two turnovers as mentioned earlier. The excess of contract receipts received through banking channels over the accounted contract MP Nos.177 to 181/Bang/2023 Emkay Hindustan Infrastructure, Mangalore Page 4 of 4 receipts to be considered as additional income, subject to verification of the same by ld. AO. Hence, we remit this issue to the file of ld. AO to examine the books of accounts and after satisfying the fact that assessee has accounted the Creek Galaxy Project receipts received through banking channels and if there is difference, then only he should make addition on this count and there cannot be double addition, one in the form of accepting the amount declared by the assessee in its return filed u/s 153C of the Act which is included as income from contract receipts accounted for in respect of Creek Galaxy Project received through banking channels and another by way estimation at 8% in respect of same accounted contract receipts. Accordingly, the issue is remitted to the file of ld. AO for fresh consideration. 7. The appeals in ITA Nos.979 to 983/Bang/2022 for the AYs 2014-15 to 2018-19 are partly allowed for statistical purposes. 8. In the result, the Miscellaneous Applications in MA Nos.177 to 181/Bang/2023 filed by the assessee are allowed. Order pronounced in the open court on 29 th Aug, 2023 Sd/- (Beena Pillai) Judicial Member Sd/- (Chandra Poojari) Accountant Member Bangalore, Dated 29 th Aug, 2023. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(Judicial) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore