ITO, New Delhi V. M/s Rupa Promoters P Ltd, New Delhi

MA 458/DEL/2010

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7511 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 20-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS Y KAKKAR
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER MISC. APPLICATION NO.458/DEL/2010 (IN I.T.A.NO.2060/DEL/2009) ASSESSMENT YEAR : 2006-07 INCOME-TAX OFFICER, M/S. RUPA PROMOTERS PVT. LTD ., WARD 15(4), NEW DELHI. VS. H-54, 2 ND FLOOR, DDA FLATS, ASHOK VIHAR-1, NEW DELHI. PAN: AADCR0877Q (APPLICANT) (RESPONDENT) APPLICANT BY : MRS. Y. KAKKAR, SR. DR. RESPONDENT BY : SHRI RA JIV SAXENA, ADVOCATE. O R D E R PER K.D. RANJAN, ACCOUNTANT MEMBER THE PRESENT MISCELLANEOUS APPLICATION BY THE REVENU E IS DIRECTED AGAINST ORDER OF ITAT, DELHI BENCH `F, NEW DELHI, DATED 18 TH DECEMBER, 2009. THE REVENUE IN MISC. APPLICATION HAS AGITATE D THAT THE TRIBUNAL HAS WRONGLY DECIDED THAT THE AMOUNT OF RS.50,00,000/- W AS NOT CLAIMED AS 2 DEDUCTION AND HENCE PROVISIONS OF SEC. 40(A)(IA) AR E NOT APPLICABLE. IN THE MISC. APPLICATION IT HAS ALSO BEEN STATED THAT THE ASSESSEE HAS SHOWN RS.50,00,000/- AS CURRENT LIABILITY IN THE BALANCE- SHEET. IN THE ABSENCE OF PRODUCTION OF BOOKS OF ACCOUNTS, IT COULD SAFELY BE ASSUMED THAT THE CORRESPONDING DEBIT ENTRY OF THE SAID AMOUNT WAS MA DE IN ASSESSEES EXPENSES. THEREFORE, THE DECISION OF ITAT THAT NO EXPENSES AGAINST THE SAID AMOUNT HAVE BEEN BOOKED BY THE ASSESSEE, IS NOT ACC EPTABLE TO THE ASSESSING OFFICER. IT HAS FURTHER BEEN SUBMITTED THAT FROM T HE EVIDENCE ON RECORD, IT IS CLEAR THAT M/S. PGF LTD. HAD GRANTED WORK TO THE AS SESSEE. AS THE ASSESSEE HAD FURTHER SUB-CONTRACTED A PART OF THAT WORK TO M /S. RISHIKESH PROPERTIES PVT. LTD., THEREFORE, LIABILITY TO DEDUCT TAX AT SO URCE ARISES. ACCORDINGLY PROVISION OF SEC. 40(A)(IA) ARE CLEARLY ATTRACTED. THE AO HAS THEREFORE, REQUESTED FOR RE-EXAMINATION OF ISSUE. 2. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSE E STRONGLY OBJECTED TO THE MISC. APPLICATION. HE SUBMITTED THAT THE ASSES SEE HAD NOT CLAIMED AMOUNT OF RS.50,00,000/- AS EXPENSE. IT IS BALANCE -SHEET ITEM. SINCE NO DEDUCTION HAS BEEN CLAIMED IN RESPECT OF RS.50,00,0 00/-, PROVISIONS OF SEC. 40(A)(IA) ARE NOT APPLICABLE. IT HAS ALSO BEEN SUB MITTED THAT THE AMOUNT OF RS.50,00,000/- HAS BEEN ASSESSED IN THE CASE OF M/ S. RISHIKESH PROPERTIES PVT. LTD. HE FILED COPY OF DECISION OF HONBLE DEL HI HIGH COURT WHEREIN 3 THE APPEAL FILED BY THE REVENUE HAS BEEN ADMITTED. HE, THEREFORE, SUBMITTED THAT SINCE THE ASSESSEE HAD NOT CLAIMED DEDUCTION O F RS.50,00,000/-, PROVISIONS OF SEC. 40(A)(IA) ARE NOT APPLICABLE AND ANY MODIFICATION OF THE ORDER WOULD AMOUNT TO THE REVIEW OF THE EARLIER ORD ER. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDER OF TRIBUNAL CAREFULLY. ITAT IN ORDER DATED 18.12.2009 HAS EXAM INED THE ISSUE IN DETAIL AND HAD COME TO THE CONCLUSION THAT THE TOTAL WORK CARRIED OUT BY THE ASSESSEE WAS OF RS.4,85,00,000/- AND THE PAYMENT OF RS.50,00,000/- DID NOT RELATE TO THE TOTAL CONTRACT VALUE OF RS.4,85,00,00 0/-. THE ASSESSEE CLAIMED EXPENSES AGAINST RECEIPTS DECLARED AT RS.4,85,00,00 0/- ONLY. THEREFORE, RS.50,00,000/- DID NOT FORM PART OF TOTAL RECEIPTS DECLARED BY THE ASSESSEE. IT HAS FURTHER BEEN OBSERVED THAT TOTAL CONTRACT VALUE ASSIGNED BY M/S. PGF LTD. TO THE ASSESSEE AMOUNTED TO RS.4,85,00,000/- W HILE A SEPARATE CONTRACT WAS MADE WITH M/S. RISHIKESH PROPERTIES BY M/S. PGF LTD. ONLY AMOUNTING TO RS.4,25,00,000/-, WHICH WAS ALSO RUNNING ALMOST AT THE SAME TIME AND WITH THE SAME MANAGEMENT AS DIRECTORS WHO ARE WORKI NG ON BEHALF OF BOTH THE COMPANIES ARE COMMON. IT IS ONLY DUE TO SOME C ONFUSION, CHEQUES HAVE BEEN ISSUED IN THE NAME OF THE ASSESSEE COMPANY BY M/S. PGF LTD. INSTEAD OF ISSUING IN THE NAME OF RISHIKESH PROPERTIES LTD. BELONGING TO THE SAME MANAGEMENT. DUE TO THIS RESPONDENT ASSESSEE HAS NO T DECLARED THE RECEIPT AS 4 INCOME AND PAID THE AMOUNT TO M/S. RISHIKESH PROPER TIES, WHICH WAS NOT CLAIMED AS EXPENDITURE. IT HAS BEEN FOUND THAT RS. 50,00,000/- PAID BY THE RESPONDENT ASSESSEE WAS FORMING PART OF RS.4,25,00, 000/- AND NOT LINKED WITH RS.4,85,00,000/- DECLARED BY THE RESPONDENT AS SESSEE. SINCE IT IS NEITHER FORMING PART OF THE RECEIPTS IN THE PROFIT AND LOSS ACCOUNT NOR FORMING PART OF AN EXPENDITURE CLAIMED BY IT, PROVISIONS OF SEC. 40(A)(IA) AND SEC. 194C ARE NOT ATTRACTED. 4. SINCE THE TRIBUNAL HAS RECORDED A CLEAR CUT FIND ING THAT RS.50,00,000/- WAS NOT CLAIMED AS EXPENDITURE AND THEREFORE, PROVI SIONS OF SEC. 40(A)(IA) ARE NOT APPLICABLE. THE AO IN MISC. APPLICATION HAS AS SUMED THAT IN THE ABSENCE OF BOOKS OF ACCOUNTS, IT COULD SAFELY BE AS SUMED THAT CORRESPONDING DEBIT ENTRY OF THE SAID AMOUNT OF RS.50,00,000/- WA S MADE IN ASSESSEES EXPENSES. THE AO HAS NOT DISPUTED THAT RS.50,00,00 0/- HAS BEEN SHOWN AS CURRENT LIABILITY. THE TRIBUNAL AFTER EXAMINING TH E MATTER IN DETAIL HAS COME TO THE FINDING THAT EXPENDITURE WAS NOT CLAIMED. T HEREFORE, THERE IS NO QUESTION OF ASSUMPTION THAT A DEBIT ENTRY MIGHT HAV E BEEN MADE BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS AND, THEREFORE, P ROVISIONS OF SEC. 40(A)(IA) WOULD BE ATTRACTED. WE ARE NOT IN AGREEMENT WITH T HE CONTENTION OF THE ASSESSING OFFICER. 5 5. SINCE THERE IS NO MISTAKE APPARENT FROM RECORD, THE MISC. APPLICATION FILED BY THE REVENUE DESERVES TO BE DISMISSED. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE MISC. APPLICATION FILED BY TH E REVENUE IS DISMISSED. 7. PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2012. SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH JANUARY, 2012. COPY OF THE ORDER FORWARDED TO:- 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.