RAJENDRA SINGH SHEKHAWAT, Jaipur V. ITO, Jaipur

MA 48/JPR/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6624 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: S S GOGRA
• Keywords: Additional evidence

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM MA NO. 48/JP/2018 (ARISING OUT OF ITA NO. 300/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 SHRI RAJENDRA SINGH SHEKHAWAT 97-A GOYAL FARM, SUNDER VIHAR, KALWAR ROAD, JHOTWARA, JAIPUR. CUKE VS. THE ITO, WARD- 3(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AWCPS 9261 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.S. GOGRA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/04/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 14/05/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. BY WAY OF THIS MISCELLANEOUS APPLICATION THE ASSES SEE IS SEEKING RECALLING OF ORDER DATED 28.02.2018 OF THIS TRIBUNA L. 2. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT WH ILE DECIDING THE GROUND NO. 1 REGARDING THE ADDITION OF RS. 24,96,55 7/- ON ACCOUNT OF DIFFERENCE IN RECEIPT AS PER FORM 26AS AND BOOKS OF ACCOUNTS OF THE ASSESSEE THE TRIBUNAL HAS NOT CONSIDERED THE FACT T HAT THE ASSESSEE HAS MA NO. 48/JP/2018 SHRI RAJENDRA SINGH SHEKHAWAT VS. ITO 2 NOT CLAIMED ANY EXPENDITURE ON ACCOUNT OF SALES TAX WHICH WAS DEDUCTED BY THE PAYERS BEFORE MAKING THE PAYMENT TO THE ASSESSEE. THEREFORE, THE ASSESSEE HAD DULY RECONCILED THE DIF FERENCE OF RECEIPT AS PER 26AS AS WELL AS IN THE BOOKS OF ACCOUNTS. THE D IFFERENT WAS DUE TO REASON THAT THE PAYMENT WAS RECEIVED BY THE ASSESSE E AFTER DEDUCTION OF SALES TAX AS WELL AS THE INTEREST EXPENSES CHARG ED BY THE PAYERS ON ACCOUNT OF ADVANCE PAYMENT MADE TO THE ASSESSEE. TH EREFORE THE TOTAL DIFFERENCE OF RS. 16,52,664/- WAS ON ACCOUNT OF SAL ES TAX AND INTEREST EXPENSES DEDUCTED FROM THE RECEIPT. THE LD. AR HAS FURTHER SUBMITTED THAT THE ASSESSEE WAS PAID ONLY RS. 4,96,519/- VIDE CHEQUE DATED 01.11.2008 AND THEREFORE, THE ASSESSEE EXPLAINED TH E DIFFERENCE OF RS. 20,00,038/- OUT OF THE TOTAL AMOUNT OF RS. 24,96,55 7/-. THE LD. AR HAS REFERRED THE EXPENDITURE TO THE PROFIT AND LOSS ACC OUNT AT PAGE 74 OF THE PAPER BOOK AS WELL AS THE CONFIRMATION OF THE P AYER SHRI BHAWANI NIKETAN SHIKSHA SAMITI, JAIPUR THAT ONLY A SUM OF R S. 4,96,519/- WAS PAID TO THE ASSESSEE AFTER DEDUCTING A TOTAL AMOUNT OF RS. 20,00,038/-. THUS THE LD. AR HAS SUBMITTED THAT ALL THESE FACTS WERE NOT TAKEN INTO CONSIDERATION BY THE TRIBUNAL THAT THE EXPENSES ON ACCOUNT OF SALES TAX AND INTEREST EXPENSES ON ACCOUNT OF ADVANCE PAYMENT S CHARGED BY SHRI BHAWANI NIKETAN SHIKSHA SAMITI, JAIPUR TOTAL AMOUNT ING TO RS. MA NO. 48/JP/2018 SHRI RAJENDRA SINGH SHEKHAWAT VS. ITO 3 16,52,664/- WERE NOT CLAIMED BY THE ASSESSEE IN THE P & L ACCOUNT AND ONLY THE NET INCOME WAS SHOWN THEREFORE, MAKING THE ADDITION OF THE GROSS AMOUNT AGAIN IS NOT JUSTIFIED AND CONTRARY TO THE FACTS. HENCE, THE LD. AR HAS SUBMITTED THAT THERE IS A MISTAKE IN THE IMPUGNED WHICH REQUIRES RECTIFICATION. 3. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT TH E TRIBUNAL HAS DECIDED THE ISSUE ON MERITS AND THEREFORE, THERE IS NO APPARENT MISTAKE ON RECORD WHICH CANNOT BE RECTIFIED U/S 254(2) OF T HE ACT. HE HAS VEHEMENTLY OBJECTED TO THE MISCELLANEOUS APPLICATIO N OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD THE TRIBUNAL WHILE DECIDING THE ISSUE HAS ACCEPTED THE FINDING OF THE LD. CIT(A) THAT ALL THE EXPENSES ON ACCOUNT OF DIRECT PURCHASES, SALES TAX DEDUCTION AND INTEREST HAVE AL READY BEEN TAKEN INTO CONSIDERATION WHILE PREPARING THE P & L ACCOUN T. THE RELEVANT FINDING OF THE TRIBUNAL IN PARA 5 OF THE IMPUGNED O RDER AS UNDER:- 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD IT IS NOTED THAT THE ASSESSEE HA S SHOWN THE CONTRACT RECEIPTS OF RS. 5,19,09,588/- WHEREAS AS PER FORM 26AS THE CONTRACT RECEIPTS APPEARING AT RS.5,44,06,145/- WHEN THIS DISCREPANCY OF RS. 24,96,557/- OF CONTRACT RECEIPT WAS POINTED OUT BY THE AO, THE ASSESSEE EXPLAINED THAT THE CORR ESPONDING EXPENSES HAS NOT BEEN CLAIMED BY THE ASSESSEE AND T HEREFORE, MA NO. 48/JP/2018 SHRI RAJENDRA SINGH SHEKHAWAT VS. ITO 4 ONLY THE NET PROFIT ON THESE DIFFERENTIAL AMOUNT OF CONTRACT RECEIPTS CAN BE ADDED TO THE INCOME OF THE ASSESSEE . BEFORE THE LD. CIT(A) THE ASSESSEE EXPLAINED THAT THE DIFFEREN CE OF RS. 24,96,557/- IS DUE TO BOOK ADJUSTMENT ENTRY MADE BY THE DEDUCTEE. THE RELEVANT PART OF THE SUBMISSIONS OF T HE ASSESSEE IN PARA 3.1 AS UNDER:- 3.1 SUBMISSIONS MADE BY THE APPELLANT 1. THAT THE APPELLANT IS A WORKS CONTRACTOR AND HAS UNDERTAKEN THE CIVIL CONSTRUCTION WORK OF BUILDING OF SHRI BHA WANI NIKETAN SIKHSHA SAMITI, JAIPUR. DURING THE SAID YEAR THE AP PELLANT HAS CARRIED OUT WORK OF 5,44,06,145/- WHICH IS SHOWN IN FORM 26AS WHEREAS TDS CERTIFICATE DT. 22.09.2009 AS ISSUED BY AWARDER GROSS AMOUNT OF PAYMENT WAS SHOWN FOR RS. 5,4.19,09 ,588/-, COPY OF SAID CERTIFICATE WAS SUBMITTED TO LD AO DUR ING ASSESSMENT PROCEEDINGS. THUS A DIFFERENCE OF RS. 24,96,557/- W AS ARISEN WHICH IS ON ACCOUNT OF BOOK ADJUSTMENT OF FOLLOWING EXPENSES & DEDUCTIONS MADE BY AWARDER:- (A) SALES TAX (WCT) DEDUCTED BY AWARDER 8,15,095. 00 (B) INTEREST EXPENSES CHARGES BY AWARDER 8,37,569 .00 (C) DIRECT PURCHASE OF MATERIAL BY AWARDER 8,43,8 93.00 (ON ACCOUNT OF CONTRACTOR ASSESSEE) ----------- TOTAL 24,96,557/- THE ASSESSEE ALSO FILED ADDITIONAL EVIDENCE IN SUPP ORT OF THE CONTENTION WHICH WERE FORWARDED TO THE AO FOR THE REMAND REPOR T. AFTER CONSIDERING THE REMAND REPORT THE LD. CIT(A) ADJUDI CATED THE ISSUE IN PARAS (X) TO (XV) AS UNDER:- (X) I HAVE DULY CONSIDERED THE ABOVE CONTENTION OF THE APPELLANT. NOW THE APPELLANT CHANGED ITS STAND. DURING ASSESSM ENT MA NO. 48/JP/2018 SHRI RAJENDRA SINGH SHEKHAWAT VS. ITO 5 PROCEEDING, IT WAS SUBMITTED BEFORE AO THAT IT IS B OOKING ITS EXPENSES ON RECEIPT OF THE PAYMENTS AND IT OFFERED TO INCLUDE 4.61 % OF RS. 24,96,557/- AS ITS INCOME. WHEREAS, N OW THE APPELLATE HAS PROVIDED THE COMPLETE BREAK-UP OF RS. 24,96,577/-. IT IS DIFFICULT TO UNDERSTAND HOW THE APPELLANT CAN HAVE DIFFERENT STANDS ESPECIALLY LOOKING TO THE FACT THAT IT IS MA INTAINING ITS BOOKS OF ACCOUNTS WHICH WERE AUDITED BY AN AUDITOR. (XI) IT IS NOTED FROM THE COPY OF CONSTRUCTION EXPENSES DIRECT PAYMENT TO SUPPLIERS' LEDGER ACCOUNT FILED BY THE APPELLANT ALONG WITH TH E APPEAL THAT TOTAL EXPENSES OF RS. 92,77,652/- WERE DEBITED INTO SAID ACCOUNT WHICH INCLUDES AMOUNT OF RS. 4,24,000/ - AND RS. 4,16,000/- DEBITED ON 01.10.2008 AND 3.11.2008 RESP ECTIVELY AND THIS EXPENDITURE OF RS. 92,77,652/- IS A PART O F TOTAL PURCHASE OF RS. 2,96,16,898/- OF THE APPELLANT DEBI TED TO ITS PROFIT AND LOSS ACCOUNT. IT IS PERTINENT TO MENTION HERE THAT THESE PAYMENTS WERE CLAIMED TO BE MADE BY THE AWARD ER TO THE SUPPLIER I.E. M/S BINANI CEMENT. THIS MEANS THAT TH E APPELLANT HAS ALREADY CLAIMED THE EXPENDITURE ON ACCOUNT OF D IRECT PURCHASE OF THE MATERIAL AMOUNTING TO RS. 8,40,000/ - (4,24,000 + 4,16,000) IN ITS BOOKS OF ACCOUNTS AND WAS TRYING TO MISLEAD THE APPELLATE AUTHORITY BY STATING THAT IT HAS NOT CLAIMED THE EXPENSES ON ACCOUNT OF DIRECT PURCHASE BY THE AWARD ER I.E. SHRI BHAWANI NIKETAN SHIKSHA SAMITI. (XII) IT IS INTERESTING TO NOTE FROM THE COPY OF LE DGER ACCOUNT OF WORKS CONTRACTS RECEIPT FILED BY THE APPELLATE WITH ITS APPEAL THAT IT HAS SHOWN TOTAL RECEIPTS AT RS. 5,44,06,345/-. AS T HE APPELLANT IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, IT SHOUL D HAVE TAKEN THE AMOUNT OF RS. 5,44,06,345/- ON THE BASIS OF ITS BOOKS OF ACCOUNTS WHEREAS IT HAS TAKEN THE CONTRACT RECEIPTS AT RS. 5,19,09,557/- IN ITS AUDITED PROFIT AND LOSS ACCOUN T. (XIII) IT IS FURTHER NOTED FROM SALES TAX (WCT) A/ C LEDGER ACCOUNT FILED BY THE APPELLANT WITH ITS APPEAL THAT A SUM OF RS. 8,15,095/- WAS MA NO. 48/JP/2018 SHRI RAJENDRA SINGH SHEKHAWAT VS. ITO 6 DEBITED IN THIS ACCOUNT. SIMILARLY INTEREST EXP. LEDGER ACCOUNT SHOWS DEBIT AMOUNT OF RS. 8,37,569/-. IF THESE EXPE NSES ARE APPEARING IN ITS BOOKS OF ACCOUNTS, IT COULD BE PRE SUMED SAFELY THAT THESE MUST HAVE BEEN TAKEN INTO ACCOUNT, THOUG H HEAD WISE NOT APPEARING IN THE PROFIT AND LOSS ACCOUNT, WHILE PREPARING ITS PROFIT AND LOSS ACCOUNT LOOKING TO THE FACT THAT AU DITORS HAVE MADE NO QUALIFICATION IN THIS REGARD WHILE AUDITING THE FINANCIAL STATEMENTS. (XIV) IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD T HAT THE VERSION OF THE APPELLANT BEFORE THE APPELLATE AUTHORITY CANNOT BE ACCEPTED ESPECIALLY LOOKING TO THE CHANGE OF STAND BY THE AP PELLANT AT THE ASSESSMENT AND APPELLATE PROCEEDINGS AND AS THE APP ELLANT HAS NOT COME WITH CLEAN HANDS BEFORE THE APPELLATE AUTH ORITY. (XV) HENCE, LOOKING TO THE TOTALITY OF FACTS AND CI RCUMSTANCES OF THE CASE, IT IS HELD THAT THE AO WAS JUSTIFIED IN MAKIN G ADDITION OF RS. 24,96,557/- AS UNDISCLOSED CONTRACT RECEIPTS AN D THUS THE SAME IS SUSTAINED. HENCE, THESE GROUNDS OF APPEAL A RE HEREBY REJECTED. THUS, IT IS CLEAR THAT THE LD. CIT(A) HAS ANALYZED THE RELEVANT RECORD AND FOUND THAT THE CLAIM OF THE ASSESSEE IS NOT CORRECT AS ALL THESE EXPENSES ON ACCOUNT OF DIRECT PURCHASE AN D SALES TAX DEDUCTION AND INTEREST HAVE ALREADY BEEN TAKEN UNDE R CONSIDERATION WHILE PREPARING THE PROFIT AND LOSS A CCOUNT. THEREFORE, ONCE THE CLAIM OF THE ASSESSEE THAT THE DIFFERENCE IS ON ACCOUNT OF BOOKS ADJUSTMENT ENTRY IS FOUND TO BE WRONG AND CONTRARY OF THE FACTS THEN THE ADDITION MADE BY THE AO OF THE DIFFERENTIAL AMOUNT IS PROPER AND JUSTIFIED. IT IS FURTHER NOTED THAT WHEN THE ASSESSEE HAS BOOKED ALL THE CORRESPONDING EXPENSES IN THE BOOKS OF ACCOUNTS THEN, EVEN THE CONTENTION OF THE ASSESSEE THAT ONLY NET PROFIT OF THESE CONTRACT RECEIPT CAN BE ADDED TO THE INCOME OF THE ASSESSEE IS NOT ACCEPTABLE. HENCE, IN VIEW OF THE MA NO. 48/JP/2018 SHRI RAJENDRA SINGH SHEKHAWAT VS. ITO 7 FACTS AND CIRCUMSTANCES OF THE CASE AND FACTUAL FIN DING GIVEN BY THE LD. CIT(A) I DO NOT FIND ANY MERIT OR SUBSTANCE IN THE PRESENT APPEAL OF THE ASSESSEE. THUS, IT IS CLEAR THAT THE TRIBUNAL HAS ACCEPTED TH E FINDING OF THE LD. CIT(A) THAT ASSESSEE HAS CONSIDERED THE SALES TAX D EDUCTION AND INTEREST WHILE PREPARING P&L ACCOUNT. THE LD. AR OF THE ASSESSEE HAS NOW POINTED OUT THAT THE ASSESSEE HAS NOT CLAIMED T HESE EXPENSES IN THE P & L ACCOUNT. THEREFORE, WE FIND THAT THE FACT UAL ASPECT OF THE MATTER HAS ESCAPED CONSIDERATION OF THE TRIBUNAL WH ILE PASSING THE IMPUGNED ORDER. IT IS PURELY A MATTER OF FACT WHETH ER THE ASSESSEE HAS CLAIMED THE EXPENSES ON ACCOUNT OF SALES TAX DEDUCT ION AND INTEREST WHICH WERE DEDUCTED BY THE PAYERS FROM THE CONTRACT RECEIPT IN THE P& L ACCOUNT OR NOT. THEREFORE, THIS FACTUAL ASPECT RE QUIRES PROPER VERIFICATION OF RECORD AND FACTS BEFORE ADJUDICATIN G THE ISSUE OF ADDITION ON ACCOUNT OF DISCREPANCY IN THE RECEIPT SHOWN IN T HE 26AS AND BOOKS OF THE ASSESSEE. HENCE, IN THE FACTS AND CIRCUMSTAN CES OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT THE CRUCIAL FACTS W HICH ARE RELEVANT FOR PROPER ADJUDICATION OF THE ISSUE HAVE NOT BEEN CONS IDERED AND THEREFORE, A MISTAKE HAS CREPT IN THE IMPUGNED ORDE R OF THE TRIBUNAL WHICH IS REQUIRED TO BE RECTIFIED. ACCORDINGLY, WE RECALL THE IMPUGNED ORDER OF THE TRIBUNAL FOR FRESH HEARING AND ADJUDIC ATION OF THE MATTER. MA NO. 48/JP/2018 SHRI RAJENDRA SINGH SHEKHAWAT VS. ITO 8 THE REGISTRY IS DIRECTED TO FIX THE APPEAL OF THE A SSESSEE FOR FRESH HEARING AND ADJUDICATION IN REGULAR COURSE. THE PAR TIES TO BE INFORMED ABOUT THE NEXT DATE OF HEARING. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/05/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14/05/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAJENDRA SINGH SHEKHAWAT, JAIP UR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD- 3(1),JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {M.A. NO. 48/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR