M/s. Stewarts & Lloyds of India Ltd., Kolkata V. DCIT, Circle-1, Kolkata, Kolkata

MA 84/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7242 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA [BEFORE SHRI J. SUDHAKAR REDDY, HONBLE AM & SHRI S.S. GODARA, HONBLE JM] M.A. NO. 82/KOL/2019 (A/O. ITA NO. 1169/KOL/2017) ASSESSMENT YEAR: 2007-08 M.A. NO. 83/KOL/2019 (A/O. ITA NO. 1171/KOL/2017) ASSESSMENT YEAR: 2008-09 M.A. NO. 84/KOL/2019 (A/O. ITA NO. 1172/KOL/2017) ASSESSMENT YEAR: 2009-10 M/S. STEWARTS & LLYODS OF INDIA LTD.............................................................................APPELLANT 41, CHOWRINGHEE ROAD KOLKATA 700 071 [PAN: AAECS 0445 G] VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLKATA...............RESPONDENT APPEARANCES BY: SHRI PANKAJ PARAKH, FCA, APPEARING ON BEHALF OF THE ASSESSEE. SHRI SANKAR HALDER JCIT (D/R) APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JUNE 21 ST , 2019 DATE OF PRONOUNCING THE ORDER : JULY 24 TH , 2019 ORDER PER J. SUDHAKAR REDDY, AM :- BY THESE MISCELLANEOUS APPLICATIONS, THE ASSESSEE SUBMITS THAT A MISTAKE APPARENT OF RECORD HAS CREPT INTO THE ORDER OF THE TRIBUNAL, AS THE ASSESSEE HAD TAKEN THE GROUND CHALLENGING THE FINDING OF THE LD. CIT(A) THAT THE NET PROFIT RATE HAS TO BE APPLIED ON THE ISSUE OF TAXABILITY OF RETENTION MONEY. IT WAS POINTED OUT THAT FOR THE ASSESSMENT YEAR 2007-08 IN I.T.A. NO. 1169/KOL/2017, GROUND NO. 3.2., WAS RAISED ON THIS ISSUE AND THAT THE SAME WAS NOT DISPOSED OFF. IT WAS FURTHER SUBMITTED THAT IN VIEW OF THE BINDING DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, IN THE CASE OF CIT VS. SIMPLEX CONCRETE PILES (INDIA) LTD. [1989] 179 ITR 8 (CAL.), THE ENTIRE RETENTION MONEY HAS TO BE EXCLUDED FROM INCOME AS THE SAME DID NOT ACCRUE TO THE ASSESSEE. IT WAS ARGUED THAT THE TRIBUNAL HAD ALLOWED THIS GROUND OF THE ASSESSEE AT PARA 6 OF THE ORDER AND AS A CONSEQUENCE A MISTAKE APPARENT ON RECORD HAS CREPT INTO PARA 7.2. OF THE ORDER. 2. THE LD. D/R, AGREED THAT A MISTAKE APPARENT ON RECORD HAS CREPT INTO THE ORDER OF THE TRIBUNAL. HE POINTED OUT THAT THERE WERE TWO APPEALS BY THE 2 M.A. NO. 82/KOL/2019 (A/O. ITA NO. 1169/KOL/2017) ASSESSMENT YEAR: 2007-08 M.A. NO. 83/KOL/2019 (A/O. ITA NO. 1171/KOL/2017) ASSESSMENT YEAR: 2008-09 M.A. NO. 84/KOL/2019 (A/O. ITA NO. 1172/KOL/2017) ASSESSMENT YEAR: 2009-10 M/S. STEWARTS & LLYODS OF INDIA LTD ASSESSEE FOR THE ASSESSMENT YEAR 2007-08. THE FIRST ONE WAS NUMBERED 1170/KOL/2017, WHICH IS AGAINST THE ORDER OF THE ASSESSING OFFICER PASSED U/S 263/143(3) OF THE ACT, AS CONFIRMED BY THE LD. CIT(A)-5, KOLKATA, VIDE ITS ORDER DT. 22/03/2017 AND THE SECOND APPEAL IN I.T.A. NO. 1169/KOL/2017, WHICH WAS AGAINST THE ORIGINAL ORDER OF THE ASSESSING OFFICER PASSED U/S 143(3) ON 24/12/2009, WHICH WAS ALSO ADJUDICATED BY THE LD. CIT(A) IN A COMMON ORDER PASSED ON 23/02/2017. HE SUBMITTED THAT THE IMPUGNED GROUND NO. 3.2. IN I.T.A. NO. 1169/KOL/2017, HAS NOT BEEN DISPOSED OFF AND HENCE THE SAME MAY BE RECALLED FOR THE LIMITED PURPOSE OF DISPOSING OFF THE SAME. 3. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS:- 4. THERE WERE TWO APPEALS FILED BY THE ASSESSEE FOR THE SAME ASSESSMENT YEAR 2007-08, WHICH WERE ARISING OUT OF SEPARATE PROCEEDINGS. A MISTAKE CREPT INTO THE ORDER OF THE TRIBUNAL AS THE GROUND NO. 3.2. IN I.T.A. NO. 1169/KOL/2017 WAS NOT DISPOSED OFF. THE ITAT HAS WRONGLY RECORDED THAT THE ASSESSEE HAS NOT CHALLENGED THIS ISSUE OF THE LD. CIT(A) ADOPTING THE NET PROFIT RATE ON THE RETENTION AMOUNT IN QUESTION AS INCOME, THOUGH THE ASSESSEE HAD TAKEN A SPECIFIC GROUND AGAINST THIS ISSUE. HENCE THIS MISTAKE WHICH IS APPARENT ON RECORD HAS TO BE RECTIFIED. 5. GROUND NO. 3 IN I.T.A. 1169/KOL/2017, ASSESSMENT YEAR 2007-08, READS AS FOLLOWS:- 3. ERRONEOUS REJECTION OF CLAIM FOR EXCLUSION OF RETENTION MONEY NOT ACCRUING DURING THE PREVIOUS YEAR 2006-07 [INR 3,36,70,167] 3.1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO AND SUBSEQUENTLY THE LD. CIT(A) ERRED IN NOT ALLOWING EXCLUSION OF ENTIRE RETENTION MONEY OF INR 3,36,70,167, WITHOUT APPRECIATING THAT SUCH AMOUNTS DID NOT ACCRUE TO THE APPELLANT DURING AY 2007 -08. 3 M.A. NO. 82/KOL/2019 (A/O. ITA NO. 1169/KOL/2017) ASSESSMENT YEAR: 2007-08 M.A. NO. 83/KOL/2019 (A/O. ITA NO. 1171/KOL/2017) ASSESSMENT YEAR: 2008-09 M.A. NO. 84/KOL/2019 (A/O. ITA NO. 1172/KOL/2017) ASSESSMENT YEAR: 2009-10 M/S. STEWARTS & LLYODS OF INDIA LTD 3.2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN RESTRICTING THE EXCLUSION OF THE RETENTION MONEY BASED ON A METHOD, NOT SUPPORTED BY LAW. 3.3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RETENTION OF MONEY WITHOUT APPRECIATING THE LAW LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN CASE OF CIT V. SIMPLEX CONCRETE PILES (INDIA) LIMITED (1989) 179 ITR 8 (CAL). 5.1. THE TRIBUNAL AT PARA 6 OF ITS ORDER HELD AS FOLLOWS:- 6. IN VIEW OF THE ABOVE DISCUSSION, WE UPHOLD THE CONTENTION OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO EXCLUDE THE RETENTION MONEY INCLUDED IN THE SALES. THIS RETENTION MONEY CAN BE BROUGHT TO TAX IN THE YEAR WHEN THE ASSESSEE RECEIVED THE SAME. ACCORDINGLY THIS GROUND OF THE ASSESSEE IS ALLOWED FOR ALL THE ASSESSMENT YEARS. 5.2. IN LIGHT OF THE ABOVE DECISION FOLLOWING THE BINDING JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SIMPLEX CONCRETE PILES (INDIA) LIMITED (1989) 179 ITR 8 (CAL) , THE ACT OF THE LD. CIT(A) IN RESTRICTING THE EXCLUSION OF THE RETENTION MONEY HAS TO BE HELD AS CONTRARY TO THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT. HENCE, WE ALLOW GROUND NOS. 3.1., 3.2. & 3.3. OF THE ASSESSEES APPEAL IN I.T.A. NO. 1169/KOL/2017. ACCORDINGLY, M.A. NO. 82/KOL/2019, IS HEREBY ALLOWED. PARA 7.2. OF THE ORDER OF THE ITAT IS HEREBY RECTIFIED AND SHALL HENCEFORTH BE READ AS UNDER:- IN VIEW OF THE BINDING JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SIMPLEX CONCRETE PILES (INDIA) PVT. LTD. (SUPRA), THE LD. CIT(A) WAS WRONG IN BRINGING TO TAX PART OF THE RETENTION MONEY IN QUESTION. HENCE THESE GROUNDS OF THE ASSESSEE ARE ALLOWED AND THE ADDITION ON ACCOUNT OF RETENTION MONEY IS HEREBY DELETED IN FULL. 6. COMING TO M.A. NOS. 83 & 84/KOL/2019, IT IS CLEAR THAT THERE IS NO MISTAKE APPARENT ON RECORD IN THE ORDERS OF THE TRIBUNAL IN I.T.A. NOS. 1171/KOL/2017 & 1172/KOL/2017. HENCE THE SAME ARE REJECTED. 4 M.A. NO. 82/KOL/2019 (A/O. ITA NO. 1169/KOL/2017) ASSESSMENT YEAR: 2007-08 M.A. NO. 83/KOL/2019 (A/O. ITA NO. 1171/KOL/2017) ASSESSMENT YEAR: 2008-09 M.A. NO. 84/KOL/2019 (A/O. ITA NO. 1172/KOL/2017) ASSESSMENT YEAR: 2009-10 M/S. STEWARTS & LLYODS OF INDIA LTD 7. IN THE RESULT, M.A. NO. 82/KOL/2019 IS ALLOWED & M.A. NOS. 83 & 84/KOL/2019 ARE DISMISSED. KOLKATA, THE 24 TH DAY OF JULY, 2019. SD/- SD/- [S.S. GODARA] [ J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24.07.2019 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/S. STEWARTS & LLYODS OF INDIA LTD 41, CHOWRINGHEE ROAD KOLKATA 700 071 2. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES