PETRON ENGINEERING CONSTRUCTION LIMITED ,MUMBAI V. D.C.I.T, CIRCLE 14(1)(1), MUMBAI FORMALLY KNOWN AS OFFICE D.C.I.T. 14(2)(2), MUMBAI , MUMBAI

ITA 934/MUM/2024

AI Insights

The case involves Petron Engineering Construction Limited, represented by its liquidator, challenging an order under section 154 of the Income Tax Act concerning the assessment year 2009-10. The dispute centered on the addition of Rs. 6,38,22,923 as works contract tax, which the AO initially added and the CIT(A) confirmed. The appellant argued that this amount had already been taxed in the assessment year 2010-11, and thus, should not be re-assessed. The ITAT, after reviewing the submissions and additional grounds of appeal presented during the hearing, decided to remand the matter back to the AO for a thorough verification and correct computation of the disallowance under section 43B.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314579 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: UODAL RAJ SINGH
• Assessee Lawyers: BHARAT KUMAR
• Keywords: Rectification of order
• Section: 143(3); 154; 43B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “C” Bench, Mumbai. Before Smt. Beena Pillai(JM) & Shri Omkareshwar Chidara(AM) ITA No. 934/MUM/2024 (Assessment Year : 2009-10) Petron Engineering Construction Limited CS Vineet K. Chaudhary, Liquidator, D-38, LGF(L/S) South Extension Part-II New Delhi-110 049. Vs. DCIT-14(2)(2) Mumbai. PAN : AACCP8775G Appellant Respondent Assessee by : Shri Bharat Kumar Revenue by : Shri Uodal Raj Singh Date of Hearing : 19/03/2025 Date of pronouncement : 06/05/2025 O R D E R Per Omkareshwar Chidara (AM) :- The present appeal for A.Y. 2009-10 is against the order under section 154 of the I.T. Act passed by Ld. AO which was confirmed by Ld. CIT(A). The addition made by Ld. AO relates to works contract tax. The Ld. AR of the appellant has filed additional ground of appeal also during the appeal proceedings before the ITAT. The main grounds of appeal against the order of Ld. CIT(A) under section 154 of the I.T. Act and the additional grounds of appeal filed by the Ld. AR of the appellant of this liquidator of this company are as follows :- 1. On the facts and circumstances of the case in law, The Ld. CIT (A) has erred in confirming stand of A.O. whereas Ld. A.O. invoked section 154 whereas there was no apparent mistake on records of assessment. 2. On the facts and circumstances of the case in law, The Ld. CIT (A) has erred in confirming stand of A.O. on debatable issue before him u/s 154 of the Act. 3. On the facts and circumstances of the case in law, The Ld. CIT (A) has erred in confirming addition of Rs.6,38,22,923/- on account of work contact Tax. Petron Engineering Construction Limited 2 4. The assessee craves leave to add, alter or amend the existing grounds of appeal on or before the date of hearing. 2. The Ld. AR of the appellant has filed an additional ground during the course of hearing before the ITAT as follows :- 1. On the facts and circumstances of the case in law, Ld. AO erred in levied double taxation of WTC claim which was already taxed in A.Y. 2010-11. 2. On the facts and circumstances of the case in law, Ld. AO erred in ignoring the facts that same income is already tax in A.Y. 2010-11 and it was noted in assessment order dated 1.3.2013. Further the same facts was ignored while passing rectification order on 31.3.2016. 2. As the appeal is against the order of Ld. AO under section 154 of the I.T. Act, it is observed from the order that the addition was made because the appellant company has revised the computation of income and claimed a sum of Rs. 6,38,22,923/- as deduction under section 43B of the Act being S.T. Paid during the year. As per appellant’s own admission, this sum was not debited to profit and loss account and reflected in books of account as loans and advances in the Balance-Sheet. As this is not a sum/liability to pay and also not accrued in the current previous year, the same cannot be allowed as deduction under section 43B of the Act, as claimed by the appellant company in the revised “Computation of Income”. Hence, the Ld. AO made the addition under section 154 of the I.T. Act. 3. The Ld. CIT(A) confirmed the addition made by the Ld. AO in the assessment stating that all the figures/information was available on record i.e., profit and loss account, books of account and computation of income etc. But, still originally the Ld. AO, did not disallow the amount of sales tax which was not debited to profit and loss account, but at the same time claimed as deduction under section 43B of the Act in the Revised Computation of Income and hence incorrect. Thus, Ld. CIT(A) held it as a Petron Engineering Construction Limited 3 mistake apparent from record and also on merit also, the addition made by Ld. AO was upheld. 4. Aggrieved by the orders of Ld. CIT(A), the appellant filed an appeal before ITAT. 5. The Ld. AR of appellant filed a paper book during the appeal proceedings which contains the assessment orders under section 143(3) passed for assessment years of earlier years, original computation of income, revised computation of income etc. From this paper book, and additional grounds of appeal, it is seen that, the Ld. AO already taxed all the disallowances under section 43B of the Act during the A.Y. 2010-11, which was not brought to the notice of Ld. AO/Ld. CIT(A). It was argued by Ld. AR of the appellant company that an addition of Rs. 3,37,94,573/- was already added by Ld. AO while completing the assessment of A.Y. 2010-11. After this addition, the Ld. AR of appellant claims that a balance of Rs. 15,82,186/- only is to be added under section 154 of the I.T. Act, which is the excess claim, as against the addition made by Ld. AO in various assessment years, claimed by appellant were given as a chart during the appeal proceedings which is reproduced below :- Assessment Year WCT / Sales Tax shown in profit and Loss Account which is added in computation WCT / Sales Tax Paid WCT / Sales as per I.T. Assessment Order Disallowed by Assessing Officer A.Y. 2000-2001 9,016,822 12,681,372 12,681,372 A.Y. 2001-2002 28,601,372 19,209,796 19,209,796 A.Y. 2002-2003 1,472,377 10,671,679 10,671,679 A.Y. 2003-2004 24,661,752 11,388,233 11,388,233 A.Y. 2004-2005 6,623,934 13,950,472 13,950,472 A.Y. 2005-2006 12,742,880 19,223,210 18,428,418 794,792 A.Y. 2006-2007 5,937,256 27,013,647 26,084,218 929,429 A.Y. 2007-2008 8,987,393 5,836,745 5,423,672 413,073 A.Y. 2008-2009 9,350,459 8,946,770 8,360,809 585,961 A.Y. 2009-2010 31,764,415 63,822,923 63,822,923 139,158,660 192,744,847 190,021,592 2,723,255 Petron Engineering Construction Limited 4 6. Finally, the Ld. AR of the appellant concludes that only an addition of Rs. 15,82,186/- is to be added. But, as mentioned above, all these facts and figures were not produced before the Ld. AO/Ld. CIT(A) when this impugned 154 order was passed. The Ld. AR submitted as all these facts are borne out of record and hence, it was requested to remand the matter to the Ld. AO for verification and correct computation. 7. After hearing both sides, it is decided the matter is remanded back to the file of Ld. AO for verification of these figures and correct disallowance to be made under section 43B of the Act. 8. The appeal is allowed for statistical purposes. Order pronounced in the open Court on 06/05/2025. Sd/- Sd/- (BEENA PILLAI) (OMKARESHWAR CHIDARA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 06/05/2025 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai PS "