M/s Daulatram Engineering Services Pvt. Ltd., Bhopal v. The ACIT, 1(1), Bhopal

CO 40/IND/2011 | 2002-2003
Pronouncement Date: 29-11-2011 | Result: Dismissed

Appeal Details

RSA Number 4022723 RSA 2011
Assessee PAN AABCD3596Q
Bench Indore
Appeal Number CO 40/IND/2011
Duration Of Justice 3 month(s) 20 day(s)
Appellant M/s Daulatram Engineering Services Pvt. Ltd., Bhopal
Respondent The ACIT, 1(1), Bhopal
Appeal Type Cross Objection
Pronouncement Date 29-11-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 29-11-2011
Assessment Year 2002-2003
Appeal Filed On 08-08-2011
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NOS.150 151/IND/2011 A.YS. 2002-03 & 2003-04 ACIT-1(1) BHOPAL ... APPELLANT VS M/S. DAULATRAM ENGINEERING SERVICES P. LTD. BHOPAL PAN AABCD 3596 Q ... RESPONDENT AND CROSS-OBJECTION NOS.40 & 41/IND/2011 (ARISING OUT OF ITA NOS.150 & 151/IND/2011) AYS: 2002-03 & 2003-04 M/S. DAULATRAM ENGINEERING SERVICES P. LTD. BHOPAL PAN AABCD 3596 Q OBJECTOR VS. ACIT-1(1) BHOPAL RESPONDENT REVENUE BY : SHRI ARUN DEWAN SR. DR ASSESSEE BY : SHRI P.N. DIXIT ADVOCATE 2 DATE OF HEARING : 29.11.2011 DATE OF PRONOUNCEMENT : 29.11.2011 O R D E R PER JOGINDER SINGH THESE APPEALS ARE BY THE REVENUE AND CROSS-OBJECTI ONS BY THE ASSESSEE CHALLENGING THE COMMON ORDER OF LEA RNED COMMISSIONER OF INCOME TAX (APPEALS)-I BHOPAL DAT ED 15.3.2011. 2. DURING HEARING OF THESE APPEALS THE LD. SR. DR ADVANCED HIS ARGUMENTS WHICH HIS IDENTICAL TO THE GROUNDS RA ISED BY SUPPORTING THE ASSESSMENT ORDER. ON THE OTHER HAND LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDE R. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. SINCE THE ISSUE INV OLVED IS IDENTICAL IN BOTH THESE APPEALS THESE CAN BE DISP OSED OF BY THIS COMMON AND CONSOLIDATE ORDER. IN THE APPEALS O F THE REVENUE THE COMMON GROUND RAISED IS THAT ON THE FA CTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. FIRST APPELL ATE AUTHORITY 3 ERRED IN DELETING THE ADDITIONS OF RS.31 31 532/- & RS.7 53 082/- RESPECTIVELY MADE ON ACCOUNT OF DIF FERENCE IN GROSS RECEIPT OF RS.1 94 33 751/- & RS.1 29 41 668/ - RESPECTIVELY SHOWN BY THE ASSESSEE AGAINST THE AL LEGED ACTUALLY AMOUNT RECEIVED TO THE TUNE OF RS.2 25 65 283/- & RS.1 37 47 590/- RESPECTIVELY AND FURTHER ERRED I N GIVING DIRECTION U/S 251(1)(C) OF THE ACT TO ALLOW THE CLA IM OF TDS TO THE ASSESSEE IN VIEW OF THE PROVISIONS OF SECTION 155(14) OF THE ACT INSTEAD OF ALLOWING CLAIM OF TDS U/S 199(2) OF THE ACT. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPA NY GETS ORDERS FROM INDIAN RAILWAYS FOR REPAIRING AND RECON DITIONING OF GOODS AND THE PAYMENTS ARE MADE TO IT IN PART. WE F IND THAT NOTICE U/S 148 DATED 25.3.2009 WAS ISSUED AND THE A SSESSMENT WAS REOPENED ON THE GROUND THAT THE INCOME OF RS.31 31 532/- ESCAPED ASSESSMENT AND SUBSEQUENTLY AN ORDER U/S 143(3)/147 WAS PASSED TAXING THE AMOUNT OF RS.32 32 335/-. IDENTICALLY FOR ASSESSMENT YEAR 2003-04 IT WAS NO TICED BY THE LD. ASSESSING OFFICER THAT THE GROSS RECEIPT WERE A MOUNTING TO RS.1 37 47 590/- AS PER TDS CERTIFICATE FILED BY T HE ASSESSEE 4 WHEREAS THE ASSESSEE SHOWED GROSS PROFIT OF RS.1 2 9 41 668/- THEREFORE THE ASSESSING OFFICER TREATED THE GROS S PROFIT OF RS.8 05 922/- AS INCOME WHICH ESCAPED ASSESSMENT. T HE IMPUGNED ADDITIONS WERE CARRIED IN APPEALS BEFORE T HE LD. CIT(A) WHEREIN THE ASSESSING OFFICER WAS DIRECTED T O SUBMIT THE FACTUAL REPORT THAT TOO ON VERIFICATION OF RE CORDS OF THE ASSESSEE. THE REMAND REPORT SUBMITTED BY THE ASSESS EE ON 13.8.2010 WAS AS UNDER: ' AT THE VERY OUTSET IT IS ADMITTED THAT IN AY 2002 -03 THE AO SHOULD HAVE MADE THE ADDITION OF RS.3131532/- DUE T O DIFFERENCE IN AMOUNTS OF RECEIPTS MENTIONED IN TDS CERTIFICATE AND AMOUNT OF RECEIPTS SHOWN IN THE PROFIT & LOSS ACCOUNT INSTEAD OF RS.3232335/-. SUBMISSION MADE BY THE ASSESSEE SEEMS TO BE PARTI ALLY ACCEPTABLE AND A D DITIONS OF RS.3232335/- MADE FOR AY 2002-03 AND OF RS.805922/- FOR AY 2003-04 VIDE ORDER U/S 14 3(3) R.W.S. 147 OF THE IT ACT 1961 WERE NOT WARRANTED FULLY. R EASONS FOR THAT IS THE ASSESSEE FOLLOWED MERCANTILE SYSTEM OF ACCOUNTING AND ACCOUNTED THE CONTRACT RECEIPTS AS AND WHEN BILLS WERE RAISED BY HIM PERIOD FALLING IN ONE ASSESSMENT YEAR WHEREAS P AYEE DEDUCTED TDS AT THE TIME OF PAYMENT PERIOD OF WHICH FALLING IN ANOTHER ASSESSMENT YEAR. HOWEVER ASSESSEE HAS FAIL ED TO EXPLAIN THAT WHY AMOUNT OF RS.55840/- IN AY 2003-04 AND RS. 155819/- IN AY 2002-03 WAS NOT SHOWN IN THE PROFIT & LOSS ACCOUNT WHEREAS AS PER TDS CERTIFICATE SUCH AMOUNT WAS PAID TO HIM. THEREFORE IT IS PRAYED THAT ADDITION OF RS.55840/- IN AY 2003-04 AND RS.155819/- IN AY 2002-03 MAY BE CONFIRMED. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE IT WAS FOUND THAT THE AMOUNT MENTIONED IN GIVEN BELOW TABL E WERE PERTAINING TO DIFFERENT AY'S BUT CLAIM OF TDS WAS M ADE BY THE ASSESSEE AND ALLOWED BY THE THEN AO IN AY 2002-03 A ND 2003- 04 WHICH WAS IN CONTRAVENTION OF PROVISION U/S 199 OF THE IT ACT 5 1961. THEREFORE IT IS REQUESTED THAT KINDLY PASS T HE ORDER DIRECTING THE AO TO RECTIFY THE MISTAKES AS PER SEC TION 199 IN THE INTEREST OF REVENUE AS PER THE PROVISIONS OF SECTIO N 251 (L)(C) OF THE IT ACT 1961. 5. ON APPRECIATION OF FACTS AND THE REMAND REPORT S UBMITTED BY THE LD. ASSESSING OFFICER THE ASSESSEE SUBMITTE D AS UNDER: 'IN THIS CONNECTION THE APPELLANT MAY SUBMIT THAT WHEN A POINT OR ISSUE IS REMANDED BACK TO ' BY THE APPELLATE AUTHORITY AND T HE REMANDED/ ASSESSING OFFICER WAS OF THE OPINION THAT THE CONTENTIONS OF THE APPELLANT WERE NOT VERIFIABLE OR AN ADVERSE VIEW IS TO BE TAKEN NATUR AL JUSTICE DEMANDED THE ASSESSING/ REMANDED OFFICE TO GIVE AN OPPORTUNITY T O THE APPELLANT BEFORE ARRIVING AT HIS ADVERSE CONCLUSION WHICH THE REMAN DED/ ASSESSING OFFICER NOT DO HAD HE GIVEN SUCH A OPPORTUNITY TO THE APPEL LANT HIS ATTENTION COULD HAVE BEEN DRAWN OR INVITED TO THE ANNEXURE-I OF THE APPELLANT'S WRITTEN SUBMISSIONS DATED 89.9.2009 MADE DURING THE ASSESSM ENT PROCEEDINGS BEFORE THE ASSESSING OFFICER WITH. REGARD TO THE SUM OF RS.52 840/- (NOT RS. S.NO F.Y. A.Y. GROSS RECEIPTS 1 2001-2002 2002-2003 655545 2 2000-2001 2001-2002 348678 3 1999-2000 2000-2001 76879 4 1998-1999 1999-2000 88010 TOTAL 1169112 S.NO F.Y. A.Y. GROSS RECEIPTS 1 1998-1999 2000-2001 74850 2 2000-2001 2001-2002 177910+356499+ 1054944+2092068+ 232452+255300 TOTAL 7244023 6 55 840/- AS PER THE HANDWRITTEN MANSCRIPT AS WRONG LY AND BLINDLY ADOPTED BY THE ASSESSING OFFICER) AS CLEARLY MENTIONED IN T HE TYPED ANNEXURE-I IN QUESTION ACCORDING TO WHICH THE APPELLANT/ ASSESSEE HAD SPECIFICALLY DISOWNED THE ALLEGED RECEIPT OF RS.52 840/- STOOD M ENTIONED IN THE TDS CERTIFICATE. IT WAS CLEARLY AND SPECIFICALLY MENTIO NED IN THE ANNEXURE-I THAT THE SUM IN QUESTION OF RS.52 840/- WAS NOT RECEIVED FROM THE RAILWAYS AND THAT THE SAID FIGURE WAS IRRELEVANT. MOREOVER NO T DS WAS ALSO MADE FROM THE ABOVE ALLEGED PAYMENT OF RS.52 840/- AS PER TDS CERTIFICATE IN QUESTION BY THE RAILWAYS. NATURALLY THERE WAS NO QUESTION O F SHOWING THE SUM OF RS.52 840/- IN THE P & L ACCOUNT AS ADVERSELY COMMENTED BY THE ASSESSING OFFICER. WHEN THE ASSESSEE/ APPELLANT HAD CLEARLY AND SPECIFICALLY DISOWNED THE RECEIPT OF THE SUM IN QUESTION OF RS.5 2 840/-AND NO TDS TOO WAS MADE THE ONUS WAS ON THE ASSESSING OFFICER TO BRING ON THE RECORDS SUPPORTING DOCUMENTARY EVIDENCE TO PROVE THE ASSESS EE/ APPELLANT HAD ACTUALLY RECEIVED THE SAME WHICH TOO THE ASSESSING OFFICER HAS NOT DONE. SINCE THE APPELLANT HAD NOT RECEIVED THE SUM IN QUE STION OF RS.52 840/- (AND NO TDS TOO WAS MADE THERE FROM) AS CONFIRMED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS ITSELF THERE WAS NO QUESTION OF ITS INCLUSION IN THE P & L ACCOUNT. SINCE THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORDS ANY DOCUMENTARY EVIDENCE TO CONTROVERT THE DISOWNING OF THE AMOUNT IN QUESTION BY THE APPELLAN T THERE IS NO QUESTION OF ANY ADDITION ON THIS COUNT NOR CAN THE ADDITION TO THAT EXTENT BE SUSTAINED IN APPEAL. AS REGARDS THE SUM OF RS.1 55 819/- TOO THE AO HAS NOT TAKEN PAINS TO GO THROUGH THE RECONCILIATION CHART AT PAG E NO.10 APPENDED TO THE WRITTEN SUBMISSIONS DATED 8.9.09 MADE BEFORE THE AS SESSING OFFICER DURING ASSESSMENT PROCEEDINGS. HAD HE GIVEN AN OPPORTUNITY TO THE APPELLANT BEFORE JUMPING INTO ARBITRARY AND UNFOUNDED CONCLUSIONS TO THE DETERMENT OF THE APPELLANT HIS ATTENTION COULD HAVE BEEN DRAWN TO T HE ABOVE DETAILS SUBMITTED BY THE APPELLANT DURING THE ASSESSMENT PR OCEEDINGS ACCORDING TO WHICH AS AGAINST THE GROSS RECEIPTS OF RS.2 25 65 2 83/- AS PER TDS CERTIFICATES THE APPELLANT HAD DISCLOSED GROSS REC EIPTS OF RS.2 27 21 102/- MAKING A DIFFERENCE OF RS.1 55 819/- REPRESENTING S MALL AMOUNTS ON WHICH NO TDS WERE MADE. WHEN THE APPELLANT HAD DISCLOSED GROSS RECEIPTS OF RS.2 27 21 102/- AS AGAINST THE GROSS RECEIPTS AS P ER THE TDS CERTIFICATE OF RS.2 25 65 283/- HOW CAN THE AO SAY THAT THE DIFFER ENCE BETWEEN TWO FIGURES OF RS.1 55 819/- WERE NOT DISCLOSED IN THE P & L ACCOUNT. THIS ONLY GOES TO SHOW THAT THE PRESENT ASSESSING OFFICER TOO HAS JUMPED INTO UNCALLED FOR ADVERSE CONCLUSIONS WITHOUT CONSIDERIN G THE RELEVANT FACTS AND FIGURES PER THE DETAILED WRITTEN SUBMISSIONS MADE B Y THE APPELLANT BEFORE THE A. 0. DURING THE ASSESSMENT PROCEEDINGS. SINCE THE APPELLANT HAD ACTUALLY DISCLOSED THE SUM IN QUESTION OF RS.1 55 819/- FOR TAXATION THE ADVERSE CONCLUSION OF THE ASSESSING OFFICER THAT THE SAID SUM WAS NOT DISCLOSED IN THE P & L ACCOUNTS IS FACTUALLY INCORRECT AND FURTHER NOT SUPPORTED BY ANY DOCUMENT ARY EVIDENCES ON RECORDS TO THE CONTRARY. THE ADDITION IN QUESTION O R ITS SUSTENANCE TO THE EXTENT IN APPEAL CANNOT THEREFORE SURVIVE. ' 7 6. THE LD. CIT(A) CONSIDERED THE REMAND REPORT OF T HE ASSESSING OFFICER AS WELL AS THE SUBMISSION OF THE ASSESSEE AND HELD AS UNDER: I HAVE GONE THROUGH THE FINDINGS AND OBSERVATIONS OF THE AO MADE IN THE ASSESSMENT ORDER ALONG WITH THE REMAND REPORT. I HAVE ALSO CONSIDERED THE SUBMISSIONS MADE BY THE AP PELLANT. THAT ON THE FACTS OF THE CASE I FIND MERIT IN THE SUBMI SSIONS OF THE APPELLANT THAT IT FOLLOWS MERCANTILE SYSTEM OF ACCO UNTING AND CONTRACT BILLS OF INDIAN RAILWAYS ARE ACCOUNTED FOR AS AND WHEN RAISED BY IT. HOWEVER THE PAYEE DEDUCTS TDS AT THE TIME OF MAKING PAYMENT AND THEREFORE IN RESPECT OF BILLS R AISED AND ACCOUNTED FOR IN ONE ASSESSMENT YEAR BY THE APPELLA NT THE TDS DEDUCTED ON PAYMENT BASIS ARE CLAIMED IN ANOTHER AS SESSMENT YEAR. IT IS CLEAR FROM RECORDS THAT THE APPELLANT H AS BEEN ABLE TO RECONCILE THE PAYMENTS MADE TO IT IN THESE TWO ASSE SSMENT YEARS WITH THE GROSS CONTRACT RECEIPTS OFFERED TO TAX IN VARIOUS ASSESSMENT YEARS AS PER ITS BOOKS OF ACCOUNTS MAINT AINED TDS CERTIFICATES WORK ORDER ETC. TO PROVE THAT THERE W AS NO SUCH DIFFERENCE OR SUPPRESSION OF RECEIPTS/ INCOME EXCEP T RS.52 840/- (WRONGLY TAKEN AT RS.55 840/- BY THE AO) IN A.Y. 20 03-04. AS REGARDS RECEIPTS OF RS.52 840/- IN A.Y. 2003-04 THE APPELLANT'S CONTENTION THAT IT DISOWNED THE RECEIPT OF RS.52 84 0/- STOOD MENTIONED IN THE TDS CERTIFICATE AS THIS AMOUNT WAS NOT RECEIVED AND NO TDS WAS MADE FROM THE SAID PAYMENT. HOWEVER THE SAME CANNOT BE ACCEPTED BY THE UNDERSIGNED. IT IS C LEAR FROM THE TDS CERTIFICATE THAT SUM OF RS.52 840/- IS REFLECTE D THEREIN AS ISSUED BY NORTHERN RAILWAY IN THE NAME OF THE APPEL LANT. FURTHER ON RECONCILIATION TOTAL CONTRACT RECEIPTS AMOUNTS T O RS.52 840/- WHICH COULD NOT RECONCILED AND HENCE REMAINS UNACC OUNTED. THEREFORE ADDITION OF RS.52 840/- IN A.Y. 2003-04 MADE BY THE AO IS HEREBY CONFIRMED. IT IS ALSO CLEAR FROM THE A PPELLANTS SUBMISSIONS AS WELL AS AO'S REMAND REPORT THAT CORR ECT FIGURE OF DIFFERENTIAL RECEIPTS IS RS.31 31 532/- AND NOT RS. 32 32 335/- AS MENTIONED IN THE ASSESSMENT ORDER. FURTHER AS REGA RDS DIFFERENCE OF RS.1 55 819/- IN A.Y. 2002-03 MENTIONED BY THE A O IN HIS REMAND REPORT I AM INCLINED TO ACCEPT THE APPELLAN T'S CONTENTION THAT IT HAD DISCLOSED GROSS RECEIPTS OF RS. 22 72 1102/- IN ITS BOOKS WHERE AS GROSS RECEIPTS AS PER TDS CERTIFICATES IS RS. 22 56 5283/- ONLY THEREFORE THERE CANNOT BE ANY DIFFERENCE AS THE APPELLANT 8 HAS OFFERED HIGHER RECEIPTS IN THE BOOKS THAN THE T OTAL RECEIPTS AS PER THE TDS CERTIFICATES. IN THE RESULTS THE APPEL LANT IS ALLOWED RELIEF OF RS. 32 32 532/- (ALTHOUGH THE CORRECT FIGURE IS RS.31 31 532) IN THE A. Y. 2002-03 AND RS. 7 53 082/- IN THE A.Y. 2003-04 WITH ADDITION OF RS. 52 840/ - MAINTAINED IN A.Y. 2003- 04. AS REGARDS CONTENTIONS OF THE AO THAT CLAIM OF TDS WAS MADE BY THE APPELLANT AND ALLOWED IN CONTRAVENTION OF PR OVISIONS OF SECTION 199 OF THE LT. ACT NECESSARY DIRECTIONS U/S 251 (1)( C) IS GIVEN TO THE AO TO ALLOW CLAIM OF TDS TO THE APP ELLANT IN VIEW OF PROVISIONS OF SECTION 155(14) OF THE 1.T. ACT 1 961. 6. IN VIEW OF THE ABOVE IT IS SEEN THAT THE ASSESS EE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND T HE CONTRACT BILLS FROM THE RAILWAYS ARE ACCOUNTED FOR AS AND WH EN RAISED. THE PAYEE DEDUCTED TDS AT THE TIME OF MAKING THE PA YMENT THEREFORE THE BILLS WERE ACCOUNTED FOR IN ONE ASSE SSMENT YEAR AND THE DEDUCTED TDS ON PAYMENT BASIS WERE IN ANOTH ER YEAR BUT THE FACT REMAINS THAT THE PAYMENTS SO MADE WE RE RECONCILED WITH GROSS CONTRACT RECEIPTS AND WERE OF FERED FOR TAXATION AS PER BOOKS OF ACCOUNT MAINTAINED BY TH E ASSESSEE. THERE IS AN UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT THERE WAS NO SUPPRESSION OF RECEIPTS/INCOME. THE AD DITION OF RS.52 840/- MADE IN ASSESSMENT YEAR 2004-05 WAS CON FIRMED AS THE SAME COULD NOT BE RECONCILED. LIKEWISE THE CORRECT FIGURE OF DIFFERENTIAL RECEIPTS IS RS.31 31 532/- A ND 9 RS.32 32 335/-. SO FAR AS FOR ASSESSMENT YEAR 2002- 03 THE DIFFERENCE OF RS.1 55 819/- IS CONCERNED THE REMAN D REPORT AND THE CONTENTION OF THE ASSESSEE WERE DULY CONSIDERED AS THE GROSS RECEIPTS TO THE TUNE OF RS.2 27 21 102/- WERE CONSIDERED IN A JUSTIFIABLE MANNER CONSEQUENTLY WE FIND NO I NFIRMITY IN THE IMPUGNED ORDERS. THEREFORE THE IMPUGNED GROUNDS RA ISED IN THE RESPECTIVE APPEAL OF REVENUE ARE HAVING NO MERI TS THEREFORE DISMISSED. 7. SO FAR AS THE CROSS-OBJECTIONS PREFERRED BY THE ASSESSEE ON THE GROUND IN UPHOLDING THE LEGAL VALIDITY U/S 1 43 R.W.S. 147 FOR WANT OF JURISDICTION AS WELL AS PRIOR SANCTION U/S 151(2) OF THE ACT ARE CONCERNED UNDER THE FACTS AND CIRCUMSTANCE S AND ALSO THE ASSERTION MADE BY THE LD. RESPECTIVE COUNSEL W E FIND THAT THE LD. CIT(A) IS QUITE JUSTIFIED IN TAKING A PARTI CULAR DECISION THEREFORE THESE CROSS-OBJECTIONS FILED BY THE ASS ESSEE ARE ALSO HAVING NO MERIT. FINALLY THE APPEALS OF THE REVENUE AND CROSS-OBJE CTIONS OF THE ASSESSEE ARE DISMISSED. 10 ORDER WAS PRONOUNCED IN THE OPEN IN THE PRE SENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29.11.2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE !VYS!