ACIT, Hyderabad v. M/s BGS-SGS-SOMA (JV), Hyderabad

ITA 164/HYD/2010 | 2005-2006
Pronouncement Date: 28-09-2011 | Result: Dismissed

Appeal Details

RSA Number 16422514 RSA 2010
Assessee PAN AAAAB3714F
Bench Hyderabad
Appeal Number ITA 164/HYD/2010
Duration Of Justice 1 year(s) 7 month(s) 27 day(s)
Appellant ACIT, Hyderabad
Respondent M/s BGS-SGS-SOMA (JV), Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-09-2011
Date Of Final Hearing 31-05-2011
Next Hearing Date 31-05-2011
Assessment Year 2005-2006
Appeal Filed On 01-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMBER ITA NO.164/H/2010 ASSESSMENT YEAR 2005-06 THE ACIT CIRCLE 6(1) HYDERABAD VS M/S BGS - SGS - SOMA (JV) HYDERABAD (PAN AAAAB 3714 F) APPELLANT RESPONDENT CO.NO.88/H/2010 IN ITA NO.164/HYD/2010 ASSESSMENT YEAR 2005-06 M/S BGS - SGS - SOMA (JV) HYDERABAD (PAN AAAAB 3714 F)THE VS ACIT CIRCLE 6(1) HYDERABAD APPELLANT RESPONDENT ASSESSEE BY : SHRI B.V. PRASAD REDDY REVENUE BY : SHRI V. RAGHAVENDRA RAO DATE OF HEARING : 26.9.2011 DATE OF PRONOUNCEMENT : 28.9.2011` ORDER PER AKBER BASHA A.M. THE APPEAL PREFERRED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A) IV HYDERABAD DATED 13.11.2009 AND PERTAINS TO THE ASSESSMENT YEAR 2005 -06. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS IN IT S APPEAL: 2. THE CIT(A) IS CONTRARY TO THE PROVISIONS OF SE CTION 199 OF THE INCOME TAX ACT. ITA NO.164/HYD./2010 M/S BGS-SGS SOMA (JV) HYDERABAD 2 3. THE ASSESSEE DID NOT OFFER THE INCOME CORRESPONDING TO THE MOBILISATION ADVANCES RECEIVED AND AS SUCH THE CREDIT FOR THE TDS MADE ON MOBILISATION CANNOT BE ALLOWED FOR THE YEAR UNDER CONSIDERATION. 4. THE JUDGEMENT RELIED UPON BY THE CIT(A) IN THE C ASE OF M/S PROGRESSIVE CONSTRUCTIONS LTD. IS NOT ACCEPTABLE BY THE DEPARTMENT AND THEREFORE THE SAME SHOULD NOT HAVE BEEN RELIED UPON. 3. THE ASSESSEE RAISED THE FOLLOWING GROUNDS IN I TS CROSS OBJECTION: 1. MOBILISATION ADVANCED PAID BEING NOT SUMS IN WHI CH INCOME IS COMPRISED THE PAYER OF ADVANCES ERRED IN DEDUCTING ANY AMOUNT TOWARDS TAX. SUCH AMOUNT DEDUCTED ILLEGALLY BUT PAID TO THE DEPARTMENT THROU GH INCOME TAX CHALLAN AND ACCORDINGLY APPROPRIATED BY THE DEPARTMENT SHOULD BE CONSIDERED AS TAX PAID OTHERWISE AND NOT AS STATUTORY TDS. TAX PAID OTHERWISE IS TO BE GIVEN CREDIT U/S 234B OF THE IT ACT AND NOT TREATED AS TDS U/S 199 OF THE IT ACT. 2. ACCORDING TO THE PRINCIPLE LAID DOWN BY THE SUPR EME COURT IN THE CASE OF GE INDIA TECHNOLOGY (P) LTD. V S CIT (327 ITR 456) DEDUCTION OF TAX IS NOT REQUIRED TO BE AMDE IF THE SUM PAID IS NOT CHARGEABLE TO INCOME TA X. SUM HERE BEING ADVANCE NO INCOME IS COMPRISED THEREIN AND THEREFORE PROVISIONS OF SECTION 194C AR E NOT APPLICABLE. THE RATIO LAID DOWN BY THE SC APPL IES. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THIS ISSUES CAME UP FOR CONSIDERATION BEFORE THIS TRIBUNAL VIDE ORDER DATED 8.6.2011 IN ITA NO.1320/H/2010 & CO.2/H/2011 FOR THE ASSESSMENT YEAR 2007-08 WHEREIN THE TRIBUNAL HELD A S FOLLOWS: ITA NO.164/HYD./2010 M/S BGS-SGS SOMA (JV) HYDERABAD 3 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMIT TED THAT THE CIT(A) IS NOT CORRECT IN ALLOWING THE CRED IT FOR THE AMOUNT OF TDS EVEN THOUGH THE CORRESPONDING RECEIPT S ARE NOT OFFERED TO TAX. THE PROVISIONS OF SECTION 199 OF THE IT ACT ALLOW CREDIT FOR TDS ONLY TO THE EXTENT OF RECE IPTS OFFERED TO TAX ON WHICH TDS WAS DEDUCTED. HE RELIED ON THE DECISION OF THE CASE OF PRADEEP KUMAR DHIR VS. ACIT REPORTED IN 303 ITR (AT) 45 (CHD) THE THIRD MEMBER HAS HELD THAT TDS CREDIT CAN BE GIVEN ONLY IN THE YEAR IN WHICH THE INCOME AS PER TDS CERTIFICATE IS OFFERED TO TAX AND THE SAME WAS FOLLOWED BY THE HONBLE JURISDICTIONAL ITA T IN THE CASE OF M/S LIMAK SOMA (JV) ITA NO.99/H/2010 FOR T HE ASSESSMENT YEAR 2005-06. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF PROG RESSIVE CONSTRUCTIONS LIMITED HYDERABAD HAS CONSIDERED VAR IOUS DECISIONS OF DIFFERENT BENCHES OF THE TRIBUNAL AND HAS HELD THAT THEY ARE INCLINED TO FOLLOW THE DECISION OF TH E MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S TOYO ENGIN EERING INDIA LTD. REPORTED IN 5 SOT 616 (MUM). HE SUBMITT ED THAT THE ISSUE IN THIS APPEAL IS ALSO COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HYDERABAD TRIBUNA L DATED 7.7.2010 IN ITA NO.515/HYD/2010 IN THE CASE OF M/S PATEL SOMA J.V. HYDERABAD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THE ISSU E OF ALLOWING CREDIT OF TDS MADE ON MOBILISATION CHARGES IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE LATEST D ECISION OF ITA NO.164/HYD./2010 M/S BGS-SGS SOMA (JV) HYDERABAD 4 HYDERABAD BENCH OF TRIBUNAL DATED 7.7.2010 IN M/S P ATEL SOMA J.V. IN ITA NO.515/HYD/2010 WHEREIN THE EARLIE R DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF M/S PROGRESSIVE CONSTRUCTION LTD. (ITA NO.482/HYD/2001 DATED 23.11.2006) WAS FOLLOWED. FA CTS OF THE CASES OF THE ASSESSEE BEFORE US BEING SIMILA R TO THE ONE CONSIDERED AND DECIDED BY THE HYDERABAD BENCH O F THE TRIBUNAL IN THE CASE OF M/S PATEL SOMA J.V. AND WE BEING IN AGREEMENT WITH THE DECISION OF THE TRIBUNAL RELIED UPON THE LEARNED COUNSEL FOR THE ASSESSEE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND REJECT THE GROUNDS OF THE REVEN UE IN THESE APPEALS FOR THE SAME REASONS. WE ALSO MERIT IN THE ARGUMENTS OF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE ASSESSEE OFFERED THE VALUE OF WOR K IN PROGRESS AS ITS REVENUE IN THE PROFIT AND LOSS ACCO UNT BY PLACING RELIANCE ON THE PROFIT AND LOSS ACCOUNT PLA CED BEFORE US AND HENCE THE ASSESSEE ALREADY OFFERED THE INCO ME AS THE VALUE OF WORK IN PROGRESS IN ITS PROFIT AND LOS S ACCOUNT RELATING TO THE MOBILISATION ADVANCE ON WHICH TDS W AS DEDUCTED. IN THE CASE RELIED ON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IN THE CASE OF M/S LIMA K SOMA & OTHERS THERE IS NO FINDING BY THE BENCH WIT H REGARD TO THE VALUE OF WORK IN PROGRESS SHOWN IN TH E PROFIT AND LOSS ACCOUNT AS THE INCOME OF THE ASSESSEE REL ATING TO THE MOBILISATION OF ADVANCE RECEIVED. THE CROSS OB JECTIONS FILED BY THE ASSESSEE MERELY SUPPORT THE ORDERS OF THE CIT(A) AND ACCORDINGLY THE SAME HAVE BECOME INFRUCTUOUS. HENCE THEY ARE DISMISSED AS SUCH. ITA NO.164/HYD./2010 M/S BGS-SGS SOMA (JV) HYDERABAD 5 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT 28.9. 2011 SD/ - (G.C. GUPTA) SD/ - (AKBER BASHA) VICE PRESIDENT ACCOUNTANT M EMBER DATED THE 28 TH SEPT. 2011 COPY FORWARDED TO: 1. THE ACIT CIRCLE 6(1) IT TOWERS MASAB TANK HYDERABAD 2. M/S BGS-SGS-SOMA (JV) 8-2-623/5/1/1/14 AVENUE-4 BANJARA HILLS HYDERABAD. 3. CIT(A) IV HYDERABAD 4. THE CIT HYDERABAD 5. THE DR ITAT HYDERABAD NP/