The DCIT, Circle-1(1),, Baroda v. Amarshiv Construction Pvt. Ltd.,, Baroda

ITA 1929/AHD/2010 | 2004-2005
Pronouncement Date: 30-04-2015 | Result: Partly Allowed

Appeal Details

RSA Number 192920514 RSA 2010
Assessee PAN AACCA3235E
Bench Ahmedabad
Appeal Number ITA 1929/AHD/2010
Duration Of Justice 4 year(s) 10 month(s) 25 day(s)
Appellant The DCIT, Circle-1(1),, Baroda
Respondent Amarshiv Construction Pvt. Ltd.,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 30-04-2015
Date Of Final Hearing 08-04-2015
Next Hearing Date 08-04-2015
Assessment Year 2004-2005
Appeal Filed On 04-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD 00 ! ' #$ % & BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER !./ ITA NO.1929/AHD/2010 % ) *)/ ASSESSMENT YEAR: 2004-05 D CIT CIRCLE-1(1) BARODA. VS AMARSHIV CONSTRUCTION P. LTD. 14 ATUL PARK SOCIETY KARELIBAUG BARODA. PAN : AACCA 3235 E !./ ITA NO.258/AHD/2013 % ) *)/ ASSESSMENT YEAR: 2009-10 AMARSHIV CONSTRUCTION P. LTD. 14 ATUL PARK SOCIETY KARELIBAUG BARODA. PAN : AACCA 3235 E VS DCIT CIRCLE-1(1) BARODA. + / (APPELLANT) -. + / (RESPONDENT) REVENUE BY : SHRI M.K. SINGH SR. D.R. ASSESSEE(S) BY: SHRI M.K. PATEL A.R. / DATE OF HEARING : 08/04/2015 / DATE OF PRONOUNCEMENT: 30/04/2015 // O R D E R PER SHRI N.S. SAINI ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS FILED BY THE REVENUE AND A SSESSEE AGAINST THE ORDER OF CIT(A)-I BARODA DATED 17.03.2 010. ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 2 2. IN GROUND NO.1 OF THE APPEAL THE GRIEVANCE OF T HE REVENUE IS THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.39 17 182/- MADE UNDER SECTION 41(1) OF THE ACT IN RESPECT OF AMOUNT OF CR EDITORS REMAINED UNPAID FOR MORE THAN 3 YEARS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. OB SERVED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THERE WERE OU TSTANDING BALANCES IN THE CASE OF FOUR CREDITORS WHICH REMAINED UNPAID FOR MORE THAN 3 YEARS THE DETAILS OF WHICH ARE AS UNDER :- 1) GANESH CARTING : RS.29 57 645/- 2) JIVANLAL JOITARAM PATEL : RS.1 67 082/- 3) SHIV CONSTRUCTION COMPANY : RS.3 09 602/- 4) B.D. PATEL & CO. : RS.4 82 852/- 4. HE OBSERVED THAT THE OBLIGATION OF THE ASSESSEE TO MAKE THE PAYMENT STOOD EXTINGUISHED DUE TO EXPIRY OF THE LIM ITATION PERIOD OF THREE YEARS AND THEREFORE HE MADE ADDITION OF RS. 39 17 182/- TO THE TOTAL INCOME OF THE ASSESSEE BY INVOKING PROVISIONS OF SECTION 41(1) OF THE ACT. 5. BEFORE THE CIT(A) THE ASSESSEE ARGUED THAT THESE AMOUNTS WERE OUTSTANDING FOR MORE THAN ONE YEAR AND ASSESSEE CON TINUED TO SHOW THE SAME IN ITS BOOKS OF ACCOUNT AND THEREFORE IT ACK NOWLEDGED THE LIABILITY TO MAKE THE PAYMENT HENCE SECTION 41(1) OF THE ACT WAS NOT APPLICABLE. THE ASSESSEE HAD NOT RECEIVED ANY BENE FIT BY WAY OF REMISSION OR CESSATION OF LIABILITY. CIT(A) OBSERV ED THAT SECTION 18 OF THE LIMITATION ACT 1963 PROVIDES THAT WHERE A DE BT IS ACKNOWLEDGED IN WRITING BEFORE THE EXPIRY OF LIMITATION PERIOD THIS WOULD AMOUNT TO SUFFICIENT ACKNOWLEDGEMENT AND FRESH LIMITATION SHA LL BE COMPUTED FROM THE TIME WHEN SUCH ACKNOWLEDGEMENT IS MADE. IT WA S HELD THAT THE LIABILITIES WERE NOT BARRED BY LIMITATION AND THER EFORE HELD THAT THE ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 3 CIT(A) WAS NOT JUSTIFIED IN ADDING THE SAME UNDER S ECTION 41(1) OF THE ACT. 6. DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE OR DER OF THE A.O. 7. BEFORE US THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A) AND RELIED ON THE DECISION OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. NITIN S. GARG REPORTED IN [2012] 22 TAXMANN.COM 59 (GUJ.) AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT WHERE THE ASSESSEE HAD CONTINUE D TO SHOW THE ADMITTED AMOUNTS AS LIABILITIES IN ITS BALANCE SHEE T THE SAME CANNOT BE TREATED AS A CASE OF CESSATION OF LIABILITIES. MER ELY BECAUSE LIABILITIES ARE OUTSTANDING FOR LAST MANY YEARS IT CANNOT BE INFER RED THAT THE SAID LIABILITIES HAD CEASED TO EXIST. THE A.O. SHALL HA VE TO PROVE THAT THE ASSESSEE HAS OBTAINED THE BENEFITS IN RESPECT OF SU CH TRADING LIABILITIES BY WAY OF REMISSION OR CESSATION THEREOF WHICH IS N OT THE CASE BEFORE US. MERELY BECAUSE THE ASSESSEE OBTAINED BENEFIT O F REDUCTION IN THE EARLIER YEARS AND BALANCE IS CARRIED FORWARD IN THE SUBSEQUENT YEAR IT WOULD NOT PROVE THAT THE TRADING LIABILITIES OF THE ASSESSEE HAVE BECOME NON EXISTENT. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON REC ORD. IN THE INSTANT CASE THE ASSESSEE HAS SHOWN OUTSTANDING CREDITS OF RS.39 17 182/- IN THE NAME OF 4 PERSONS. THE A.O. FOUND THAT THESE L IABILITIES ARE UNPAID FOR MORE THAN THREE YEARS ACCORDINGLY HE HELD THA T THERE WAS CESSATION OF LIABILITY AND BY INVOKING SECTION 41(1) OF THE A CT MADE ADDITION OF RS.39 17 182/- TO THE INCOME OF THE ASSESSEE. ON A PPEAL THE CIT(A) DELETED THE ADDITION ON THE GROUND THAT THE ASSESSE E HAS SHOWN LIABILITIES IN ITS BOOKS OF ACCOUNT AND THEREFORE THE LIMITATION PERIOD WILL START FROM THE TIME WHEN SUCH ACKNOWLEDGEMENT IS MA DE IN THE BOOKS ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 4 OF ACCOUNT BY IT. IT WAS THEREFORE HELD THAT THE LIABILITY WAS EXISTING ONE. 9. WE FIND THAT NO MATERIAL WAS BROUGHT ON RECORD B Y THE REVENUE TO SHOW THAT THE LIABILITIES CEASED TO EXIST AND THE A SSESSEE HAS OBTAINED THE BENEFITS IN RESPECT OF SUCH LIABILITIES BY WAY OF REMISSION OR CESSATION THEREOF. FURTHER IT HAS BEEN ADMITTED BY THE REVENUE THAT THE ASSESSEE HAS NOT WRITTEN OFF THE OUTSTANDING LI ABILITIES IN THE BOOKS OF ACCOUNT. IN THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT IN TH E CASE OF CIT VS. NITIN S. GARG (SUPRA) SQUARELY APPLIES. THEREFORE WE CO NFIRM THE ORDER OF CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE REV ENUE. 10. GROUND NO.2 OF THE APPEAL OF THE REVENUE IS DIR ECTED AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS.2 39 642/- ON ACCOUNT OF EXCESSIVE PAYMENTS MADE FOR PURCHASE OF METAL FROM THE PERSON SPECIFIED UNDER SECTION 40A(2)(B) OF THE ACT. 11. THE BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGE D IN THE BUSINESS OF CONSTRUCTION OF ROADS. THE A.O. FOUND THAT THE ASS ESSEE HAS PURCHASED METAL FROM M/S MRB BUILDERS PVT. LTD. AT AN AVERAGE PRICE OF RS.120/- PER MT AND GRIT @ RS.120/- PER MT. HE OBSERVED THA T M/S MRB BUILDERS PVT. LTD. WAS THE PERSON SPECIFIED UNDER SECTION 40 (A)(2)(B) OF THE ACT. HE ALSO OBSERVED THAT METAL WAS PURCHASED BY THE AS SESSEE FROM M/S AMAR MINING COMPANY WHO WAS NOT A RELATED PARTY AT THE AVERAGE PRICE OF RS.107.50 PER MT AND GRIT AT RS 87.50 PER MT. I N REPLY TO THE SHOW CAUSE THE ASSESSEE SUBMITTED THAT THE PURCHASES MA DE FROM M/S MRB BUILDERS PVT. LTD. AND AMAR MINING COMPANY WERE AT THE RATES CHARGED BY THOSE PARTIES EVEN FROM OTHER PURCHASERS. THERE WAS NO INFLATION OF PURCHASE PRICE. IT WAS ALSO SUBMITTED THAT BOTH M/ S MRB BUILDERS PVT. LTD. AND AMAR MINING COMPANY WERE PAYING TAX AT THE SAME RATE AS THE ASSESSEE. HOWEVER THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 5 BY THE A.O. WHO HELD THAT THE FAIR MARKET PRICE WAS RS.87.50 AGAINST WHICH PURCHASES WERE MADE @ RS.120/- PER MT. THERE FORE THE PURCHASES WERE HELD TO HAVE BEEN INFLATED BY RS.32. 5 PER MT I.E. 27% OVER AND ABOVE THE FAIR MARKET VALUE. HENCE 27% OF RS.14 45 366/- I.E. RS.3 90 249/- WAS ADDED TO THE INCOME OF THE A SSESSEE. 12. ON APPEAL BEFORE THE CIT(A) IT WAS ARGUED THAT THE A.O. HAS MADE IMPROPER COMPARISON SINCE THE DIFFERENCE HAD B EEN COMPUTED BETWEEN RS.120/- AND RS.87.50/- WHEREAS PROPER COMP ARISON SHOULD HAVE BEEN BETWEEN RS 120 AND 107.50. 13. THE CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HELD THAT METAL WAS PURCHASED FROM AMAR MINING COMPANY @ RS.107.50 AND GRIT WAS PURCHASED AT 87.50. FROM M/S MRB BUIL DERS PVT. LTD. THE PURCHASES OF METAL AND GRIT WERE BOTH @ RS.120/- PE R ANNUM. HENCE THE COMPARISON BETWEEN THE PURCHASE PRICE FROM AMAR MINING COMPANY OF GRIT WITH THE PURCHASE PRICE FROM M/S MRB BUILDE RS PVT. LTD. OF METAL WAS NOT COMPARABLE. HOWEVER HE HELD THAT THE ASSE SSEE WAS UNABLE TO SHOW WHAT WAS THE FAIR MARKET RATE OF METAL AND GRI T BY WAY OF SALES INSTANCES OF UNRELATED PARTIES DEALING IN THESE ITE MS HENCE HE HELD THAT THE A.O. WAS JUSTIFIED IN TREATING THE PAYMENT TOWA RDS PURCHASE OF METAL AND GRIT FROM M/S MRB BUILDERS PVT. LTD. AS E XCESSIVE. HE OBSERVED THAT EXCESSIVE AMOUNT PAID WAS RS.12.5 PER MT (RS.120/- LESS RS.107.50 PER MT) I.E. 10.42%. APPLYING THIS RATE TO THE TOTAL PURCHASES OF RS.14 45 366/- HE RESTRICTED THE ADDI TION TO THE EXTENT OF RS.1 50 607/- AND DELETED THE BALANCE AMOUNT OF ADD ITION OF RS.2 39 642/- 14. BEFORE US THE DEPARTMENTAL REPRESENTATIVE SUPP ORTED THE ORDER OF A.O. WHEREAS THE AUTHORISED REPRESENTATIVE SUPPO RTED THE ORDER OF CIT(A). ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 6 15. WE FIND THAT ACCORDING TO THE AO THE ASSESSEE HAS PURCHASED METAL AT AN EXCESSIVE RATE OF 12.50 PER MT. AND GRI T AT AN EXCESSIVE RATE OF 32.50 PER MT FROM M/S MRB BUILDERS PVT. LTD . THAN ITS FAIR MARKET VALUE. THUS ACCORDING TO THE AO BOTH THE ITEMS WERE PURCHASED BY THE ASSESSEE AT THE RATE OF RS.120/- P ER MT FROM M/S MRB BUILDERS PVT. LTD. AND CONSEQUENTLY PURCHASES WERE IN EXCESS AT THE RATE OF 27% IN RESPECT OF GRIT AND AT THE RATE OF 1 0.42% IN RESPECT OF METAL. HOWEVER THE AO DISALLOWED 27% OF TOTAL PU RCHASES WHICH WORKED OUT TO RS.3 90 249/- AS EXCESSIVE PURCHASE P RICE PAID TO RELATIVES. 16. ON APPEAL THE CIT(A) RESTRICTED THE DISALLOWAN CES AT THE RATE OF 10.42% OF TOTAL PURCHASES WHICH WORKED OUT TO RS.1 50 607/-. 17. ACCORDING TO US THE LOWER AUTHORITIES SHOULD H AVE DISALLOWED AT THE RATE OF 27% OF PURCHASE OF METAL FROM M/S MRB B UILDERS PVT. LTD. AND AT THE RATE OF 10.42% ON PURCHASES OF GRIT FROM M/S MRB BUILDERS PVT. LTD. THUS BOTH THE LOWER AUTHORITIES WERE NO T JUSTIFIED IN THEIR ACTION. WE FIND THAT THE BIFURCATION OF TOTAL PURC HASES OF RS.14 45 366/- AS TO HOW MUCH FOR METAL AND HOW MUC H WAS FOR GRIT HAS NOT BEEN BROUGHT ON RECORD BY EITHER OF THE LOW ER AUTHORITIES AND BY EITHER OF THE PARTIES BEFORE US. WE THEREFORE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND RESTORE THE MATTER TO THE FILE OF THE AO WITH DIRECTION TO RESTRICT THE DISALLOWANCE UNDER S ECTION 40A(2) (B) TO THE EXTENT OF 27% IN RESPECT OF PURCHASES OF METAL FROM M/S MRB BUILDERS PVT. LTD. AND AT THE RATE OF 10.42% IN RES PECT OF PURCHASES OF GRIT FROM M/S MRB BUILDERS PVT. LTD. THUS THIS GR OUND OF APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 7 18. IN GROUND NO.3 THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.8 55 313/- MAD E ON ACCOUNT OF GRATUITY PAYMENT LEGAL & PROFESSIONAL FEES AND MIS C. EXPENSES. 19. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. M ADE DISALLOWANCE OF FOLLOWING EXPENSES:- 1. GRATUITY 4 00 613 2. LEGAL & PROFESSIONAL FEES 3 35 662/- 3. MISC & OFFICE EXPENSES 19 385 4. MOTOR CYCLE EXPENSES 19 677 5. POSTAGE & TELEGRAM 3 559 6. TRAVELLING & CONVEYANCE EXPENSES 76 417 TOTAL 8 55 313 20. THE A.O. OBSERVED THAT GRATUITY WAS PAID DIRECT LY TO THE EMPLOYEES AND NOT TO ANY APPROVED GRATUITY FUND AND THEREFORE HE DISALLOWED DEDUCTION FOR THE SAME. WITH REGARD TO THE OTHER EXPENSES THE A.O. OBSERVED THAT INCREASE IN THE EXPENDITURE OVER THE EARLIER YEAR WAS NOT PROPERLY EXPLAINED. 21. IN APPEAL BEFORE THE CIT(A) THE ASSESSEE CONTEN DED THAT THE DISALLOWANCE WAS MADE ON ADHOC BASIS WITHOUT POINTI NG OUT ANY SPECIFIC DEFECTS. BOOKS OF ACCOUNT HAD BEEN AUDITED AND TAX AUDIT REPORT HAD BEEN DULY ENCLOSED ALONG WITH THE RETURN. NO DEFEC T IN THE CLAIM OF EXPENSES RELATING TO THE ABOVE AMOUNT WAS POINTED O UT EITHER BY AUDITOR OR BY THE A.O. HIMSELF. IT WAS SUBMITTED T HAT THE PAYMENT OF GRATUITY WAS EX GRATIA PAYMENT AND WAS NOT REQUIRED TO BE MADE THROUGH AN APPROVED GRATUITY FUND. THE INCREASE IN OTHER EXPENSES WAS A NORMAL INCREASE ON ACCOUNT OF INCREASE IN PETROL STATIONERY TICKETS ETC. LEGAL AND PROFESSIONAL FEES INCREASED SINCE T HE BILLS WERE PRESENTED BY THE ADVOCATES IN RESPECT OF ARBITRATIO N CLAIMS AND OTHER LEGAL MATTERS AND THE HEARINGS IN THE COURT WERE HE LD DURING THIS FINANCIAL YEAR ONLY. ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 8 22. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE AND THE FACTS OF THE CASE OBSERVED THAT IN ORDER TO MA KE SUSTAINABLE DISALLOWANCE IT MUST BE SHOWN ON THE BASIS OF SOME MATERIAL ON RECORD THAT THE CLAIM MADE BY THE ASSESSEE WAS INCORRECT O R FRAUDULENT. ACCOUNTS OF THE ASSESSEE ARE AUDITED AND THE AUDITO R HAS CERTIFIED THE CORRECTNESS OF THE CLAIM OF THE EXPENSES. HENCE W ITHOUT ANY MATERIAL IT WOULD BE INCUMBENT ON THE A.O. TO ACCEPT THE CLA IM. IN THE ABSENCE OF ANY MATERIAL DEFECTS IN THE CLAIM IN HIS OPINIO N THE A.O. WAS NOT JUSTIFIED IN MAKING THE DISALLOWANCE OF RS.8 55 313 /- AND THEREFORE HE DELETED THE SAME. 23. THE DR MERELY SUPPORTED THE ORDER OF THE AO AND COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE FINDINGS OF THE CIT(A ). WE FIND THAT DISALLOWANCE MADE BY THE AO FOR THE REASONS STATED IN THE ASSESSMENT ORDER CANNOT BE SUSTAINED. WE THEREFORE DO NOT F IND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF T HE CIT(A) WHICH IS HEREBY CONFIRMED AND THE GROUND OF APPEAL OF THE RE VENUE IS DISMISSED. ASSESSEES APPEAL 24. IN ASSESSEES APPEAL GROUND NOS.1 TO 3 ARE DIRE CTED AGAINST THE ORDER OF CIT(A) HOLDING THAT RETENTION MONEY OF RS. 27 81 076/- ACCRUED TO THE ASSESSEE COMPANY DURING THE PREVIOUS YEAR TO A.Y. 2009-10. 25. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. O BSERVED THAT THE ASSESSEE COMPANY WHILE COMPUTING ITS INCOME FROM BU SINESS DEDUCTED AN AMOUNT OF RS. 27 81 076/- FROM THE NET PROFIT AR RIVED AT AS PER PROFIT & LOSS ACCOUNT. THIS AMOUNT REPRESENTED RETENTION MONEY/SECURITY DEPOSITS RETURNED BY PERSONS FOR WHOM THE ASSESSEE HAD UNDERTAKEN CONTRACT WORK DURING THE YEAR. IN REPLY TO THE SHO W CAUSE NOTICE THE ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 9 ASSESSEE SUBMITTED THAT IT WAS ENGAGED IN THE BUSIN ESS OF CONSTRUCTION OF CIVIL WORKS DAMS ROADS ETC. THE COMPANY HAD U NDERTAKEN WORK FOR VARIOUS GOVERNMENT AGENCIES WHO HAD RETAINED SECURI TY DEPOSITS WITH THEM. THE AMOUNT OF RS.27 81 076/- WAS WITHHELD BY GOVERNMENT AGENCIES PENDING VERIFICATION OF SATISFACTORY COMPL ETION OF WORK. THE ASSESSEE HAS CLAIMED DEDUCTION OF THESE AMOUNTS AS RIGHT TO RECEIVE THE SAID AMOUNT HAD NOT ACCRUED TO THE ASSESSEE COMPANY TILL SATISFACTORY COMPLETION OF WORK AND REMOVAL OF DEFECTS. THE ASS ESSEE PLACED RELIANCE ON THE DECISION OF HONBLE CALCUTTA HIGH C OURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. SIMPLEX CONCRETE PIL ES (INDIA) P. LTD. (1986) 179 ITR 8 THE A.O. DID NOT ACCEPT THE EXPLAN ATION OF THE ASSESSEE ON THE GROUND THAT THIS WAS A RECURRING IS SUE AND IN A.YS. 1992-93 AND 1993-94 THE TRIBUNAL HAD DECIDED THE IS SUE IN FAVOUR OF THE REVENUE AND ASSESSEES APPEAL BEFORE THE HONBL E HIGH COURT OF GUJARAT WAS PENDING ADJUDICATION. 26. ON APPEAL THE CIT(A) CONFIRMED THE ACTION OF T HE A.O. 27. BEFORE US THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE HONBLE GUJARAT HIGH COURT HAS D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE FOR A.Y. 199 2-93 WHICH IS REPORTED AT [2014] 45 TAXMANN.COM 429 (GUJ.) IT WA S THEREFORE HIS SUBMISSION THAT FOLLOWING THE SAME THE GROUND OF A PPEAL OF THE ASSESSEE SHOULD BE ALLOWED. 28. ON THE OTHER HAND DEPARTMENTAL REPRESENTATIVE FAIRLY CONCEDED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF THE ASSE SSEE BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN ASSESSEES OWN CAS E IN THE A.Y. 1992- 93. 29. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING MATERIAL AVAILABLE ON RECORD WE FIND THAT IT IS NOT IN DISP UTE THAT THE ASSESSEE ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 10 HAD NOT INCLUDED RETENTION MONEY OF RS.27 81 076/- IN ITS INCOME ON THE GROUND THAT THE MONEY WILL BE RECEIVED AFTER SA TISFACTORY COMPLETION OF WORK AND REMOVAL OF DEFECTS. TILL THAT TIME THE RIGHT TO RECEIVE THE AMOUNT DID NOT ACCRUE TO THE ASSESSEE. WE FIND THA T THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF THE ASSESSEE ITSELF IN A.Y. 1992-93 HELD AS UNDER:- WHERE ASSESSEE WAS AWARDED A CONSTRUCTION CONTRACT AND IN TERMS OF CONTRACT CERTAIN AMOUNT WAS WITHHEL D BY EMPLOYER OF CONTRACT TOWARDS RETENTION MONEY FOR SATISFACTORY EXECUTION OF CONTRACT BY ASSESSEE RET ENTION MONEY WAS TO BE TAXED IN ASSESSMENT YEAR RELEVANT T O PREVIOUS YEAR IN WHICH IT BECAME PAYABLE TO ASSES SEE AS PER TERMS OF CONTRACT I.E. AFTER DEFECT LIABILITY WAS OVER AND AFTER ENGINEER-IN-CHARGE CERTIFIED THAT NO LIABILITY WAS ATTACHED TO ASSESSEE 30. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT (SUPRA) WE DELETE THE ADDITION OF RS.27 81 076/- A ND ALLOW THESE GROUNDS OF APPEAL. 31. IN GROUND NO.4 OF THE APPEAL THE GRIEVANCE OF T HE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.10 000/-. 32. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE CLAIMED DEDUCTION OF RS.10 000/- UNDER THE HEAD VOLUNTARY R ETIREMENT EXPENSES. ACCORDING TO THE ASSESSEE THE EXPENSES WERE PAYABLE TO THE EMPLOYEES ON RETIREMENT/RESIGNATION. HE OBSERV ED THAT THE EXPENSES ARE NOT COVERED UNDER SECTION 35DDA AND SA ME HAD BEEN DISALLOWED IN PRECEDING YEARS. THERE WAS NO SCHEME FOR VOLUNTARY RETIREMENT WITH THE COMPANY FOR WHICH ASSESSEES EX PENDITURE WAS ALLOWABLE UNDER SECTION 35DDA. THEREFORE THE SAME WAS DISALLOWED BY THE A.O. AND WAS CONFIRMED IN APPEAL BY THE CIT(A). ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 11 33. AT THE TIME OF HEARING THE AUTHORISED REPRESEN TATIVE OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THIS GRO UND OF APPEAL AND HENCE THE SAME IS DISMISSED FOR WANT OF PROSECUTION . 34. GROUND NO.5 OF THE APPEAL OF THE ASSESSEE IS DI RECTED AGAINST THE OF CIT(A) CONFIRMING ADDITION OF RS.2 81 124/- UNDE R SECTION 40A(2)(B) OF THE ACT. 35. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE CLAIMED COMMISSION PAID TO SAMRAT TRADING CORPORATION PROP RIETOR ASHOK M. PATEL (HUF) OF RS.2 81 124/-. A.O. OBSERVED THAT T HE ASSESSEE FAILED TO PROVE THE GENUINENESS OF PAYMENT OF COMMISSION WHER E THE KARTA OF HUF HAS ALREADY DIED IN MARCH 2000.HE ALSO OBSERVED THAT SIMILAR ADDITION WAS MADE IN THE CASE OF THE ASSESSEE IN A. Y. 2004-05 WHICH WAS UPHELD BY THE CIT(A) VIDE HIS ORDER DATED 17.03 .2010. THEREFORE HE CONFIRMED THE DISALLOWANCE MADE BY THE A.O. 36. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMI TTED THAT IN THE A.Y. 2004-05 THE DISALLOWANCE MADE BY THE A.O. FOR COMMISSION PAYMENT WAS CONFIRMED IN APPEAL BY THE CIT(A) AND T HE ASSESSEE HAS NOT PREFERRED ANY FURTHER APPEAL TO THE TRIBUNAL TH ERE AGAINST. IN VIEW OF THE ABOVE SUBMISSION OF THE AR OF THE ASSESSEE WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) WHICH IS HEREBY CONFIRMED AN D THUS THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 37. GROUND NO.6 OF THE APPEAL IS DIRECTED AGAINST T HE ORDER OF CIT(A) CONFIRMING DISALLOWANCE OF RS.2 33 648/-. 38. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. O BSERVED FROM THE BALANCE SHEET OF THE ASSESSEE THAT IT HAD ADVANCED MONEY TO VARIOUS PARTIES AND OUT OF THESE ADVANCES THE ASSESSEE HAS ALSO ADVANCED MONEY TO M/S AMARSHIV ENGINEERING CO. ON WHICH NO I NTEREST WAS ITA NO.1929/AHD/2010 & 258/AHD/2013 AMARSHIV CONSTRUCTION PVT. LTD. FOR AYS. 2004-05 & 2009-10 12 CHARGED. HE ALSO OBSERVED FROM THE LEDGER ACCOUNT THAT THESE ADVANCES WERE MADE IN EARLIER YEARS AND DURING THE YEAR THERE WAS NO TRANSACTION WITH THESE COMPANIES. FURTHER THE CONC ERN IS OWNED BY THE RELATED PERSONS TO THE DIRECTORS OF THE COMPANY. A .O. FURTHER OBSERVED THAT IN THE P&L ACCOUNT THE ASSESSEE HAS CLAIMED I NTEREST PAYMENT ON LOAN FUNDS WHICH HAVE INCREASED TO RS.3 97 88 062/- FROM THE EARLIER YEAR AT RS.2 62 68 595/-. IT WAS ALSO OBSERVED BY HIM THAT INTEREST AND FINANCE CHARGES WERE SHOWN AT RS.6 90 053/- AND THA T THE ADVANCE OF RS.19 47 070/- WAS MADE TO M/S AMARSHIV ENGINEERING CO. THEREFORE THE A.O. COMPUTED THE DISALLOWANCE OF INTEREST @ 12 % WHICH ACCORDING TO HIM WAS THE BANK INTEREST RATE PREVAILING DURING THE YEAR AND THEREBY MADE DISALLOWANCE OF RS.2 33 648/- OUT OF I NTEREST EXPENDITURE. THE A.O. ALSO MENTIONED THAT THE ASSESSEE HAS AGREE D TO THE DISALLOWANCE OF INTEREST ON ADVANCE TO M/S AMARSHIV ENGINEERING CO. 39. ON APPEAL THE CIT(A) CONFIRMED THE DISALLOWANCE BY OBSERVING THAT NO SUBMISSION IN THIS REGARD WAS MADE DURING T HE APPEAL PROCEEDINGS BEFORE HIM. 40. AUTHORISED REPRESENTATIVE OF THE ASSESSEE BEFOR E US SUBMITTED THAT THE ASSESSEE HAS NOT PRESSED THIS GROUND BEFOR E THE CIT(A) AND THEREFORE THIS GROUND OF APPEAL OF THE ASSESSEE SH OULD BE DISMISSED. WE THEREFORE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 41. IN THE RESULT APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON THURSDAY THE 30 TH OF APRIL 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/04/2015