Hetu Construction Pvt.Ltd.,, Ahmedabad v. The ACIT.,(OSD)Circle-4,, Ahmedabad

ITA 218/AHD/2009 | 2005-2006
Pronouncement Date: 04-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 21820514 RSA 2009
Assessee PAN AAACH3869B
Bench Ahmedabad
Appeal Number ITA 218/AHD/2009
Duration Of Justice 2 year(s) 1 month(s) 12 day(s)
Appellant Hetu Construction Pvt.Ltd.,, Ahmedabad
Respondent The ACIT.,(OSD)Circle-4,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 04-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 04-03-2011
Date Of Final Hearing 28-02-2011
Next Hearing Date 28-02-2011
Assessment Year 2005-2006
Appeal Filed On 22-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL VP AND BHAVNESH SAINI JM) ITA NO.218/AHD/2009 A. Y.: 2005-06 HETU CONSTRUCTION (P) LTD. 5-B VISHWABHARTI SOCIETY B/H. NAVRANGPURA TELEPHONE EXCHANGE ELLISBRIDGE AHMEDABAD VS THE A. C. I. T. (OSD) CIRCLE -4 AHMEDABAD PA NO. AAACH 3869 B (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. SOPARKAR AR RESPONDENT BY SHRI R. K. DHANISTA DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE LEARNED CIT(A)-VIII AHMEDABAD DATED 24-11-2008 FOR ASSESSMENT YEAR 2005-06. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND T HE MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO.1 THE ASSESSEE CHALLENGED THE ORDE R OF THE LEARNED CIT(A) IN UPHOLDING THE REJECTION OF THE BO OKS OF ACCOUNTS BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE IT ACT. ON GROUND NO.2 THE ASSESSEE CHALLENGED THE ADDITION OF RS.8 01 195/- ON ACCOUNT OF UNACCOUNTED WORK RECEIPT OF BHARAT VIJAY MILLS LTD. (IN SHORT BVML). IT IS CLAIMED THAT THE ASSESSEE IS ABL E TO EXPLAIN THE ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 2 DIFFERENCE IN TDS CERTIFICATES. ON GROUND NO.3 THE ASSESSEE CHALLENGED THE ADDITION OF RS.1 16 360/- AS UNACCOU NTED WORK RECEIPT OF CHIRIPAL PETROCHEMICALS LTD. (IN SHORT C PL). IT IS CLAIMED THAT THE ADDITION IS MADE DUE TO OMISSION OF CERTAI N FIGURES OF SERVICE TAX. THEREFORE ADDITION IS LIABLE TO BE DELETED. T HE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COMMON IN ALL THE 3 GROUNDS. THEREFORE ALL THE 3 GROUNDS ARE DISPOSED OF TOGETHER. 4. BRIEFLY THE FACTS OF THE CASE ON THE ABOVE GROU NDS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY WHICH IS ENGA GED IN CIVIL CONSTRUCTION WORK AND CONTRACT BUSINESS. THE AO WHI LE COMPLETING ASSESSMENT FOUND VARIOUS DISCREPANCIES WITH REGARD TO RECEIPTS ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS FROM CIVIL C ONSTRUCTION WORKS OF VARIOUS PARTIES AND THE RECEIPTS DISCLOSED IN TH E TDS CERTIFICATES ISSUED BY THESE PARTIES. THE BOOKS OF ACCOUNT WERE ACCORDINGLY REJECTED U/S 145 (3) OF THE IT ACT AND THE ABOVE AD DITIONS HAVE BEEN MADE. THE AO FOUND FROM THE DETAILS FILED BY THE AS SESSEE THAT IT DISCLOSED RS.72 75 615/- AS CONTRACT RECEIPT FROM B VML DURING THE RELEVANT PERIOD AS AGAINST RS.73 63 972/- SHOWN BY THAT COMPANY IN THE TDS CERTIFICATES ISSUED TO THE ASSESSEE. SINCE THERE WAS A DIFFERENCE OF RS.88 357/- THE AO ASKED THE ASSESSE E TO RECONCILE THE DIFFERENCE SO DETECTED. THE ASSESSEE CLAIMED THAT I T WAS A SMALL DIFFERENCE ON ACCOUNT OF OUTSTANDING PAYMENT DUE TO THE PARTY. HOWEVER THE ASSESSEE CHANGED THE STAND LATER ON AN D CLARIFIED THAT IT HAD RECEIVED RS.80 76 810/- DURING THE RELEVANT PERIOD AGAINST WORK AND MOBILIZATION ADVANCES. THE AO HOWEVER FOUND TH AT THE ASSESSEE HAD RECEIVED MOBILIZATION ADVANCE OF RS.5 15 000/- AND ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 3 RS.1 80 092/-. THUS THE TOTAL MOBILIZATION ADVANCE AS PER THE STATEMENT FILED BY THE ASSESSEE WAS TO THE TUNE OF RS.6 95 092/-. OUT OF THE SAID THE ENTRY OF RS.5 15 000/- WAS REVERSED AND THE REST OF THE ENTRIES WERE AGAINST CONSTRUCTION BILLS. THE AO FUR THER FOUND THAT OPENING DEBIT BALANCE IN THIS ACCOUNT WAS AT RS.27 86 865/- AND THE CLOSING DEBIT BALANCE WAS AT RS.98 82 388/-. THE T OTAL CREDIT BALANCE SHOWN AT RS.78 07 321/-. THE AO MADE THE ANALYSIS I N THIS REGARD AND FOUND THAT THE ASSESSEE WAS NOT ABLE TO RECONCI LE THE RECEIPTS TO THE EXTENT OF RS.8 01 195/- FROM THAT COMPANY. THE AO ADDED THE AMOUNT ACCORDINGLY BY REJECTING THE BOOK RESULTS. T HE ASSESSEE EXPLAINED BEFORE THE LEARNED CIT(A) THAT BVML HAS M ADE THE PAYMENT OF RS.80 76 810/- AGAINST THE WORK AND MOBI LIZATION ADVANCES AND DEDUCTED TDS ON 73 63 972/- I.E. FOR T HE LESSER AMOUNT. COPY OF THE ACCOUNT OF BVML AND MOBILIZATIO N ADVANCE ACCOUNT OF THE PARTY WAS FILED. THE AO HOWEVER DID NOT VERIFY THE SAME AND WORKED OUT THE DIFFERENCE. IT WOULD THERE FORE SHOW THAT THE AO HAS TREATED THE ACCOUNTED RECEIPTS AS THE SU PPRESSED RECEIPTS WHICH ARE WHOLLY UNJUSTIFIED. THIS FACT WI LL FURTHER ESTABLISH THAT THE IMPUGNED ADDITION IS MADE EVEN THOUGH THER E IS NO DISCREPANCY IN THE WORK RECEIPTS AS PER MOBILIZATIO N ADVANCE OF BVML. THE LEARNED CIT(A) ON CONSIDERATION OF THE A BOVE FACTS AND EXPLANATION OF THE ASSESSEE NOTED THAT THERE IS NO DISPUTE THAT THERE EXISTED DISCREPANCY IN THE RECEIPTS SHOWN BY THE AS SESSEE FROM THAT COMPANY IN ITS BOOKS OF ACCOUNT VIS--VIS THE PAYME NTS SHOWN IN THE TDS CERTIFICATES. THE ASSESSEE WAS DIRECTED TO RECO NCILE THE SAME AND SUPPLEMENT THE FIGURES BUT NO RECONCILIATION ST ATEMENT IS FILED AND THE FINDING GIVEN BY THE AO HAS NOT BEEN CONTRO VERTED. THE ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 4 LEARNED CIT(A) IN THE ABSENCE OF RECONCILIATION STA TEMENT NOTED THAT THE ASSESSEE OUGHT TO HAVE FILED RECONCILIATION STA TEMENT ALONG WITH DETAILS OF BILLS SHOWING THE APPROVED WORK AND THE RECEIPT OF THE PAYMENTS AGAINST THEM. THE LEARNED CIT(A) ACCORDING LY CONFIRMED THE ADDITION ON WHICH THE ASSESSEE RAISED GROUND NO .2. 4.1 THE AO FURTHER FOUND THAT THE ASSESSEE HAS DISC LOSED RS.1 04 26 081/- AS CONTRACT RECEIPTS FROM CPL DUR ING THE RELEVANT PERIOD AS AGAINST RS.1 06 79 243/- AGAINST TDS CERT IFICATES. THE DIFFERENCE WAS OF RS.2 53 162/- AND EXPLANATION OF THE ASSESSEE WAS CALLED FOR. THE ASSESSEE EXPLAINED THAT THE DIFFERE NCE IS OF RS.1 36 802/- MAINLY ON ACCOUNT OF SERVICE TAX. SIN CE NO RECONCILIATION WAS FILED OF THE AMOUNT OF RS.1 16 3 63/- THE ADDITION WAS ACCORDINGLY MADE OF THIS AMOUNT BY REJECTING TH E BOOK RESULTS. THE ASSESSEE SUBMITTED BEFORE THE LEARNED CIT(A) TH E RECONCILIATION WHICH IS NOTED AT PAGE 8 OF THE IMPUGNED ORDER AND THE ASSESSEE FILED COPY OF THE ACCOUNTS ALSO TO EXPLAIN THAT THE AO HAS OMITTED TO CONSIDER ENTRIES OF THE SERVICE TAX TOTALING IN A S UM OF RS.1 52 160/-. HENCE THE ADDITION IS WHOLLY UNJUSTIFIED. THE LEAR NED CIT(A) HOWEVER DID NOT ACCEPT THE CONTENTION OF THE ASSES SEE BECAUSE NO DATES HAVE BEEN MENTIONED AGAINST THE SAME AND THAT NO CONFIRMATION IS FILED. THIS GROUND WAS ACCORDINGLY REJECTED ON WHICH THE ASSESSEE HAS RAISED GROUND NO.3. ON REJECTION O F BOOKS OF ACCOUNT ON BOTH THE ADDITIONS THE ASSESSEE RAISED GROUND NO.1. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 5 THOUGH COMPLETE DETAILS WERE FILED BEFORE THE AUTHO RITIES BELOW BUT THE RECONCILIATION AS REQUIRED COULD NOT BE FILED DUE TO THE DATA COULD NOT BE COMPILED WITH. HE HAS NOW FILED ANNEXURE 1 2 AND 3 WHICH IS RECONCILIATION STATEMENT SHOWING THE AMOUNT AS PER TDS CERTIFICATES AND CORRESPONDING ENTRIES IN THE ACCOUNTS WITH REGA RD TO BVML AND SUBMITTED THAT THE SAME IS SUPPORTED BY THE DOCUMEN TS FILED IN THE PAPER BOOK AT PAGES 4 6 7 43 90 AND 113. THE LE ARNED COUNSEL FOR THE ASSESSEE THEREFORE SUBMITTED THAT THERE IS NO DISCREPANCY LEFT IN THE RECONCILIATION. WITH REGARD TO THE ADDITION MADE WI TH REGARD TO CPL HE HAS SUBMITTED THAT RECONCILIATION STATEMENT IS F ILED IN ANNEXURE -4 WHICH IS RECONCILED AND IT IS CLAIMED THAT CERTAIN ENTRIES IN SERVICE TAX WERE OMITTED TO BE CONSIDERED BY THE AO. THE DETAIL S OF THE SAME ARE FILED AT PAGES 21 TO 24 OF THE PAPER BOOK. HE HAS THEREFORE SUBMITTED THAT SINCE COMPLETE RECONCILIATION IS FIL ED THEREFORE ADDITION IS LIABLE TO BE DELETED. THE LEARNED COUNS EL FOR THE ASSESSEE SUBMITTED THAT SINCE BOTH THE RECONCILIATIONS ARE FILED AT THE STAGE OF SECOND APPEAL THEREFORE THE MATTER MAY B E REMANDED TO THE AO FOR VERIFICATION OF THE RECONCILIATION STATE MENTS. THE LEARNED DR HAS NO OBJECTION IF THE MATTER MAY BE REMANDED T O THE FILE OF THE AO FOR VERIFICATION OF THE RECONCILIATION STATEMENT S NOW FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE. 6. ON CONSIDERATION OF THE SUBMISSIONS OF THE PARTI ES AND IN THE LIGHT OF THE MATERIAL ON RECORD WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. IT IS NOT IN DISPUTE THAT THERE EXISTED DISCREPANCIES IN THE RECEIPTS SHOWN B Y THE ASSESSEE COMPANY IN ITS BOOKS OF ACCOUNT AND THE PAYMENTS SH OWN IN THE TDS ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 6 CERTIFICATES WITH REGARD TO BVML. SIMILARLY WITH R EGARD TO THE DIFFERENCE IN THE CONTRACT RECEIPTS OF CPL IT WAS F OUND THAT THE DIFFERENCE WAS ON ACCOUNT OF CERTAIN FIGURES OMITTE D TO BE CONSIDERED IN THE SERVICE TAX. THE LEARNED CIT(A) CONFIRMED TH E ADDITION BECAUSE THE ASSESSEE HAS FAILED TO FILE RECONCILIATION STAT EMENT WITH REGARD TO THE DETAILS OF PAYMENT SHOWING APPROVED WORK AND TH E RECEIPTS OF PAYMENT AGAINST THEM AS WELL AS THE DETAILS OF THE SERVICE TAX WHICH HAVE NOT BEEN DISCLOSED. IT WOULD THEREFORE SHOW THAT IN THE ABSENCE OF ANY RECONCILIATION AND FACTUAL FOUNDATIO N THE ADDITIONS WERE CONFIRMED BY THE LEARNED CIT(A). HOWEVER THE LEARNED COUNSEL FOR THE ASSESSEE HAS BEEN ABLE TO FILE THE RECONCILIATION STATEMENTS ON BOTH THE GROUNDS NO.2 AND 3 IN ANNEXURES 1 2 3 AN D 4 WHICH PRIMA FACIE SUPPORT THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THERE IS NO DISCREPANCY. HOWEVER THESE ANNEXU RES 1 TO 4 WERE ADMITTEDLY NOT FILED BEFORE THE AO THEREFORE THE SAME REQUIRE VERIFICATION AT THE LEVEL OF THE AO. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THESE I SSUES TO THE FILE OF THE AO WITH DIRECTION TO RE-DECIDE THESE GROUNDS A ND ISSUES BY CONSIDERING THE RECONCILIATION STATEMENTS FILED BY THE ASSESSEE BEFORE US IN ANNEXURE 1 TO 4 AND THE SUPPORTING DOCUMENTS REFERRED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE PAPER BOOK. THE ASSESSEE IS DIRECTED TO FILE COPIES OF THE ANNEXURE 1 TO 4 AND THE RELEVANT DOCUMENTS FILED IN THE PAPER BOOK BEFORE THE AO FOR HIS VERIFICATION. THE AO SHALL RE-DECIDE THESE ISSUES BY GIVING REASO NABLE SUFFICIENT OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. REJEC TION OF BOOKS OF ACCOUNTS IS DEPENDENT MAINLY ON RECONCILIATION OF T HE TDS FIGURES AND SERVICE TAX. THEREFORE THE SAME WOULD ALSO BE CONSIDERED BY THE ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 7 AO WHILE DECIDING THE ABOVE ISSUES. IN THE RESULT GROUNDS NO.1 2 AND 3 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. ON GROUND NO.4 THE ASSESSEE CHALLENGED THE ADDI TION OF RS.2 92 115/- AS UNACCOUNTED WORK RECEIPTS OF NANDA N EXIM (IN SHORT NEL). THE AO NOTED FROM THE DETAILS FILED BY THE AS SESSEE THAT IT DISCLOSED RS.22 08 260/- AS CONTRACT RECEIPTS FROM NEL DURING THE RELEVANT PERIOD AS AGAINST RS.25 00 375/- SHOWN BY THE ASSESSEE COMPANY IN TDS CERTIFICATES ISSUED TO THE ASSESSEE. THERE WAS A DIFFERENCE OF RS.2 92 115/-. THE ASSESSEE FILED EXP LANATION TO SHOW THAT IT HAD RECEIVED RS.22 08 620/- ONLY FROM THAT PARTY DURING THE RELEVANT PERIOD. REPLY OF THE ASSESSEE WAS NOT FOUN D SATISFACTORY KEEPING IN VIEW THE FACT THAT TDS CREDIT WAS CLAIME D ON THE AMOUNT OF RS.25 00 375/- AND NO RECONCILIATION WAS FILED. THE ASSESSEE MADE A CLAIM OF LOWER RECEIPTS AS COMPARED TO THE FIGURE S GIVEN IN THE TDS CERTIFICATES. THE CERTIFICATES ISSUED BY NEL DID NO T MATCH WITH THE RECEIPTS DISCLOSED IN THE RETURN OF INCOME. BOOK RE SULTS WERE ACCORDINGLY REJECTED AND ADDITION OF RS.2 92 115/- WAS MADE. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT PROVISIONA L BILL WAS SU9BMITTED OF RS.25 00 375/- WITHOUT MEASUREMENT AN D WITHOUT FINALIZATION OF SOME RATES. THE PARTY HAS CERTIFIED AND APPROVED THE PAYMENT OF RS.22 08 260/- ONLY. THE PARTY HAS ALSO DEDUCTED TAX ON THE PROVISIONAL BILL. THE AO MADE ADDITION WRONGLY. THE LEARNED CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSE E AND NOTED THAT THE TDS WAS CLAIMED ON THE PAYMENT OF RS.25 00 375/ - FROM NEL AND THAT THE ASSESSEE HAS NOT VOLUNTARILY CAME FORWARD TO CLAIM EXCESS ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 8 ALLEGED TDS. THE LEARNED CIT(A) NOTED THAT ONCE BIL L IS RAISED OF THE FULL AMOUNT AND THE AMOUNT OF RS.2 92 115/- WAS REC EIVABLE FROM THAT PARTY IN THE FINAL ACCOUNTS THEREFORE ADDITION IS CORRECTLY MADE. THIS GROUND OF APPEAL OF THE ASSESSEE WAS ACCORDINGLY DI SMISSED. 8. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO LEDGER ACCOUNT OF NEL AND CERTIFICATE ISSUED BY THE PART Y COPIES OF WHICH ARE FILED AT PB 25 TO 29 OF THE PAPER BOOK TO SHOW THAT TDS WAS DEDUCTED ON PROVISIONAL AMOUNT BUT ACTUAL PAYMENT W AS MADE BY THAT PARTY OF RS.22 08 260/- AND THE SAME AMOUNT WA S ALSO CERTIFIED BY THE PARTY IN ITS CERTIFICATES PB 27. HE HAS THE REFORE SUBMITTED THAT ADDITION IS CLEARLY UNJUSTIFIED. HE HAS RELIED UPON THE ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF ITO VS HANS ROAD CAR RIERS PVT. LTD. IN ITA NO. 1972/AHD/2007 DATED 31-8-2010. 9. ON THE OTHER HAND THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE THE ASSE SSEE MADE CLAIM OF HIGHER RECEIPTS IN THE TDS CERTIFICATES THEREFO RE THE ADDITION IS RIGHTLY MADE BY THE AO AND CORRECTLY CONFIRMED BY T HE LEARNED CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL AVAILABLE ON RECORD. ADDITION IS MADE BY THE AO WHI LE NOTING FROM THE TDS CERTIFICATES THAT NEL HAS SHOWN FINAL PAYMENT T O THE ASSESSEE IN A SUM OF RS.25 00 375/- ON WHICH TDS WAS DEDUCTED IN A SUM OF RS.51 873/- . COPIES OF THE SAME ARE FILED AT PB 28 AND 29 WHICH ARE TDS CERTIFICATES AND COPY OF THE ACCOUNT OF THE PAR TY. HOWEVER NEL ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 9 CERTIFIED IN LEDGER ACCOUNT PB 27 THAT IN FACT TOTA L PAYMENTS HAVE BEEN MADE TO THE ASSESSEE IN A SUM OF RS.22 08 260/ -. M/S. NEL ALSO CERTIFIED THAT THOUGH THE BILL OF HIGHER AMOUN T WAS MADE FINAL PAYMENT WAS APPROVED IN A SUM OF RS.22 08 260/- AND THE SAME AMOUNT HAS ALSO BEEN PAID TO THE ASSESSEE. THE ABOV E CERTIFICATES ON RECORD SUPPORT THE CONTENTION OF THE ASSESSEE TH AT IT HAD RECEIVED ONLY THE LOWER AMOUNT WHICH IS SHOWN TO THE REVENUE DEPARTMENT. THUS NOTHING WAS RECEIVABLE FROM THAT PARTY AFTER SETTLEMENT OF THE FINAL ACCOUNT AND NO AMOUNT OF RS.2 92 115/- WAS DU E AGAINST NEL. THE INCOME TAX ACT PROVIDES CHARGING OF TAX ON REAL INCOME EARNED BY THE ASSESSEE. THE AUTHORITIES BELOW HOWEVER MAD E THE ADDITION OF THE HYPOTHETICAL RECEIPTS WHICH IS NEVER RECEIVE D BY THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RIGHTLY C ONTENDED THAT SINCE HIGHER TDS WAS DEDUCTED IT WOULD BENEFIT ONLY THE ASSESSEE AND IT WOULD NOT UNDER-STATE THE AMOUNT RECEIVED BY THE ASSESSEE. THESE FACTS CLEARLY SHOW THAT ADDITION IS TOTALLY U NJUSTIFIED ON THE MATTER OF THE AMOUNT WHICH WAS NEVER DUE OR RECEIVE D BY THE ASSESSEE ON ACCOUNT OF THE CONTRACT. ITAT AHMEDABAD BENCH IN THE CASE OF ITO VS HANS ROAD CARRIERS PVT. LTD. (SUPRA) HELD IN PARA 5 AND 5.1 AS UNDER: 5. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH AND ALSO CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIE S BELOW IN THE LIGHT OF A SHORT COMPILATION FILED AND THE C ASE LAW CITED. THE SHORT LEGAL ISSUE BEFORE US IS THAT WHE THER THE RECEIPTS SHOWN AS PER THE TDS CERTIFICATE IS THE IN COME OF THE ASSESSEE TO BE TAXED WHOLLY WITHOUT ANY ADJUSTM ENTS. TO ANSWER THIS LEGAL QUESTION WE HAVE EXAMINED THE NATURE OF BUSINESS ACTIVITY OF THE ASSESSEE AND IT WAS FOUND THAT THE ASSESSEE-COMPANY IS CARRYING ON ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 10 TRANSPORTATION BUSINESS. BROADLY SPEAKING TWO TYPES OF BUSINESS ACTIVITY BEING CARRIED OUT BY THE ASSESSEE ONE SUPPLY OF ITS OWN TRUCKS ON HIRE FOR TRANSPORTATIO N OF GOODS AND THE HIRE CHARGES ARE CREDITED IN THE BOOK S SECOND TRUCKS ARE ARRANGED FOR THE CUSTOMERS ON COMMISSION BASIS AND THE PAYMENTS WERE BEING MADE DIRECTLY BY THE CUSTOMER TO THE TRUCK-OWNERS AND TH E ASSESSEE ONLY OBTAINED COMMISSION. IT WAS EXPLAINE D TO REVENUE AUTHORITIES THAT THOUGH AS PER THE TDS CERTIFICATE THE AMOUNT MENTIONED WAS RS.34 24 868/ - ON WHICH TDS OF RS.35 482/- WAS DEDUCTED BUT ON THOSE TRANSACTIONS THE ASSESSEE HAD RECEIVED ONLY COMMISS ION OF RS.500/- PER TRUCK. THEREFORE THE FACTS HAVE R EVEALED THAT THE TDS WAS DEDUCTED ON THE WHOLE AMOUNT OF FREIGHT ON TRUCKS SUPPLIED THROUGH ASSESSEE BUT SAI D AMOUNT HAD AN OVER-RIDING RIGHT OF THE TRUCK-OWNERS THEREFORE DIRECTLY DIVERTED TO THEIR RESPECTIVE ACC OUNTS. ON CAREFUL EXAMINATION OF THE STATUTORY PROVISIONS TO ANSWER THIS LEGAL QUESTION IT IS EVIDENT THAT THE DEDUCTION OF TAX AT SOURCE IS NOT A LEVY OF TAX UNLESS AND UNTIL IT IS FOLLOWED BY AN ASSESSMENT ORDER MAK ING A CHARGE OF TAX. EVEN THIS IS ALSO A SETTLED POSITION THAT THE DEDUCTION OF TAX AT SOURCE IN NO WAY EXPRESSLY INDI CATES THAT IPSOFACTO THE ASSESSEE IS ENTITLED FOR THE REF UND OR ADJUSTMENT OF TAX OF THE TDS AMOUNT AGAINST THE INC OME MENTIONED THEREIN. THE DEDUCTION OF TAX IS NOT A LEVY OF TAX. DEDUCTION OF TAX AT SOURCE IS MERELY ONE OF T HE MODE OF COLLECTION OF TAX. THE AMOUNT ON WHICH TDS IS DEDUCTED IS SUBJECT TO CHARGE AS PER THE PROVISIONS OF THE ACT. THERE ARE FEW INSTANCES WHICH CAN FURTHER EL ABORATE THIS VIEW. FOR EXAMPLE THE RECIPIENT MAINTAINS AC COUNT ON CASH BASIS WHICH MAY NOT MATCH WITH THE AMOUNTS CERTIFIED IN THE TDS CERTIFICATE DUE TO THE REASON THAT THE DEDUCTOR HAS MAINTAINED THE ACCOUNT ON MERCANTILE B ASIS. NATURALLY THE DEDUCTOR WILL DEDUCT THE TAX ON ACCRU AL BASIS HOWEVER THE RECIPIENT SHALL DISCLOSE THE INCOME ON RECEIPT BASIS . IN THIS SITUATION THERE SHALL ALWAYS BE A MISMATCH BETWEEN THE AMOUNT OF RECEIPT AS PER TDS CERTIFICATE AND THE TAXABLE INCOME OFFERED BY THE ASSESSEE. DUE TO THIS REASON THE STATUTE HAS CLA RIFIED ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 11 THAT IT IS NOT NECESSARY THAT THE RECEIPTS ON WHICH TAX WAS DEDUCTED AS PER TDS CERTIFICATE SHOULD BE OFFERED T O TAX IN THE SAME ASSESSMENT YEAR AS PER THE DATES MENTIO NED IN THE TDS CERTIFICATE. THIS IS ONE OF THE FEW EXA MPLES HOWEVER ONE MORE EXAMPLE CAN ALSO BE CITED. THER E CAN BE AN INSTANCE THAT THE TDS WAS DEDUCTED ON THE INCOME WHICH MAY NOT BE SUBJECT TO TAX AT ALL SUCH AS ELIGIBLE FOR DEDUCTION U/S.10A ETC. SO THE DEDUCTION OF TAX ON AN INCOME DOES NOT IPSO FACTO DECLARE THAT T HE AMOUNT REFERRED IN THE TDS CERTIFICATE IS SUBJECT T O TAX ON THE WHOLE FIGURE THAT TOO ON THE SAME YEAR MENTIONED IN THE CERTIFICATE . AN OBSERVATION AT THIS STAGE CAN BE MADE THAT THE PROVISIONS RELATING TO T AX DEDUCTION AT SOURCE ARE NOT THE PROVISIONS FOR THE COMPUTATION OF INCOME. AN INCOME OF A TAXPAYER IS NOT REQUIRED TO BE COMPUTED MERELY WITH REFERENCE TO TH E TDS CERTIFICATE BUT ASSESSMENT OF AN INCOME IS ALTOGETHER AN INDEPENDENT EXERCISE. WITH THIS UNDERSTANDING OF LAW IF WE COMPARE THE FACTS OF TH E CASE AND THEN IT IS EVIDENT THAT THE AMOUNT WHICH WAS CE RTIFIED ON THE TDS CERTIFICATE COULD OR COULD NOT HAVE BEEN SUBJECT TO TAX IN THE HANDS OF THE ASSESSEE-RECIPIE NT. THE DEDUCTOR HAD CHOSEN A SAFE PROCEDURE OF DEDUCTI ON OF TAX ON THE ENTIRE AMOUNT OF FREIGHT. OTHERWISE THE FREIGHT WAS TO BE PAID TO THE TRUCK OWNERS AND NOT TO THE ASSESSEE-COMPANY WHO IS ONLY A CONDUIT IN ARRANGI NG THE HIRING OF THE TRUCKS. THE FREIGHT WAS TO BE P ASSED ON TO THE TRUCKS OWNERS THEREFORE THE FREIGHT WAS NO T SUBJECT TO TAX IN THE HANDS OF THE ASSESSEE. NEVERTHELESS ACCOUNTS OF THE ASSESSEE HAVE ALSO DEMONSTRATED THE SAME. WITH THE RESULT THE AMOUNT ON WHICH THE TD S WAS DEDUCTED HAD NOT MATCHED WITH THE FIGURES OF TH E INCOME DISCLOSED BY THE ASSESSEE IN RESPECT OF THOS E TRANSACTIONS. SUCH A BUSINESS TRANSACTION CAN BE DEALT WITH IN TWO WAYS; I.E. EITHER TO BE TREATED AS THE RECEIPTS WITH OVERRIDING LIABILITY OR SECONDLY THAT THE FREIGHT RECEIPTS WERE SUBJECT TO THE EXPENDITURE OF FREIGHT CHARGES TO BE PAID TO THE TRUCK-OWNERS. ON APPRECIA TION OF THE FACTS THE TRANSACTION IN QUESTION HAD FALLE N IN FIRST CATEGORY. IN VIEW OF ABOVE OBSERVATION THE GROUND OF THE ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 12 REVENUE HAS NO LEGAL STAND THEREFORE DESERVES TO BE REJECTED. ADDITIONALLY A DECISION OF THIS CO-ORDI NATE BENCH HAS ALSO BEEN CITED IN THE CASE OF SHUSHILADE VI ANILKUMAR SINGHAL REPORTED AS (2008) 10 DTR (AHD)(T RIB) 558; RELEVANT PORTION IS REPRODUCED BELOW:- IN OUR CONSIDERED OPINION THE PROVISIONS OF DEDUCTION OF TDS HAVE BEEN BROUGHT IN THE STATUTE TO FACILITATE THE COLLECTION OF TAX. IT IS NOT THE INTENTION OF THE LEGISLATURE THAT THE CREDIT FOR A PORTION OF TDS DEDUCTED AND PAID IS NEVER GRANTED. IN THE INSTANT CASE IT IS ADMITTED BY THE REVENUE THAT THE AMOUNT OF THE TDS COVERED BY TDS CERTIFICATES IN QUESTION COULD NOT BE GRANTED TO TR UCK OPERATORS/OWNERS AS THE RELEVANT TDS CERTIFICATES STAND IN THE NAME OF THE ASSESSEE AND NOT IN THEIR NAME. THUS CREDIT AGAINST THE ABOVE TDS CAN BE GRANTED TO THE ASSESSEE ALONE. FURTHER THE SAID TDS RELATES TO THE BUSINESS TRANSACTIONS OF THE ASSESSEE OF THE YEAR UNDER APPEAL AND THE ASSESSEE HAS DULY DISCLOSED HER INCOME RELATING TO THE TRANSACTIONS REPRESENTED BY THE SAID CERTIFICAT ES FORT THE YEAR UNDER APPEAL. THERE IS NO MATERIAL O N RECORD TO SHOW THAT THE AMOUNT OF TDS WAS NOT DEDUCTED FORM THE ASSESSEE AND IT WAS BORNE BY SOMEBODY ELSE. THE ONLY DISPUTE IS THAT THE ASSESSEE INSTEAD OF SHOWING RECEIPT OF FULL FREIGHT AND THEN SHOWING THE FREIGHT PAID TO TRUCK OPERATORS/OWNERS HAS SHOWN ONLY THE DIFFERENCE BETWEEN THE AFORESAID TWO AMOUNTS AS HERE INCOME AS BECAUSE THE PAYMENTS OF FREIGHT WERE DIRECTLY COLLECTED BY THE TRUCK DRIVERS. IN OUR CONSIDERED OPINION THIS IS SIMPLY A MATTER OF PRESENTATION OF ACCOUNTS AND MERELY FOR NOT PRESENTING IN THE ACCOUNTS THE AMOUNT OF THE GROSS FREIGHT AND THEN FREIGHT PAID TO TRUCK OPERATOR/OWNER SEPARATELY TH E CLAIM OF TDS CANNOT BE DENIED TO THE ASSESSEE ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 13 5.1. THE VIEW EXPRESSED BY THE RESPECTED CO-ORDINAT E BENCH ALSO BUTTRESS OUR HUMBLE UNDERSTANDING OF LAW AS ALSO SUPPORTS THE REASONS ASSIGNED HEREINABOVE HE NCE RESULTANTLY WE FIND NO FORCE IN THE GROUND OF THE R EVENUE THEREFORE HEREBY DISMISSED. 11. CONSIDERING THE ABOVE FACTS IN THE LIGHT OF TH E ABOVE DECISION WE ARE OF THE VIEW THAT ADDITION IS CLEARLY UNJUSTI FIED. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND D ELETE THE ADDITION. IN THE RESULT GROUND NO.4 OF THE APPEAL OF THE ASS ESSEE IS ALLOWED. 12. ON GROUND NO.5 THE ASSESSEE CHALLENGED LEVY OF INTEREST U/S 234B OF THE IT ACT WHICH IS CONSEQUENTIAL IN NATURE AND IS ACCORDINGLY REJECTED. 13. NO OTHER POINT IS ARGUED OR PRESSED. 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-03-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 04-03-2011 LAKSHMIKANT/- ITA NO.218/AHD/2009 HETU CONSTRUCTION (P) LTD. VS ACIT (OSD) CIR-4 A HMEDABAD 14 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD