M/s. Dayanand Contractor, Rohtak v. Pr.CIT, Rohtak

ITA 2806/DEL/2016 | 2009-2010
Pronouncement Date: 30-11-2017 | Result: Allowed

Appeal Details

RSA Number 280620114 RSA 2016
Assessee PAN AADFD4239K
Bench Delhi
Appeal Number ITA 2806/DEL/2016
Duration Of Justice 1 year(s) 6 month(s) 13 day(s)
Appellant M/s. Dayanand Contractor, Rohtak
Respondent Pr.CIT, Rohtak
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-11-2017
Assessment Year 2009-2010
Appeal Filed On 17-05-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B : DELHI BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI L.P. SAHU ACCOUNTANT MEMBER ITA.NO.2806 & 2807/DEL./2016 ASSESSMENT YEARS 2009-2010 & 2010-2011 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. PAN AADFD4239K VS. THE PR. CIT AAYAKAR BHAVAN DELHI ROAD ROHTAK 124 001 HARYANA. (APPELLANT) (RESPONDENT) FOR ASSESSEE : S/SHRI GAUTAM JAIN PIYUSH KUMAR KAMAL & LALIT MOHAN ADVOCATES FOR REVENUE : MS. RACHNA SINGH CIT - D.R. DATE OF HEARING : 22.11.2017 DATE OF PRONOUNCEMENT : 30.11.2017 ORDER PER BHAVNESH SAINI J.M. BOTH THE APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST DIFFERENT ORDERS OF THE LD. PR. CIT ROHTAK DATED 3 0 TH MARCH 2016 FOR THE A.YS. 2009-2010 AND 2010-2011 CHALLENGING THE ORDER UNDER SECTION 263 OF THE I.T. ACT 1961. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. BOTH TH E PARTIES MAINLY 2 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. ARGUED IN A.Y. 2009-2010 AND HAVE STATED THAT THE I SSUE IS SAME IN A.Y. 2010-2011. THEREFORE FOR THE PURPOSE OF DISPO SAL OF BOTH THE APPEALS WE DECIDE THE APPEAL FOR THE A.Y. 2009-201 0 AS UNDER. ITA.NO.2806/DEL./2016 A.Y. 2009-2010 : 3. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE IS A FIRM. RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPE AL WAS NOT FILED BY THE ASSESSEE AS PRESCRIBED UNDER SECTION 139 OF THE I.T. ACT. THE A.O. RECORDED REASONS UNDER SECTION 147 OF THE I.T. ACT ON 2 ND NOVEMBER 2012 AND NOTICE UNDER SECTION 148 WAS ISS UED TO THE ASSESSEE-FIRM. IN RESPONSE TO NOTICE UNDER SECTION 148 ASSESSEE FILED RETURN OF INCOME ON 11 TH MARCH 2013 DECLARING TOTAL INCOME AT RS.2 15 986. THE CASE WAS SELECTED FOR SCRUTINY AND A.O. ISSUED QUESTIONNAIRE. THE ASSESSEE FURNISHED WRITTEN REPLY . THE A.O. FOUND THAT ASSESSEE IS DERIVING INCOME FROM CONTRACTOR-SH IP BUSINESS. VARIOUS DETAILS AS CALLED FOR WERE FILED. BOOKS OF ACCOUNT AND BILLS/ VOUCHERS WERE PRODUCED AND TEST-CHECKED BY THE A.O. THE A.O. AFTER DISALLOWING CERTAIN EXPENSES COMPUTED THE INCOME AT RS.3 66 860 VIDE ORDER DATED 21 ST FEBRUARY 2014 UNDER SECTION 147/143(3) OF THE I.T. ACT. 3 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. 3.1. THE LD. PR. CIT ROHTAK HOWEVER WAS NOT SATI SFIED WITH THE RE-ASSESSMENT ORDER AND ISSUED SHOW CAUSE NOTIC E UNDER SECTION 263 OF THE I.T. ACT DATED 28 TH JANUARY 2016 COPY OF WHICH IS FILED AT PAGE-47 OF THE PAPER BOOK. THE LD. PR. CIT ROHT AK ON PERUSAL OF THE RECORD FOUND THAT ASSESSEE IS BEING ASSESSED TO TAX SINCE 2001- 2002 ONWARDS IN THE STATUS OF INDIVIDUAL AS WELL AS FIRM HAVING PAN AJYPK7569F AND AADFD4239K RESPECTIVELY. IT WAS FOUN D THAT ASSESSEE-FIRM HAS NOT FILED RETURN OF INCOME ON TIM E. THEREFORE NOTICE UNDER SECTION 148 WAS ISSUED AND IN RESPONSE THERETO ASSESSEE FILED RETURN OF INCOME ON 11 TH MARCH 2013 DECLARING INCOME OF RS.2 15 986 IN THE STATUS OF FIRM CLAIMING REFUN D OF RS.26 47 006. THE A.O. PASSED THE RE-ASSESSMENT ORDER DATED 21 ST FEBRUARY 2014 ON TOTAL INCOME OF RS.3 66 860 BY CREATING A TOTAL DEMAND OF RS.46 618 AFTER ALLOWING TDS OF RS.66 741 AS APPEAR ING ON THE SYSTEM OF PAN AADFD4239K AND NET PAYABLE DEMAND WAS DETERMINED AT RS.62 331 FOR WHICH DEMAND NOTICE WAS ISSUED. THE LD. PR. CIT ALSO NOTED THAT THE SAID DEMAND IS STIL L OUTSTANDING. ON PERUSAL OF RECORD IT WAS REVEALED THAT ASSESSEE HA S FILED AN APPLICATION REQUESTING FOR REFUND OF RS.25 80 265 O N ACCOUNT OF TOTAL 4 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. TDS OF RS.26 47 006. THE ASSESSEE ENCLOSED FORM 16A ISSUED BY VARIOUS DDOS BUT THE AMOUNT OF TDS IS NOT VERIFIABL E ON THE SYSTEM OF THE REVENUE DEPARTMENT. ON PERUSAL OF THE FORM-1 6A REVEALS THAT PAN ON THESE FORM 16A IS MENTIONED AS AJYPK7569F WH ICH IS PAN OF INDIVIDUAL WHEREAS ASSESSMENT IN THIS CASE WAS COMPLETED ON THE FIRM HAVING SEPARATE PAN AADFD4239K FOR WHICH THE C ASE WAS REOPENED UNDER SECTION 148 OF THE I.T. ACT 1961. T HUS THE PAYMENT OF CONTRACT AND TDS DEDUCTED ON PAYMENT IS NOT VERI FIABLE FROM THE SYSTEM. ASSESSEE WAS REQUIRED TO PROVE THE GENUINEN ESS AND REASONABILITY OF THESE AMOUNTS OF DIFFERENCE WITH S UPPORTING DOCUMENTARY EVIDENCE. IT WAS NOTED IN THE NOTICE TH AT THE ORDER PASSED BY THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE CASE WAS FIXED FOR HEARING ON 9 TH FEBRUARY 2016. 3.2. AFTER ISSUE OF SHOW CAUSE NOTICE UNDER SECTIO N 263 OF THE I.T. ACT ABOVE EXPLANATION OF ASSESSEE WAS CALLED FOR AND THE ASSESSEE FILED EXPLANATION POINTING-OUT CERTAIN MIS TAKES IN THE NOTICE WHICH HAVE BEEN CORRECTED BY THE LD. PR. CIT IN THE IMPUGNED ORDER. THE ASSESSEE SUBMITTED BEFORE LD. PR. CIT THAT ASSE SSMENT IN THE STATUS OF FIRM ON THE INCOME EARNED ON CONTRACT ALL OTTED IN THE NAME 5 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. OF SHRI DAYANAND PARTNER WAS ALSO FRAMED SINCE A. Y. 2006-2007 AND THE CASES WERE DECIDED EVEN BY THE APPELLATE AU THORITIES LIKE CIT(A) AND ITAT. THE LD. PR. CIT HOWEVER DID NOT ACCEPT THE CONTENTION OF ASSESSEE AND FOUND THAT THE LD. CIT(A ) FARIDABAD VIDE ORDER DATED 23 RD FEBRUARY 2016 FOR THE A.Y. 2012-2013 HAS DISMISSED THE CLAIM OF ASSESSEE. THE LD. PR. CIT FO UND THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F MALABAR INDUSTRIAL CO. LTD. 243 ITR 83 IS DISTINGUISHABLE ON FACTS. THE LD. PR. CIT ALSO FOUND THAT IN ASSESSMENT YEAR UNDER AP PEAL ASSESSEE HAS DISCLOSED NET PROFIT OF RS.2 15 986 BUT IN SUBS EQUENT YEAR THE TURNOVER HAS INCREASED SUBSTANTIALLY BUT PROPER PRO FIT HAS NOT BEEN SHOWN. THE LD. PR. CIT ON PERUSAL OF 26AS ALSO FOUN D THAT SHRI DAYANAND-INDIVIDUAL IS HAVING PAN AAGPN3895C AND WA S HAVING INTEREST INCOME FROM SBI AMOUNTING TO RS.1 87 488 O N WHICH TDS OF RS.19 322 HAS ALSO BEEN DEDUCTED BY SBI. HOWEVER A SSESSEE-FIRM HAS CLAIMED THIS AMOUNT AGAINST PAN OF THE FIRM I.E . AADFD4239K. IT WAS ALSO NOTICED THAT SHRI DAYANAND-INDIVIDUAL F ILED RETURN OF INCOME IN HIS INDIVIDUAL CAPACITY BUT HAS NOT EXPLA INED HIS INTEREST INCOME. THE A.O. HAS FAILED TO EXAMINE THE TRANSACT ION MENTIONED IN 6 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. FORM 26AS. THE ASSESSMENT ORDER WAS THEREFORE FOUN D ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. TH E SAME WAS SET ASIDE AND A.O. WAS DIRECTED TO RE-FRAME THE ASSESSM ENT. 4. THE ASSESSEE IS IN APPEAL CHALLENGING THE ORDER UNDER SECTION 263 OF THE I.T. ACT. THE LEARNED COUNSEL FO R THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASS ESSEE IS A FIRM ENGAGED IN THE BUSINESS OF CIVIL CONTRACT AND ONE O F THE PARTNER OF THE FIRM SHRI DAYANAND HAD TAKEN THE CONTRACTS IN H IS NAME AND TRANSFERRED THE SAME TO THE ASSESSEE-FIRM. THE CONT RACTS WERE TRANSFERRED TO THE FIRM BY THE PARTNER IN TERMS OF CLAUSES OF THE PARTNERSHIP DEED. SINCE CONTRACTS WERE IN THE NAME OF PARTNER THE TDS WAS DEDUCTED IN THE NAME OF PARTNER BUT SINCE T HE CONTRACTS WERE TRANSFERRED TO FIRM THE TDS WAS ALSO TRANSFER RED TO THE FIRM. HOWEVER SINCE THE TDS WAS NOT MADE IN THE NAME OF THE FIRM THEREFORE IT DID NOT REFLECTED IN FORM NO.26AS OF THE FIRM. HE HAS SUBMITTED THAT THE A.O. REOPENED THE ASSESSMENT BEC AUSE OF THESE REASONS AND ASSESSED THE INCOME IN THE HANDS OF THE FIRM. PB-3 IS COMPUTATION OF INCOME OF THE ASSESSEE-FIRM AND PB-1 4 IS PROFIT AND 7 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. LOSS ACCOUNT SHOWING THE SAME FACTS IN RESPECT OF A SSESSMENT YEAR UNDER APPEAL. PB-97 IS PARTNERSHIP DEED DATED 1 ST APRIL 2002. THE CONTRACT WAS TAKEN BY ONE OF THE PARTNER SHRI DAYAN AND BUT ENTIRE WORK WAS EXECUTED BY THE ASSESSEE-FIRM. PB-5 IS PAN OF THE INDIVIDUAL MR. DAYANAND. IN PRECEDING ASSESSMENT YE AR ALSO SIMILAR INCOME IS EARNED IN THE HANDS OF THE ASSESSEE-FIRM AND TDS BENEFIT HAVE BEEN ALLOWED. IN ASSESSMENT YEAR UNDER APPEAL ALSO THE INCOME IS ASSESSED IN THE HANDS OF THE FIRM. IT IS NOT IN DISPUTE THAT THE ENTIRE CONTRACT WAS EXECUTED BY THE FIRM. HE HAS SU BMITTED THAT WHEN INCOME IS ASSESSED IN THE HANDS OF THE FIRM C ORRESPONDING BENEFIT OF THE TDS DEDUCTED SHOULD HAVE BEEN ALLOWE D IN THE HANDS OF THE FIRM. HE HAS SUBMITTED THAT IN A.Y. 2012-201 3 THE LD. CIT(A) FARIDABAD VIDE ORDER DATED 23 RD FEBRUARY 2016 DECIDED THE ISSUE AGAINST THE ASSESSEE ON THE SAME FACTS BY NOT ALLOW ING THE TDS DEDUCTION IN THE HANDS OF THE FIRM BUT THE ORDER HA S BEEN SET ASIDE BY THE ITAT DELHI BENCH IN THE CASE OF THE SAME AS SESSEE IN ITA.NO.2027/DEL./2016 VIDE ORDER DATED 16 TH OCTOBER 2017. COPIES OF THE ORDERS ARE FILED AT PAGES 109 AND 129 OF THE PAPER BOOK. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON RULE OF 8 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. CONSISTENCY BE APPLIED AND THE ORDER UNDER SECTION 263 IS BAD IN LAW. THE A.O. HAS TAKEN A POSSIBLE VIEW IN THE MATT ER TO WHICH THE LD. PR. CIT ROHTAK DID NOT AGREE WOULD NOT GIVE RI SE TO INITIATE PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT AND R ELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F MALABAR INDUSTRIAL CO. LTD. VS. CIT 243 ITR 83. LEARNED CO UNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ISSUE OF ENHANC EMENT OF INCOME ON ACCOUNT OF NP AND INTEREST WAS NOT SUBJECT MATTE R OF NOTICE UNDER SECTION 263 OF THE I.T. ACT AS WELL AS INTEREST EAR NED BY THE INDIVIDUAL AND TDS DEDUCTED BY SBI IS ALSO NOT CLAIMED BY THE ASSESSEE-FIRM IN THEIR COMPUTATION OF INCOME FILED AT PAGE-14 OF THE PB. HE HAS SUBMITTED THAT SHOW CAUSE NOTICE UNDER SECTION 263 WAS GIVEN ONLY ON TDS ADJUSTMENT. THEREFORE THE OTHER ITEMS TAKEN -UP IN THE IMPUGNED ORDER WOULD NOT SURVIVE UNDER LAW. HE HAS THEREFORE SUBMITTED THAT ASSESSMENT ORDER PASSED BY THE A.O. IS NOT ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTERESTS OF THE RE VENUE. HE HAS RELIED UPON THE FOLLOWING DECISIONS. 9 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. 4.1. IN THE CASE OF CIT VS. NIRAV MODI 390 ITR 292 (BOM.) - WHICH HAS BEEN AFFIRMED BY THE HONBLE SUPREME COUR T REPORTED IN (2017) 77 TAXMANN.COM 15 (SC) - IN WHICH IT HAS BEE N HELD AS UNDER: WHERE ASSESSING OFFICER AFTER MAKING PROPER AND DE TAILED ENQUIRIES TOOK A VIEW THAT AMOUNT RECEIVED BY ASSE SSEE AS GIFT FROM HIS RELATIVES WAS A GENUINE TRANSACTION IMPUG NED REVISIONAL ORDER PASSED BY COMMISSIONER DIRECTING A SSESSING OFFICER TO ENQUIRE INTO CAPACITY OF DONORS AND TO D ECIDE ABOUT GENUINENESS OF GIFT AFRESH WAS NOT SUSTAINABLE. 4.2. IN THE CASE OF DIRECTOR OF INCOME TAX VS. JYO TI FOUNDATION (2013) 357 ITR 388 (DEL.) IN WHICH IT HAS BEEN HELD AS UNDER : WHERE REVISIONARY AUTHORITY OPINED THAT FURTHER IN QUIRY WAS REQUIRED SUCH INQUIRY SHOULD HAVE BEEN CONDUCTED B Y REVISIONARY AUTHORITY HIMSELF TO RECORD FINDING THA T ASSESSMENT ORDER PASSED BY ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO REVENUE. 10 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. 4.3. IN THE CASE OF INCOME TAX OFFICER VS. D.G. HO USING PROJECTS LTD. (2012) 343 ITR 329 (DEL.) IN WHICH IT HAS BE EN HELD AS UNDER : WHERE COMMISSIONER HAD DOUBTS ABOUT VALUATION AND SALE CONSIDERATION RECEIVED IN COMPUTATION OF CAPITAL LO SS BUT HE HAD NOT EXAMINED SAID ASPECT HIMSELF ORDER OF REMIT CO ULD NOT BE PASSED BY COMMISSIONER ASKING ASSESSING OFFICER TO DECIDE WHETHER ORDER WAS ERRONEOUS. 4.4. IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DLF LTD. (2013) 350 ITR 555 (DEL.) IN WHICH IT HAS BEEN HEL D AS UNDER : WHERE DISALLOWANCE OF EXPENDITURE FOR EXEMPTED INC OME WAS DEBATABLE AND ORDER OF ASSESSING OFFICER COULD NOT BE HELD AS UNSUSTAINABLE REVISIONARY POWERS COULD NOT BE EXER CISED. 5. ON THE OTHER HAND THE LD. D.R. STRONGLY RELIED UPON THE IMPUGNED ORDER UNDER SECTION 263 OF THE I.T. ACT AN D SUBMITTED THAT THE ASSESSMENT ORDER IS PERFUNCTORY AND DID NOT DIS CLOSE THE RELEVANT FACTS. THE A.O. IS BOTH INVESTIGATOR AND AN ADJUDIC ATOR. IF THE A.O. AS AN ADJUDICATOR DECIDES A QUESTION OR ASPECT AND MAK ES WRONG ASSESSMENT WHICH IS UNSUSTAINABLE IN LAW IT CAN BE CORRECTED BY THE 11 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. COMMISSIONER IN EXERCISE OF REVISIONAL POWERS. THE LD. D.R. SUBMITTED THAT THE A.O. IN THE QUESTIONNAIRE DID NO T ASK FOR VERIFICATION OF THE TDS. THE LD. D.R. SUBMITTED THA T SINCE THE A.O. DID NOT CONDUCT ENQUIRY ON THE ASPECT OF THE TDS MA TTER AND PASSED THE ORDER WITHOUT APPLYING MIND THEREFORE ASSESSM ENT ORDER IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE LD. D.R. RELIED UPON THE FOLLOWING DECISIONS : (I) CIT VS. JAWAHAR BHATTACHARJEE (2012) 341 ITR 43 4 (GAU.) (HC) (FB). (II) MALABAR INDUSTRIAL CO. LTD. 243 ITR 83 (SC) (III) PRATAP FOOTWEAR VS. ACIT (2003) SOT 638 (JABA LPUR) (TRIB.) (IV) CIT VS. NAGESH KNITWEAR PRIVATE LTD. (2012) 3 45 ITR 135 (DEL.) (V) GEE VEE ENTERPRISES VS. ADDL. CIT DELHI-1 (197 5) 99 ITR 375. (VI) RAMPYARI DEVI SARAOGI VS. CIT (1968) 67 ITR 84 (SC) (VII) NIIT VS. CIT (CENTRAL) (2015) 60 TAXMANN.COM 313. 5.1. THE LD. D.R. THEREFORE SUBMITTED THAT LD. PR . CIT CORRECTLY SET ASIDE THE RE-ASSESSMENT ORDER AND DIRECTED THE A.O. TO FRAME ASSESSMENT AFTER DUE ENQUIRY. 12 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. THE W HOLE ISSUE IS REVOLVING AROUND THE CLAIM OF TDS MADE BY THE AS SESSEE FOR CLAIMING REFUND. ACCORDING TO THE REVENUE DEPARTMEN T THE INDIVIDUAL PARTNER OF THE ASSESSEE-FIRM HAD TAKEN A CONTRACT WHICH HE HAS TRANSFERRED TO THE ASSESSEE-FIRM. ONCE TDS C ERTIFICATE IS ISSUED IN THE NAME OF THE INDIVIDUAL THEN REFUND IS TO BE CLAIMED BY THE INDIVIDUAL AGAINST THE TDS. THE ASSESSEE HOWEVE R CLAIMED THAT THE ENTIRE CONTRACT WORK WAS TRANSFERRED TO THE FIR M AND ENTIRE WORK AS PER CONTRACT HAVE BEEN EXECUTED BY THE FIRM. ACC ORDING TO THE ASSESSEE THE SAME SYSTEM WAS ACCEPTED BY THE REVEN UE DEPARTMENT IN EARLIER YEAR AS WELL AS IN SUBSEQUENT YEAR. LEAR NED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE WAS CONSIDERED I N DETAIL IN A.Y. 2012-2013 BY LD. CIT(A) FARIDABAD VIDE ORDER DATED 23 RD FEBRUARY 2016 BUT CLAIM OF THE ASSESSEE HAS NOT BEEN ACCEPTE D BECAUSE IT WAS DIRECTED THAT REFUND IF ANY AS PER TDS SHALL HAVE TO BE CLAIMED BY THE INDIVIDUAL PARTNER. HOWEVER THE ORDER OF THE L D. CIT(A) DATED 23 RD NOVEMBER 2016 FOR A.Y. 2012-2013 HAVE BEEN SET ASI DE BY THE ITAT DELHI BENCH IN THE CASE OF ASSESSEE IN ITA.NO.2027/ 2016 DATED 16 TH 13 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. OCTOBER 2017. THE ENTIRE ORDER OF THE TRIBUNAL IS REPRODUCED AS UNDER : IN THE INCOME TAX APPELLATE TRIBUNAL DELHI SMC BENCH NEW DELHI BEFORE SHRI B.P. JAIN ACCOUNTANT MEMBER ITA NO. 2027/DEL/2016 [A.Y. 2012-13] DAYANAND CONTRACTOR VS. ITO C/O. N.C.GARG CA WARD-1 MAL GODAM ROAD ROHTAK ROHTAK PAN : AADFD4239K [APPELLANT] [RESPONDENT] DATE OF HEARING : 10.10.2017 DATE OF PRONOUNCEMENT : 16.10.2017 ASSESSEE BY : SHRI GAUTAM JAIN & SH. LALIT M OHAN CA REVENUE BY : SHRI T. VASANTHAN SR. DR ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LD. CIT(A)- FARIDABAD VIDE ORDER DATED 23.02.2016 FOR ASSESSMEN T YEAR 2012-13. 2. THE ASSESSEE HAS RAISED FOLLOWING ADDITIONAL GROUNDS OF APPEAL: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN NOT DIRECTING THE LEARNED AS SESSING OFFICER TO INCLUDE 14 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. THE INCOME FROM CONTRACT WORK DECLARED BY THE APPEL LANT IN THE RETURN OF INCOME FURNISHED BY THE APPELLANT FOR THE INSTANT A SSESSMENT YEAR. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FAILED TO APPRECIATE THAT MERE FACT THAT ALLOTMENT OF CONTRAC T DOES NOT BRING ABOUT ANY LIABILITY TO TAXABILITY THE INCOME FROM CONTRACT IN THE HANDS OF ENTITY EXECUTING THE CONTRACT AND ON THE CONTRARY ONCE A CONTRACT HA S BEEN EXECUTED BY PARTNERSHIP FIRM UNDER THE DEED OF PARTNERSHIP THEN SUCH INCOME HAS TO BE ASSESSED IN THE HANDS OF FIRM. 3. THAT THE FINDING THAT IT IS A CASE OF SUB-CONTR ACT AND WHENEVER THERE IS A SUB-CONTRACT THE CONTRACTOR GIVING THE CONTRACTS H AS TO ONCE AGAIN DEDUCT TAX WHICH HAS NOT BEEN DONE BY THE PARTNER OF THE FIRM SH. DAYANAND WHEN THE CONTRACT IN QUESTION HAVE BEEN TRANSFERRED TO THE F IRM AND AS SUCH THE ONLY COURSE OF ACTION AS PER THE LAW IS TO FILE THE RETU RN OF INCOME OF SH. DAYANAND AND CLAIMED THE REFUND IS FACTUALLY INCORRECT LEG ALLY MISCONCEIVED AND UNTENABLE. 3. APART THE ABOVE ADDITIONAL GROUNDS THE ASSES SEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE DENIAL OF CREDIT OF TDS OF RS. 13 01 041/- ON THE INCOME DECLARED AND ASSESSED IN THE HANDS OF THE APPELLANT FIRM ON THE BASIS THAT TDS HAS NOT BEEN D EDUCTED IN THE NAME OF APPELLANT BUT IN THE INDIVIDUAL CAPACITY OF THE PARTNER OF THE APPELLANT. 1.1 THAT THE REASONING THE GIVEN BY THE LEARNED COM MISSIONER OF INCOME TAX (APPEALS) THAT IF ANY REFUND IS TO BE C LAIMED BY THE APPELLANT AGAINST THIS TDS THEN ONLY COURSE OF ACT ION AS PER LAW IS TO FILE THE RETURN OF INCOME SH. DAYANAND AND CLAIM TH E REFUND IS WHOLLY ERRONEOUS MISCONCEIVED AND UNTENABLE. 1.2 THAT VARIOUS ADVERSE FINDINGS RECORDED IN THE O RDERS OF AUTHORITIES BELOW ARE FACTUALLY INCORRECT LEGALLY MISCONCEIVED CONTRARY TO RECORD AND THUS UNTENABLE. 15 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. 4. IN BRIEF THE FACTS OF THE CASE ARE THAT THE APP ELLANT IS A FIRM ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. IT F ILED ITS RETURN DECLARING INCOME OF RS. 7 90 480/- ON 26.09.2012 WI TH A TDS OF RS. 13 01 041/-. THE CASE WAS SELECTED FOR SCRUTINY ON T HE BASIS OF THE MISMATCH BETWEEN THE TDS SHOWN IN AS26 AND IN THE R ETURN FILED BY THE APPELLANT. DURING THE COURSE OF APPELLATE PROCEEDING S THE APPELLANT WAS ASKED TO RECONCILE THESE DIFFERENCES IN THE RETURN THE APPELLANT HAS SHOWN AT TOTAL INCOME OF RS.7 90 480/- WITH THE TDS OF RS.13 01 041/- AND NO REFUND WAS CLAIMED IN THE RETURN. HOWEVER IN T HE COMPUTATION OF INCOME SUBSEQUENTLY FILED BY THE APPELLANT THE APPELL ANT HAS CLAIMED A REFUND OF RS.10 42 130/- ON ACCOUNT OF TDS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT STATED THAT T HE DIFFERENCE BETWEEN FORM NO. 26AS AND THE BUSINESS RECEIPTS (CONTRACTOR PAYMENTS) OF RS.7 99 45 009/- WAS ON ACCOUNT OF THE FACT THAT ONE OF THE PARTNERS IN THE FIRM (DAYANAND) HAD TAKEN THE CONTRACTS IN HIS NAME AND TRANSFERRED THE SAME TO THE FIRM. THE CONTRACTS WERE TRANSFERRE D TO THE FIRM BY THE PARTNER IN TERMS OF CLAUSE 1 OF THE PARTNERSHIP DEED . SINCE THE CONTRACTS WERE IN THE NAME OF THE PARTNER THE TDS WAS DEDUCTE D IN THE NAME OF THE PARTNERS BUT SINCE THE CONTRACTS WERE TRANSFERRE D TO THE FIRM THE TDS WAS ALSO TRANSFERRED TO THE FIRM. HOWEVER SINCE TH E TDS WAS NOT MADE IN THE NAME OF THE FIRM THEREFORE IT DID NOT REFLECT IN THE FORM AS 26 OF THE FIRM. THE AO IN HIS ORDER AFTER SEEKING THE DIR ECTIONS OF THE ADDL. COMMISSIONER OF INCOME TAX UNDER SECTION 144A HAS DI SALLOWED THE CREDIT OF THE TDS DEDUCTED IN THE NAME OF THE PARTNER TO TH E FIRM. THE PRESENT APPEAL IS AGAINST THIS ACTION OF THE AO. BESIDES TH IS THE AO IN HIS ORDER HAS MADE AN ADDITION OF RS.2 41 563/- AS THE INTERE ST RECEIVED BY THE 16 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. APPELLANT ON ACCOUNT OF INCOME TAX REFUND AND NOT DI SCLOSED IN THE RETURN OF INCOME WHICH IS ALSO THE SUBJECT MATTER OF THIS A PPEAL. 5. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 6. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES PERUSED THE ORDERS OF THE A.O AND THE LD. CIT(A) AN D THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. G ROUND 1 & 1.2 CHALLENGE THE DENIAL OF CREDIT OF TDS OF RS.13 01 041/- ON THE INCOME DECLARED AND ASSESSED IN THE HANDS OF THE APPELLANT FIRM ON THE BASIS THAT T DS HAS NOT BEEN DEDUCTED IN THE NAME OF THE APPELLANT BUT IN THE INDI VIDUAL CAPACITY OF THE PARTNER OF THE APPELLANT. ALSO ADDITIONAL GROUN DS HAVE BEEN RAISED TO INCLUDE THE INCOME DECLARED FROM CONTRACT WORKS I N THE RETURN OF INCOME FURNISHED BY THE APPELLANT FOR THE INSTANT AS SESSMENT YEAR. AT THE OUTSET CONTRACT HAS BEEN ASSIGNED TO THE ASSESS EE FIRM BY THE PARTNER WHICH FACT IS ALSO ACCEPTED BY THE LEANED CIT (A) I N HIS ORDER AT PAGE 8 WHEREIN HE HELD AS UNDER: II) WHENEVER A CONTRACT IS GIVEN TO ANOTHER PARTY BY THE PARTY WHICH HAS OBTAINED THE CONTRACT (SUB-CONTRACT) PROVISIONS OF TDS KICK IN ONCE AGAIN. THAT IS TO SAY THAT WHENEVER THERE IS A SUB-CONTRAC T THE CONTRACTOR GIVING THE CONTRACTS HAS TO ONCE AGAIN DEDUCT TAX. APPAREN TLY THIS HAS NOT BEEN DONE BY THE PARTNER OF THE FIRM SH. DAYANAND WHEN THE CONTRACT IN QUESTION HAVE BEEN TRANSFERRED TO THE FIRM. 7. AFTER ACCEPTANCE OF THE FACT THAT SH. DAYANA ND HAS TRANSFERRED THE CONTRACT TO FIRM LEARNED CIT (A) OUGHT TO HAVE DIR ECTED THE ASSESSMENT OF THE INCOME IN THE HANDS OF THE FIRM AND ALSO ALL OWED THE CREDIT OF TDS. FURTHER THE FINDINGS OF THE LEARNED CIT(A) THAT WHE NEVER THERE IS A SUB- CONTRACT THE CONTRACTOR GIVING THE CONTRACTS HAS T O ONCE AGAIN DEDUCT TAX WHICH IS INCORRECT AND AGAINST THE PRINCIPLES OF LA W AS THE APPELLANT FIRM 17 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. CANNOT BE CONSIDERED AS THE SUB-CONTRACTOR OF SH. DA YANAND. IN THE CASE OF HINDUSTAN RATNA JV VS. ITO REPORTED IN [2014] 42 TAXMANN.COM 107 (HYDERABAD-TRIB.) (PAGE 73-84 OF PAPER BOOK) IT HAS BEEN HELD AS UNDER: 22. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERIN G THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE RELATIONSH IP CREATED BY THE PARTNERSHIP DEED DATED 31 ST AUGUST 2007 AND PARTNERS CANNOT BE CONSIDERED AS SUB- CONTRACTORS OF THE FIRM AND THEY ARE JOINTLY AND SE VERALLY LIABLE TOWARDS THE OWNERS FOR THE EXECUTION OF THE CONTRACT COMMITMENT S IN ACCORDANCE WITH THE CONTRACT CONDITIONS. BEING SO THE PROVISIONS OF SE CTION 194C CANNOT BE ATTRACTED SO AS TO TREAT THEM AS SUB-CONTRACTORS OF THE FIRM THEREBY INVOKING THE PROVISIONS OF SECTION 40(A)(IA). IN OTHER WORDS WE CAN SAFELY CONCLUDE THAT THERE IS NO SUB- CONTRACT BETWEEN JV AND THE CONSTITUENTS AND SINCE THE JV HAS BEEN FORMED ONLY TO PROCURE CONTRACT WORKS FROM THE GOVERNMENT AND T HE CONTRACT IS BEING EXECUTED BY THE CONSTITUENTS PARTNERS IN THEIR SHAR ING RATIO 60:40 AS PER THE TERMS OF THE JV IT CANNOT BE SAID THAT THE JV IS A CONTRACTOR AND ITS CONSTITUENTS ARE SUB-CONTRACTORS. ACCORDINGLY WE ET ASIDE THE O RDERS OF THE REVENUE AUTHORITIES AND DELETE THE DISALLOWANCE OF RS.1 11 09 23 018/- MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SEC TION 40(A)(IA) OF THE ACT. 8. IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESS EE THAT ONCE THE CONTRACT IS OBTAINED IN THE NAME OF INDIVIDUAL BUT EX ECUTED BY PARTNERSHIP FIRM UNDER THE DEED OF PARTNERSHIP THEN SUCH INCOME H AS TO BE ASSESSED IN THE HANDS OF THE FIRM. IN THE CASE OF ITO VS. MANIKARNIKA DEVI SINGH REPORTED IN 98 TAXMAN 32 (JAB)(MAG) (PAGE 115 OF PAP ER BOOK) IT HAS BEEN HELD AS UNDER: ONCE THE REVENUE HAD ITSELF ACCEPTED THAT THE CONT RACT WORK WAS EXECUTED BY THE FIRM AND THE INCOME WAS EARNED BY T HE FIRM THE ONLY QUESTION REMAINED WHETHER THE FIRM BE ASSESSED AS R EGISTERED FIRM OR UNREGISTERED FIRM. IT WAS NOT IN DISPUTE THAT THE A SSESSEE MADE ALL THE NECESSARY COMPLIANCE REQUIRED FOR GETTING THE REGIS TRATION AS PER SECTION 185. IN K.D. KAMATH & CO. V. CIT [1971] 82 ITR 680 THE S UPREME COURT HELD THAT 18 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. THE FACT THAT THE EXCLUSIVE POWER AND CONTROL BY A GREEMENT OF THE PARTIES IS VESTED IN ONE PARTNER AND THE FURTHER CIRCUMSTANCE S THAT ONLY ONE PARTNER CAN OPERATE THE BANK ACCOUNTS OR BORROW ON BEHALF OF TH E FIRM IS NOT DESTRUCTIVE OF THE THEORY OF PARTNERSHIP PROVIDED TWO ESSENTIAL CO NDITIONS ARE SATISFIED NAMELY (I) THAT THERE SHOULD BE AN AGREEMENT TO SHARE PROF ITS AND LOSSES OF THE BUSINESS OF THE FIRM AND (II) THAT THE BUSINESS MUST BE CAR RIED ON BY ALL THE PARTNERS OR ANY OF THEM ACTING FOR ALL. THE ABOVE DECISION WAS SQUARELY APPLICABLE IN THE CASE OF THE ASSESSEE AS IN THE INSTANT CASE ALS O THERE WAS AN AGREEMENT TO SHARE THE PROFIT AND LOSS OF THE BUSINESS OF THE FIRM. THE BUSINESS WAS CARRIED ON BY ALL THE PARTNERS THOUGH THE CONTRACT WORK WAS IN THE NAME OF ONE OF THE PARTNERS. THEREFORE THE DY. COMMISSI ONER (APPEALS) WAS FULLY JUSTIFIED IN ALLOWING REGISTRATION TO THE ASSESSEE- FIRM 9. ABOVE FINDINGS ARE SUPPORTED BY THE CIRCULAR NO. 7/2016 ISSUED BY CBDT PLACED AT PAGE 96 -97 OF THE PAPER BOOK. DENIAL OF CREDIT OF TDS OF RS. 13 01 041/- IS OTHERWISE AGAINST THE PRI NCIPLE OF CONSISTENCY. IN ANOTHER IDENTICAL CASE OF M/S RAN BIR SINGH HAVING PAN NO. AAJFR9966M THE LEARNED ASSESSING OFFICER ALLOWE D AND ISSUED THE REFUND IN THE STATUS OF THE FIRM FOR THE TDS/TCS DED UCTED IN THE NAME OF ONE OF PARTNER NAMELY SH. RANBIR SINGH . A COPY OF THE ORDER OF ASSESSMENT DATED 10.12.2010 IN THE CASE OF M/S RANBIR SINGH HA VING PAN NO. AAJFR9966M IS PLACED AT PAGES 45-47 OF PAPER BOOK A LONGWITH COPY OF ORDER OF GRANTING INTEREST ON SAID REFUND AT PAGES 4 4 OF PAPER BOOK. THE AFORESAID POSITION IS ACCEPTED IN PRECEDING ASSESSM ENT YEARS IN ASSESSEES OWN CASE. THE ASSESSING OFFICER AT LAST PAGE OF THE ORDER OF ASSESSMENT HAS HELD AS UNDER: I) AS PER BACK GROUND OF THE CASE THE ASSESSEE IS BEING ASSESSED TO TAX FOR THE LAST 15 YEARS IN HIS INDIVIDUAL STAT US AND SINCE 2002 ONWARDS IN THE STATUS OF FIRM ALSO. 19 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. 10. RELIANCE IN SUPPORT OF THE PRINCIPLE OF CONSIST ENCY WAS PLACED ON THE FOLLOWING JUDGMENTS: I) 358 ITR 295 (SC) CIT VS. EXCEL INDUSTRIES LTD. II) 308ITR 161 (SC) CIT VS. J. K. CHARITABLE TRUST III) 266ITR 99 (SC) CIT V. BERGER PAINTS IV) 394 ITR 449 (SC) GODREJ & BOYCE MANUFACTURING COMPAN Y LTD. VS. DCIT. 11. RELIANCE WAS ALSO PLACED ON THE FOLLOWING: THAT MERE ALLOTMENT OF CONTRACT DOES NOT BRING ABOU T ANY LIABILITY TO TAX THE INCOME FROM CONTRACT IN THE HANDS OF ENTITY IN WHOSE NAME CONTRACT IS ALLOTTED AND NOT EXECUTING THE CONTRACT. I) ITA NO. 7698/M/2010 A.Y. 2007-08SMC AMBIKA JV V. IT O (PAGES 58-65 OF PAPER BOOK) II) 53 SOT 220 (HYD) MEIL SEW MAYTAS BHEL (JV) V. ITO (PAGES 66-72 OF PAPER BOOK) III) ITA NO.44/2013 (BOM) CIT V. SMSL-UANRCL (JV) (PAGES 85-89 OF PAPER BOOK) IV) 374 ITR 35 (DEL) CIT V. ORIENTAL STRUCTURAL ENGINEE RS (P)LTD. (PAGES 90-95 OF PAPER BOOK) V) 39 DTR 217 (DEL) CIT VS. ORIENTALSTRUCTURAL ENGINEE RS(P) LTD. (PAGES 55-57 OF PAPER BOOK) VI) 166 TTJ 612 (HYD.) M/S HINDUSTAN RATNA JV VS.ITO (PAGES 73-84 OF PAPER BOOK) 20 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. VII) CIRCULAR NO.7/2016 ISSUED BY CBDT (PAGES 48 SOT 178 (VISAKHAPATNAM) ITO VS. UAN RAJU CONSTRUCTION 31 DTR 49 (HP) CIT VS . AMBUJA DARIA KASHLOG MANGU TRANSPORT COOP SOCIETY VII) 48 DTR 130(HP) CIT VS. SIRMOUR TRUCK OPERATORS UNIO N VIII) 240 CTR 325 (P&H) CIT VS. GREWAL BROTHERS IX) 248 ITR 339 (AAR) VAN OORD ACZ BV X) 124 ITR 192 (BOM) CIT VS. BRITISH DRUG HOUSES (INDI A)P. LTD XI) ITA NO(S) 1280/PN/2006 (A.Y. 2003-04) 60/PN/2009 ( A.Y. 2005-06) 177 AND 178/PN/2008 (A.Y. 2002-03 AND 200 4-05 ITO VS. RAJDEEP & PMCC INFRASTRUCTURE XII) ITA NO. 65/PN/2011 (AY 2007-08) M/S GAMMON PROGRESS IVE-JV 55 DTR 417 (CAL) PANNA LAI KEJRILAL VS. CIT XIII) 314 ITR 343 (AAR) HYOSUNG CORPORATION XIV) 210 TAXMAN 49 (MAD)(MAG) CHENNAI PORT TRUST V. ITO 12. ONCE INCOME IS REQUIRED TO BE ASSESSED TDS CRED IT HAS TO BE ALLOWED IRRESPECTIVE OF THE FACT THAT THE TDS IS DEDUCTED IN THE NAME OF THE ANOTHER PERSON. I) 357 ITR 396 (AP) CIT VS. BHOORATNAM II) ITA NO. 2417/KOL/2013 MR. PARMANAND TIWARI VS. ITO OF PAPER BOOK) III) ITA NO. 99/HYD/2010 ITO VS. M/S LIMAK DEVI SINGH 13. ANY INCOME COULD NOT BE TREATED TO BE TAXABLE J UST BECAUSE TAX AT SOURCE HAS BEEN DEDUCTED ON IT. 21 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. I) 73 TAXMANN.COM 166 (MUM) ABB SWITZERLAND LTD. VS. ADIT(IT) (PAGE 116-127 OF PAPER BOOK) 14. IN ANY CASE NO ADDITION CAN BE MADE ON THE BAS IS OF FORM 26 AS AIR INFORMATION AS HAS BEEN HELD IN THE FOLLOWING JUDGM ENTS: I) ITA NO. 4679/D/2012 ASSESSMENT YEAR 2009-10 DATED 3 1.3.2015 ITO V. SH. BASANT KUMAR. II) ITA NO. 253/AGRA/2013 DATED 27.6.2014 ITO V DEVENDR ANATH DWIVEDI ITA NO. 5125/MUM/2013 DATED 10.4.2015 M/S K RONER INVESTMENTS LTD VS DCIT. III) ITA NO. 735/D/2015 DATED 2.8.2016 VIKAS YADAV V. IT O IV) 58 SOT 135 (CUT) (URO) GOBINDPADA BHANJA CHOWDHURY V. ITO V) 36 TAXMANN.COM 371 (GUJ) VAGHIBHAI V. BISHNOI V. IT O VI) 352 ITR 273 (DEL) COURT ON ITS OWN MOTION V. CIT VII) 365 ITR 143 (ALL) RAKES KUMAR GUPTA V. UOI VIII) ITANO. 1331/D/2015 PRAVEEN KUMAR JAIN V ITO DATED 22.1.2015 IX) ITA NO. 3534/D/2014(DEL TRI) MUNNI DEVI VS ITO68 ST O 197 (DEL) BIR BAHADUR SINGH SIJAWALI X) 57 ITR 532 (SC) PARIMISETTI SETHARAMAMMA VS. CIT XI) 159 ITD 329 (ASR) SH. AMRIK SINGH VS ITO XII) 108 ITD 115(AGRA) SARAF GRAMODYOG SANSTHAN VS ITO XIII) ITANO. 3873/D/2016 XIV) ASSESSMENT YEAR 2009-10 DATED 23.01.2017 ZAHID HASS AN 15 IN VIEW OF THE ABOVE THE ADDITIONAL GROUND T HAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN NOT DIRECTING THE LEARNED ASSESSING OFFICER TO I NCLUDE THE INCOME FROM 22 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. CONTRACT WORK DECLARED BY THE APPELLANT IN THE RETUR N OF INCOME FURNISHED BY THE APPELLANT FOR THE INSTANT ASSESSMENT YEAR IS DIRECTED TO BE ALLOWED AND TDS IS ALSO DIRECTED TO BE ALLOWED. THUS THE GRO UNDS OF THE ASSESSEE ARE ALLOWED. 16. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. 6.1. THE ABOVE ORDER OF THE TRIBUNAL CLEARLY SHOW THAT THE ISSUE IS IDENTICAL IN THE CASE OF THE ASSESSEE IN THE PRE SENT PROCEEDINGS UNDER SECTION 263 OF THE ACT WHICH HAVE ALREADY BEE N DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. THE TRIBUNAL IN THIS YEAR HAS ALSO MENTIONED THAT IN COMPARABLE CASES OF SHRI RANBIR S INGH THE A.O. ALLOWED TDS BENEFIT ON IDENTICAL FACTS. IT WAS ALSO NOTED THAT THE SAME POSITION HAS BEEN ACCEPTED BY THE REVENUE DEPARTMEN T IN PRECEDING ASSESSMENT YEARS. THEREFORE THE ISSUE IS COVERED I N FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT DELHI BENCH DATE D 16 TH OCTOBER 2017. COPY OF THE ASSESSMENT ORDER IN THE COMPARABL E CASE OF SHRI RANBIR SINGH IS ALSO FILED IN THE PAPER BOOK. THE A BOVE FACTS CLEARLY SHOW THAT THE ISSUE OF CLAIM OF REFUND OF TDS GRANT ED IN THE NAME OF THE INDIVIDUAL HAVE ALSO BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE CASE OF THE ASSESSEE. IT MAY ALSO BE NOTED AT THE C OST OF THE REPETITION THAT THERE IS NO DISPUTE THAT INCOME IS ASSESSABLE/ TAXABLE IN THE 23 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. HANDS OF THE ASSESSEE-FIRM. IT IS ALSO NOT IN DISPU TE THAT THE ASSESSEE-FIRM EXECUTED THE ENTIRE CONTRACT TAKEN BY THE INDIVIDUAL PARTNER. ONCE THE INCOME IS TAXABLE IN THE HANDS OF THE ASSESSEE- FIRM OF THE CONTRACT TAKEN IN THE NAME OF INDIVIDUA L THERE IS NO QUESTION OF DENYING THE BENEFIT OF TDS DEDUCTION TO THE ASSESSEE- FIRM WHICH WAS GRANTED IN THE NAME OF SHRI DAYANAND -INDIVIDUAL. TDS IS DEDUCTED ON PAYMENT WHICH IS RECEIPT OF ASSE SSEE-FIRM WHICH IS TAXABLE IN THE HANDS OF FIRM. IT CANNOT BE EXCLU DED. THE A.O. IN THIS CASE HAS INITIATED THE RE-ASSESSMENT PROCEEDIN GS UNDER SECTION 147 OF THE I.T. ACT SOLELY ON THE REASON THAT THE A SSESSEE DID NOT FILE THE RETURN OF INCOME ON TIME IN THE NAME OF THE FIR M. THE A.O. AFTER EXAMINING THE BOOKS OF ACCOUNT AND DETAILS PRODUCED BEFORE HIM AND AS PER HISTORY OF THE ASSESSEE ASSESSED THE INCOME IN THE HANDS OF THE ASSESSEE-FIRM. THE LD. PR. CIT IN THE SHOW CAUS E NOTICE UNDER SECTION 263 OF THE ACT AS WELL AS IN THE IMPUGNED O RDER DID NOT DISPUTE THIS FACT THAT INCOME IS ASSESSABLE IN THE HANDS OF THE ASSESSEE FOR THE CONTRACT WHICH HAS TAKEN IN THE NA ME OF THE INDIVIDUAL. THE DISPUTE IS ONLY OF THE REFUND CLAIM ED BY THE ASSESSEE. THEREFORE IN SUCH CIRCUMSTANCES WHEN ENTIRE INCOM E IS ASSESSED IN 24 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. THE HANDS OF THE ASSESSEE-FIRM AND HAVE NOT BEEN DI SPUTED IN THE IMPUGNED ORDER ASSESSEE HAS RIGHTLY MADE CLAIM FOR REFUND OF THE AMOUNT DEDUCTED AS TDS IN THE NAME OF THE INDIVIDUA L. THE RULE OF CONSISTENCY THEREFORE CLEARLY APPLY IN THE CASE O F THE ASSESSEE AND THERE SHOULD NOT HAVE BEEN ANY REASON FOR THE PR. C IT TO INVOKE JURISDICTION UNDER SECTION 263 OF THE I.T. ACT. WE RELY UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F RADHA SWAMY SATSUNG VS. CIT (1992) 93 ITR 321. THE HONBLE SUPR EME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT ( 2000) 243 ITR 83 HELD THAT WHERE TWO VIEWS ARE POSSIBLE AND A.O. HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE THE SAI D ORDER CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE I NTERESTS OF THE REVENUE UNLESS VIEW TAKEN BY THE A.O. IS UNSUSTAIN ABLE IN LAW. IN THE CASE OF THE ASSESSEE IN PRECEDING ASSESSMENT Y EARS AS WELL AS IN SUBSEQUENT YEARS SIMILAR CLAIM OF ASSESSEE HAS BEE N ALLOWED AND EVEN THE TRIBUNAL ALLOWED THE CLAIM OF ASSESSEE FOR A.Y. 2012-2013. THE A.O. IN A COMPARABLE CASE OF SHRI RANBIR SINGH (SUPRA) HAS ACCEPTED THE SIMILAR CLAIM OF THE ASSESSEE. THEREFO RE IF THE A.O. IN THE PRESENT ASSESSMENT ORDER ACCEPTED THE CLAIM OF ASSESSEE FOR 25 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. REFUND OF THE TAX BASED ON TDS CERTIFICATE ISSUED I N THE NAME OF THE INDIVIDUAL THE ORDER OF THE A.O. IS CLEARLY SUSTAI NABLE IN LAW. THE LD. D.R. HOWEVER CONTENDED THAT A.O. DID NOT APPLY HIS MIND TO THE FACTS OF THE CASE AS WELL AS PASSED A PERFUNCTORY ORDER. THE A.O. BEING AN INVESTIGATOR AND ADJUDICATOR SHOULD HAVE DECIDE TH E ISSUE IN THE LIGHT OF MATERIAL ON RECORD. WE DO NOT AGREE WITH T HE CONTENTION OF THE LD. D.R. BECAUSE IT IS NOT IN DISPUTE THAT INCOME E ARNED ON EXECUTION OF CONTRACT TAKEN IN THE NAME OF THE INDIVIDUAL IS ASSESSABLE IN THE HANDS OF THE ASSESSEE-FIRM. THERE IS NO QUESTION OF THE A.O. TO GO IN DETAIL OF THE INCOME EARNED BY THE ASSESSEE-FIRM BE CAUSE THE PR. CIT IN THE SHOW CAUSE NOTICE UNDER SECTION 263 AS WELL AS IMPUGNED ORDER DID NOT DISPUTE THE FACT THAT THE INCOME EARN ED OUT OF THE CONTRACT BUSINESS SHALL HAVE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE-FIRM. THEREFORE EVEN IF NO SPECIFIC QUEST ION IS ASKED FOR BY THE A.O. AT RE-ASSESSMENT STAGE BUT THE A.O. HAS C ORRECTLY ASSESSED THE INCOME IN THE HANDS OF THE ASSESSEE-FIRM AND TH E ASSESSMENT WAS REOPENED ONLY ON THE REASON THAT ASSESSEE-FIRM DID NOT FILE RETURN OF INCOME AS PRESCRIBED UNDER SECTION 139 OF THE I.T. ACT. THEREFORE THE CONTENTION OF THE LD. D.R. IS NOT AC CEPTABLE AND 26 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. ACCORDINGLY REJECTED. THE DECISIONS RELIED UPON BY THE LD. D.R. THEREFORE DO NOT APPLY TO THE FACTS AND CIRCUMSTAN CES OF THE CASE. 6.2. IT MAY ALSO BE NOTED HERE THAT THE LD. PR. CI T APART FROM ISSUE OF REFUND CLAIMED BY THE ASSESSEE AND MISMATC H OF THE INCOME AND THE TAX REFUND AS PER SYSTEM OF THE DEPARTMENT DID NOT RAISE THE ISSUE OF UNDERSTATED INCOME AS PER GROSS RECEIP TS AND NET PROFIT AND INTEREST FROM SBI IN THE SHOW CAUSE NOTICE. THE REFORE ON SUCH ITEMS THE PR. CIT IS NOT PERMITTED TO INVOKE THE JU RISDICTION UNDER SECTION 263 OF THE I.T. ACT OR TO PASS ORDER. IT MA Y BE NOTED HERE THAT THE PR. CIT WITHOUT GIVING NOTICE TO THE ASSESSEE H AS FOUND THAT THERE IS UNDERSTATED INCOME DISCLOSED BY THE ASSESSEE. IT IS WELL SETTLED LAW THAT ASSESSMENT CANNOT BE REVISED ON GROUND WHICH I S NOT MENTIONED IN THE SHOW CAUSE NOTICE. WE RELY UPON THE DECISION S OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KRISHAK BHARATI COO PERATIVE LTD. 3 95 ITR 572 AND CIT VS. CONTIMETERS ELECTRICALS (P.) LTD. (200 9) 317 ITR 249. FURTHER WHEN EXPLANATION OF ASSESSEE HAS NOT BEEN CALLED FOR THERE IS NO QUESTION OF TAKING ANY ADVERSE VIEW AGA INST THE ASSESSEE. FURTHER IF PR. CIT WAS OF THE VIEW THAT CONTRACT I NCOME IS UNDERSTATED THEN HE HIMSELF SHOULD HAVE CONDUCTED THE ENQUIRY 27 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. INTO THE MATTER AT THE REVISIONAL STAGE AND SHOULD HAVE CALLED FOR THE EXPLANATION OF ASSESSEE AND SHOULD HAVE GONE INTO T HE DETAILS AND THEN PASS SOME ORDER. IN SUCH CIRCUMSTANCES HE SHO ULD NOT HAVE RESTORE THE MATTER BACK TO THE FILE OF THE A.O. THE DECISION RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE CLEARLY SUP PORT THE SUBMISSIONS OF THE ASSESSEE. 7. AS REGARDS THE INTEREST EARNED OF RS.1 87 488 A ND TDS DEDUCTED BY SBI THE PR. CIT WAS OF THE VIEW THAT T HIS CLAIM HAS BEEN MADE AGAINST PAN OF THE ASSESSEE-FIRM. HOWEVER LEA RNED COUNSEL FOR THE ASSESSEE REFERRED TO PB-14 WHICH IS PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR UNDER APPEAL IN WHICH ASSESSEE DID NOT MAKE ANY SUCH CLAIM. FURTHER SUCH ISSUE WAS NOT RAISED IN THE SHOW CAUSE NOTICE UNDER SECTION 263 OF THE I.T. ACT. THEREFORE SUCH ISSUE CANNOT BE TAKEN IN ADVERSE AGAINST THE ASSESSEE IN THE IMP UGNED ORDER UNDER SECTION 263 OF THE I.T. ACT. 8. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCU MSTANCES IN THE LIGHT OF ABOVE DISCUSSION WE ARE OF THE VIEW T HAT THE ASSESSMENT ORDER PASSED BY THE A.O. IS IN ACCORDANCE WITH LAW IN WHICH NO INFIRMITY HAVE BEEN POINTED-OUT SO AS TO INVOKE JUR ISDICTION UNDER 28 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. SECTION 263 OF THE I.T. ACT. THE ASSESSMENT ORDER I S THEREFORE NOT ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDER OF LD. PR . CIT PASSED UNDER SECTION 263 OF THE I.T. ACT AND QUASH THE SAME. IN THE RESULT ORIGINAL RE-ASSESSMENT ORDER DATED 21 ST FEBRUARY 2014 IS RESTORED. 9. IN THE RESULT ITA.NO.2806/DEL./2016 FOR THE A. Y. 2009- 2010 OF THE ASSESSEE IS ALLOWED. ITA.NO.2807/DEL./2016 A.Y. 2010-2011 : 10. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIE S SUBMITTED THAT THE ISSUE IS SAME IN THIS YEAR AS HAS BEEN CON SIDERED IN PRECEDING A.Y. 2009-2010. WE FOLLOWING THE REASONS FOR DECISION FOR A.Y. 2009-2010 SET ASIDE THE IMPUGNED ORDER OF THE LD. PR. CIT ROHTAK PASSED UNDER SECTION 263 OF THE I.T. ACT AN D QUASH THE SAME. RESULTANTLY THE ORIGINAL ASSESSMENT ORDER PASSED U NDER SECTION 143(3)/147 IS RESTORED. 11. IN THE RESULT ITA.NO.2807/DEL./2016 FOR THE A .Y. 2010- 2011 OF THE ASSESSEE IS ALLOWED. 29 ITA.NO.2806 & 2807/DEL./2016 M/S. DAYANAND CONTRACTOR V & PO KHARAINTI DIST. ROHTAK. 12. TO SUM-UP BOTH THE APPEALS OF THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI DATED 30 TH NOVEMBER 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH DELHI 6. GUARD FILE. //BY ORDER // ASST. REGISTRAR ITAT DELHI BENCHES DELHI.