PENTATECH CONSTRUCTION P. LTD, MUMBAI v. ITO WD 10(2)(4), MUMBAI

ITA 4209/MUM/2009 | 2004-2005
Pronouncement Date: 31-05-2010 | Result: Allowed

Appeal Details

RSA Number 420919914 RSA 2009
Assessee PAN AAACP2088E
Bench Mumbai
Appeal Number ITA 4209/MUM/2009
Duration Of Justice 10 month(s) 23 day(s)
Appellant PENTATECH CONSTRUCTION P. LTD, MUMBAI
Respondent ITO WD 10(2)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 31-05-2010
Date Of Final Hearing 26-05-2010
Next Hearing Date 26-05-2010
Assessment Year 2004-2005
Appeal Filed On 08-07-2009
Judgment Text
ITA NO. 4209/MUM/2009 ASSESSMENT YEAR : 2004-05 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH MUMBAI BEFORE SHRI D.K. AGRAWAL (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO. 4209/MUM/2009 ASSESSMENT YEAR 2004-05 DATE OF HEARING 26.5.2010 PENTATECH CONSTRUCTION P. LTD. ......AP PELLANT C 8 SHREE DATTA GURU SOCIETY DEONAR VILLAGE ROAD DEONAR MUMBAI 400 088 PAN AAACP2088E VS. INCOME TAX OFFICER WARD 10(2)(4) .. RE SPONDENT AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 APPELLANT BY : SHRI M.A. GOHEL RESPONDENT BY : SHRI K.K. MAHAJAN O R D E R PER PRAMOD KUMAR: 1. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICA TE IN THIS APPEAL IS WHETHER OR NOT THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING TH E DISALLOWANCE OF RS.91 260/- OUT OF PURCHASES. THE ASSESSMENT YEAR INVOLVED IS 2004- 05 AND THE IMPUGNED ITA NO. 4209/MUM/2009 ASSESSMENT YEAR : 2004-05 PAGE 2 OF 5 ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE I NCOME TAX ACT 1961 (FOR SHORT 'THE ACT' ). 2. TO DECIDE THE ABOVE ISSUE ONLY A FEW MATERIAL FACT S NEED TO BE TAKEN NOTE OF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDING CONSTRUCTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A SSESSING OFFICER FOUND THAT WHILE THE ASSESSEE HAS SHOWN PURCHASES OF RS.3 5 31 041/- FROM PRAKASH ENGINEERS & CONSTRUCTION CO. THE SAID VENDOR HAS C ONFIRMED SALES OF ONLY RS.34 39 787. WHEN ASSESSEE WAS CALLED UPON TO RECO NCILE THIS DIFFERENCE IT WAS EXPLAINED THAT THE DIFFERENCE IS ON ACCOUNT OF ADJUSTMENTS MADE IN PURCHASES FOR WEIGHT RATE AND SPECIFICATION VARIAT IONS. IT WAS ALSO SUBMITTED THAT DEDUCTIONS ON THIS ACCOUNT HAVE BEEN OFFERED T O TAX IN ASSESSMENT YEAR 2005-06 AS CORRESPONDING ADJUSTMENTS WERE MADE IN THE RELATED PREVIOUS YEAR. THIS SUBMISSION HOWEVER DID NOT IMPRESS THE ASSESSING OFFICER. HE NOTED THAT NOW THAT ASSESSEE HIMSELF HAS ACCEPTED T HE DIFFERENCE THE ADDITION OUGHT TO BE MADE IN THE ASSESSMENT YEAR IT SELF. HE ACCORDINGLY MADE THE DISALLOWANCE OF RS.91 260/- OUT OF PURCHAS ES. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BUT WITHOUT ANY SUCCES S. THE ASSESSEE IS NOW IN SECOND APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MA TERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 4. WE HAVE NOTED THAT THE DIFFERENCE IN AMOUNT FINALLY SETTLED AS REFLECTED BY THE VENDOR AND THE AMOUNT OF PURCHASE BILLS AS PER THE ASSESSEE HAS BEEN DULY ACCOUNTED FOR AND OFFERED T O TAX IN A SUBSEQUENT ASSESSMENT YEAR. WE HAVE ALSO NOTED THAT THERE IS N O DISPUTE ABOUT VALUE OF ITA NO. 4209/MUM/2009 ASSESSMENT YEAR : 2004-05 PAGE 3 OF 5 PURCHASES AS PER INVOICES AND BILLS AND IT IS AN UN DISPUTED POSITION THAT DIFFERENCE IS AN ACCOUNT OF ADJUSTMENTS MADE AT THE TIME OF SETTLEMENT OF BILLS. UNDER THESE CIRCUMSTANCES AND BEARING IN MI ND RELATIVE SMALLNESS OF AMOUNT AS WELL WE SEE NO REASONS TO DISTURB THE AC COUNTING TREATMENT BY THE ASSESSEE I.E. BOOKING PURCHASES AT INVOICE VAL UE AND ACCOUNTING FOR ADJUSTMENTS WHEN BILLS ARE FINALLY SETTLED. THE AUT HORITIES BELOW HAVE TAKEN TOO PEDANTIC A VIEW OF THE MATTER IN IMPLIEDLY REJE CTING THE ABOVE ACCOUNTING METHODS. IN ANY EVENT IT IS REVENUE NEUTRAL BECAUS E THE DIFFERENCE IS ACCOUNTED FOR IN THE YEAR IN WHICH PURCHASE BILLS W ERE SETTLED FOR PAYMENT. IN VIEW OF THESE DISCUSSIONS WE UPHOLD THE GRIEVAN CE OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE OF RS.19 260. THE ASSESSEE GETS THE RELIEF ACCORDINGLY . 5. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. PRONOU NCED IN THE OPEN COURT TODAY ON 31 ST DAY OF MAY 2010. SD/XX SD/XX (D.K. AGRAWAL) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 31 ST DAY OF MAY 2010. ITA NO. 4209/MUM/2009 ASSESSMENT YEAR : 2004-05 PAGE 4 OF 5 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) MUMBAI 4. COMMISSIONER (APPEALS) MUMBAI 5. DEPARTMENTAL REPRESENTATIVE C BENCH ITAT MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI ITA NO. 4209/MUM/2009 ASSESSMENT YEAR : 2004-05 PAGE 5 OF 5 DATE INITIAL 1. DRAFT DICTATED ON 26.5.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 28.5.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 28.5.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 28.5.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 28.5.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 31.5.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 31.5.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER