ITO WD 22(1)-4, NAVI MUMBAI v. PRANAM CONSTRUCTION CO., MUMBAI

ITA 5981/MUM/2010 | 2007-2008
Pronouncement Date: 30-12-2011 | Result: Dismissed

Appeal Details

RSA Number 598119914 RSA 2010
Assessee PAN AAFFP0777J
Bench Mumbai
Appeal Number ITA 5981/MUM/2010
Duration Of Justice 1 year(s) 5 month(s)
Appellant ITO WD 22(1)-4, NAVI MUMBAI
Respondent PRANAM CONSTRUCTION CO., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 30-12-2011
Date Of Final Hearing 28-12-2011
Next Hearing Date 28-12-2011
Assessment Year 2007-2008
Appeal Filed On 30-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI B. RAMAKOTAIAH A.M. AND SHRI V. DURGA RAO J.M. ITA NO. 5981/MUM/2010 ASSESSMENT YEAR: 2007-08 INCOME TAX OFFICER-22(1)4 APPELLANT VASHI RLY. STATION COMPLEX TOWER NO. 6 4 TH FLOOR VASHI NAVI MUMBAI. VS. PRANAM CONSTRUCTION CO. RESPONDENT 101 SMIT APARTMENT OGHADBHAI LANE GHATKOPAR (E) MUMBAI 77. (PAN AAFFP0777J) APPELLANT BY : MR. O.P. KANT RESPONDENT BY : MR. PARAS S. SAVLA DATE OF HEARING : 28/12/2011 DATE OF PRONOUNCEMENT : 30/12/2011 ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-33 MUMBAI PASSED ON 07/05/2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS RAISED THREE GROUNDS OF APPEAL THE SUM AND SUBSTANCE OF WHICH IS THE ISSUE OF DELETION OF ADDI TION OF RS. 19 43 112/- MADE BY THE AO ON ACCOUNT OF SUPPRESSED RECEIPTS. 3. BRIEFLY STATED THE FACTS ARE THAT THE AO HAD NOT ICED THAT THE ASSESSEE HAD DEDUCTED AN AMOUNT OF TDS OF RS. 43 60 3/- @ 2.26% OF CONTRACT RECEIPTS OF RS. 19 43 112/-. ON VERIFIC ATION THE AO FOUND THAT THE SAID AMOUNT WAS NOT TAKEN INTO ACCOU NT AS INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. IT WAS EXPLAINED BY THE ASSESSEE DURING THE COURSE OF SCRUTINY THA T ONE M/S ROMA BUILDERS PVT. LTD. HAS AN OUTSTANDING AMOUNT OF RS. 7 35 005/- ITA NO. 5981/MUM/10 PRANAM CONSTRUCTION CO. 2 AND RETENTION MONEY OF RS. 11 86 473/- WHICH WERE ACCOUNTED FOR AT 2004-05 AND 2005-06. THESE ARE RECEIVED DURING T HE YEAR AFTER DEDUCTING TAX OF RS. 46 603/- AN AMOUNT OF RS. 17 9 3 112/- AND FURTHER AMOUNT OF RS. 1 28 366/- WAS OUTSTANDING. T O THIS EFFECT THE ASSESSE FILED LEDGER COPY AND THE DETAILS AS ST ATED ABOVE. IN SPITE OF THE EXPLANATION GIVEN BY THE ASSESSEE WHI CH WAS EXTRACTED BY THE AO IN THE ASSESSMENT ORDER AT PAGE NO. 2 AND MADE THE ADDITION OF THE ABOVE AMOUNT OF RS. 19 43 112/- AS SUPPRESSED RECEIPTS. BEFORE THE CIT(A) THE ASSESSEE EXPLAINED THE SAME AND FURNISHED ANNUAL REPORTS FOR AY 2004-05 AND 2005-06 TO SUPPORT THE CONTENTION THAT THE AMOUNTS WERE OUTSTANDING FR OM THE SAID COMPANY EARLIER TO THE ASSESSEE WHICH WERE ALREADY ACCOUNTED FOR AND REQUESTED FOR DELETION OF THE ABOVE AMOUNT. AFT ER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND EXAMINING THE R ECORD THE CIT(A) DELETED THE ADDITION MADE BY THE AO BY OBSER VING AS UNDER:- 2.4 I HAVE CAREFULLY CONSIDERED THE ORDER OF THE ASSES SING OFFICER GROUNDS OF APPEAL AND STATEMENT OF FACTS SUBMITTED BY THE A PPELLANT. REGARDING THE FIRST GROUND OF APPEAL IN RESPECT OF RETENTION MONE Y THAT HAS BEEN ADDED BY THE ASSESSING OFFICER IN THE ASSESSMENT YEAR 2007-08 I FIND THAT THE CONTENTION OF THE APPELLANT CANBE ACCEPTED. FROM THE READING OF D ETAILS PRODUCED BEFORE ME IT IS SEEN THAT THERE WAS AN OUTSTANDING PAYMEN T DUE FROM M/S. ROMA BUILDERS PVT LTD OF RS.735000/- FOR THE WORK DONE A LONG WITH RETENTION MONEY OF RS.1 1 86 473/- FROM ASSESSMENT YEAR 2004-05 ONW ARDS. COPY OF ACCOUNTS PRODUCED BEFORE ME CLEARLY INDICATE THAT IN ASSESSM ENT YEAR 2004-05 THE AMOUNT DUE FROM M/ ROMA BUILDERS WAS RS.2 60996/- A ND IN ASSESSMENT YEAR 2005-06 IT WAS RS.917404/- UNDER RETENTION MONEY. S IMILARLY FOR LABOUR WORK DONE AMOUNT DUE FROM ROMA BUILDERS PVT. LTD. IN A. Y 2006-07 WAS RS.735000/- AS REFLECTED IN THE BALANCE SHEET OF TH E APPELLANT. THE DETAILS OF PROFIT & LOSS ACCOUNT AND BALANCE SHEET FOR ASSESS MENT YEAR 2004-05 AND 2005-06 PRODUCED BEFORE ME CLEARLY SHOW THAT THE AP PELLANT HAD OFFERED AN AMOUNT OF RS. 11 86 473/- IN RESPECT OF RETENTION M ONEY DUE AS INCOME FOR THE YEARS CONCERNED AS THE APPELLANT WAS FOLLOWING MERC ANTILE SYSTEM OF ACCOUNTING. HOWEVER SINCE THE PAYMENT WAS DUE THE SAME WERE INCORPORATED IN THE BALANCE SHEET UNDER THE HEAD SUNDRY DEBTORS. SIMILAR WAS THE CASE OF OUTSTANDING LABOUR WORK DONE DUE FROM ROMA BUILDERS WHEREIN FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING THE APPELLANT HAS OFFERED THE AMOUNT DUE FROM THEM IN THE CONCERNED YEARS FOR TAXATION AND H AD SHOWN THE AMOUNT AS LIABILITY DUE UNDER THE HEAD SUNDRY DEBTORS. NOW I FIND THAT IN THE CURRENT ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2007-08 THE I PPELLANT HAS RECEIVED RS.19 21 478/- FROM THE SAID CONCERN THROUGH CHEQUE ON AND 12.7.2006. ON PAYMENT OF THIS AMOUNT TO THE APPELLANT M/S . ROM A HAVE DULY DEDUCTED TDS AS APPLICABLE. THE ASSESSING OFFICER I FIND WRONGL Y THAT SINCE THE TDS HAS BEEN DEDUCTED IN THE CURRENT YEAR THE INCOME )LE T O THE TDS DEDUCTED SHOULD ITA NO. 5981/MUM/10 PRANAM CONSTRUCTION CO. 3 BE TAXED IN THE CURRENT YEAR ALSO. THE ASSESSING OF FICER HAS TOTALLY IGNORED THE ACCOUNTS AS DECLARED BY THE APPELLANT IN THE EARLI ER ASSESSMENT YEARS. THE ASSESSING OFFICER HAS ALSO NOT TAKEN INTO CONSIDERA TION THE ORDER U/S 143(3) DATED 27.12.2007 PASSED FOR ASSESSMENT YEAR 2005-06 IN THE CASE OF THE APPELLANT WHEREIN THE ISSUE OF RETENTION MONEY DECL ARED IN THE PROFIT & LOSS ACCOUNT THEN SHOWN UNDER THE HEAD SUNDRY DEBTORS IN THE BALANCE SHEET HAS BEEN DISCUSSED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS AND EXPLANATION OF THE APPELLANT HAD BEEN ACCEPTED. I FIND THAT THE APPELLANT HAS NOT ERRED IN ADJUSTING THE OUTSTANDING RETENTIO N MONEY IN THE YEAR UNDER CONSIDERATION BY REDUCING THE SUNDRY DEBTORS BALANC E. TAXING THE RETENTION MONEY IN THE ASSESSMENT YEAR 2007-08 WOULD AMOUNT T O DOUBLE TAXATION OF THE SAME INCOME IN THE HANDS OF THE APPELLANT AS THE AC COUNTS OF THE APPELLANT CLEARLY SHOW THAT THE INCOME HAS ALREADY BEEN CONSI DERED FOR TAXATION IN THE YEAR THEY AROSE AND HAD BEEN DULY ACCEPTED BY THE I NCOME TAX DEPARTMENT. SIMILARLY IN THE ISSUE OF LABOUR PAYMENTS DUE IT IS SEEN THAT THE APPELLANT HAS RECEIVED MONEY OUT OF THE AMOUNT DUE FROM M/S ROMA BUILDERS PVT. LTD. WHICH HAS ALREADY BEEN OFFERED FOR TAXATION IN THE EARLIER YEARS WHEN THE WORK FOR THE CONCERN WAS UNDERTAKEN. THE AMOUNT OF RS. 1 28 366/- STILL DUE IS REFLECTED IN THE BALANCE SHEET. IN VIEW OF THIS I FIND THAT THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF RETENTION MONEY IN THE CURRENT YEAR CANNOT BE UPHELD AND LIABLE TO BE DELETED. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSING THE RECORD AS WELL AS THE ORDERS OF THE AU THORITIES BELOW WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ER OF CIT(A) AS THIS IS ONE OF THE FACTUAL ISSUE WHICH WAS EXAMINE D BY THE CIT(A) CORRECTLY. EVEN THOUGH THE REVENUE HAS RAISED THE G ROUND THAT THE CIT(A) HAS NOT COMPLIED WITH RULE 46A WHILE ADMITT ING THE EVIDENCE WE DO NOT SEE ANY ADMISSION OF ADDITIONAL EVIDENCE BY THE CIT(A). THE AO HAS MENTIONED IN THE ASSESSMENT ORDE R AT PAGE 2 THE ASSESSEE ENCLOSED THE LEDGER COPY OF ROMA BUILD ERS PVT. LTD. ALONG WITH ANNUAL REPORTS OF PRECEDING TWO YEARS W HICH WERE ALREADY ON RECORD WITH THE REVENUE. THE CIT(A) HAS ONLY APPRECIATED THE EVIDENCE IN ITS CORRECT PERSPECTIVE AND DELETED THE ADDITION. WE THEREFORE CONFIRM THE ORDER OF CIT(A ) AND THE GROUNDS RAISED IN THIS REGARD BY THE REVENUE ARE DI SMISSED. ITA NO. 5981/MUM/10 PRANAM CONSTRUCTION CO. 4 5. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF DECEMBER 2011. SD/- SD/- (B. RAMAKOTAIAH) (V. DURGA RAO) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI DATED: 30 TH DECEMBER 2011. KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE C BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI.