ACIT, Chandigarh v. M/s Gora Lal Builders & Engineers, Chandigarh

ITA 651/CHANDI/2011 | 2003-2004
Pronouncement Date: 29-09-2011 | Result: Allowed

Appeal Details

RSA Number 65121514 RSA 2011
Assessee PAN AAEFG2922P
Bench Chandigarh
Appeal Number ITA 651/CHANDI/2011
Duration Of Justice 3 month(s) 20 day(s)
Appellant ACIT, Chandigarh
Respondent M/s Gora Lal Builders & Engineers, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 29-09-2011
Date Of Final Hearing 26-09-2011
Next Hearing Date 26-09-2011
Assessment Year 2003-2004
Appeal Filed On 08-06-2011
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE MS SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO. 651/CHD/2011 ASSESSMENT YEAR: 2003-04 A.C.I.T. C-4(1) CHANDIGARH V M/S GORA LAL BUILD LERS & ENGINEERS H NO. 3126 SEC 28 CHANDIGARH PAN: AAEFG 2922 P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY SHARMA RESPONDENT BY: NONE DATE OF HEARING: 26.09.2011 DATE OF PRONOUNCEMENT: 29 .09.2011 ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE REVENUE IS AGAINST THE ORDER OF C IT(A) CHANDIGARH DATED 7.3.2011 RELATING TO ASSESSMENT YEAR 2003-04 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT AMOUNT OF RS. 3458581/- HAS BEEN OFFERED FOR TAX WHEREAS NO SUCH AMOUNT HAS DECLARED IN THE PROFIT AND LOSS AMOUNT. 3 ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT AMOUNT OF RS. 1088553/- HAS BEEN OFFERED FOR TAX WHEREAS NO SUCH AMOUNT HAS DECLARED IN THE PROFIT AND LOSS ACCOUNT. 3. THE EFFECTIVE GROUNDS RAISED IN THIS APPEAL ARE GROUNDS NO. 2 & 3. 4. THE APPEAL OF THE ASSESSEE WAS FIXED FOR 4.8.201 1 AND ON THE REQUEST OF THE ASSESSEE IT WAS ADJOURNED TO 26.9.2011. TH E ASSESSEE HAS MOVED 2 ANOTHER APPLICATION FOR ADJOURNMENT WHICH IS REFUSE D. THE PRESENT APPEAL IS DECIDED AFTER HEARING THE DR FOR THE REVENUE. 5. BRIEF FACTS OF THE CASE ARE THAT THE ORIGINAL AS SESSMENT IN THE CASE WAS COMPLETED U/S 143(3) OF THE ACT WHEREIN CERTAIN AD DITIONS WERE MADE ON ACCOUNT OF MOBILIZATION ADVANCE OF RS. 34 58 181/- AND RS. 10 88 553/- RECEIVED FROM NIRWANA SOCIETY SEC 49 CHANDIGARH A ND GMCH SEC 32 CHANDIGARH TOTALING RS. 45 47 134/- U/S 68 OF THE A CT BEING INCOME FROM UNDISCLOSED SOURCES. THE CIT(A) DELETED THE ADDITI ON MADE BY THE AO. THE TRIBUNAL IN APPEAL FILED BY THE REVENUE IN ITA NO. 370/CHANDI/2007 DATED 30.5.2007 DATED 30.5.2008 FOR THE ASSESSMENT YEAR 2003-04 SET ASIDE THESE ISSUES TO THE FILE OF THE AO FOR MAKING ORDER AFRES H AFTER NECESSARY VERIFICATION. AS PER THE DIRECTIONS OF THE TRIBUNAL THE AO WAS DIRECTED TO VERIFY THE CONTENTION OF THE ASSESSEE THAT THE ELIG IBLE INCOMES COMPRISED IN THE MOBILIZATION ADVANCE RECEIVED FROM THE SOCIETY HAVE BEEN OFFERED FOR TAXATION IN ACCORDANCE WITH THE METHOD OF ACCOUNTIN G FOLLOWED BY THE ASSESSEE. IF IT IS FOUND THAT THE ASSESSEE HAS DEC LARED THE REQUISITE INCOME NO ADDITION SHALL BE CALLED FOR. 6. IN THE SECOND ROUND OF PROCEEDINGS THE NOTICES U/S 143(3) / 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE. THE REPLY OF THE ASSESSEE IS INCORPORATED AT PAGES 2 & 3 OF THE ASSESSMENT ORDER . THE AO VIDE PARA 4.1 OBSERVED THAT THE ASSESSEE HAS NOT FIELD ANY DOCUME NT TO ESTABLISH HIS CLAIM EXCEPT FOR FILING THE REPLY BEFORE THE LD. CIT(A). THE AO NOTED THAT THE ASSESSEE HAD NOT DECLARED THE SAID AMOUNT IN THE PR OFIT AND LOSS ACCOUNT RELATING TO ASSESSMENT YEAR 1998-99. REJECTING THE CLAIM OF THE ASSESSEE THE AO MADE AN ADDITION OF RS. 34 58 581/- ON ACCOU NT OF THE ADVANCES RECEIVED FROM NIRWANA SOCIETY AND FURTHER AN ADDITI ON OF RS. 10 85 553 RECEIVED BY THE ASSESSEE FROM GMCH SEC 32 CHANDIG ARH. 7. THE CIT(A) HELD AS UNDER:- 3 6 AFTER CAREFULLY CONSIDERING THE RIVAL CONTENTION S AND EXAMINING THE BOOKS OF ACCOUNT IT IS REVEALED THAT THE APPEL LANT AND RECEIVED AN ADVANCE OF RS. 42 50 000/- WHICH WAS NOT OFFERED TO TAX TILL LAY 2002- 03. PERUSAL OF BALANCE SHEET FOR ASSESSMENT YEAR 2 003-04 REVEALS SUNDRY CREDITORS AMOUNT AT RS. 3458581.42 AS ADVA NCE FROM NIRWANA SOCIETY JUST AS RS. 1088553.50 IS SHOWN AS ADVANCE FROM GMCH (COPY ENCLOSED). 7. THE ACCOUNTS REVEAL THAT THIS AMOUNT OF ADVANCE RECEIVED IN 1997 & 1998 AT RS. 42 50 000/- HAD BEEN ADJUSTED BY THE SOCIETY AND OFFERED / BROUGHT TO TAX BY THE DEPARTMENT AS UNDER :- ASSESSMENT YEAR AMOUNT (RS.) 2002-03 124273/- 2003-04 791419/- 2004-05 1272371/- 2005-06 2061937/- 8. THEREFORE IT IS EVIDENT THAT THIS AMOUNT HAS BE EN TAXED AS AND WHEN ADJUSTED BY THE SOCIETY. THEREFORE IT IS INC ORRECT TO SAY THAT RS. 3458581.42 IN THE BALANCE SHEET IS AN UNEXPLAINED D EPOSIT SINCE IT IS AN ADVANCE OFFERED FOR TAX IN THE SUBSEQUENT YEARS WHENEVER ADJUSTED BY THE SOCIETY. THE QUESTION OF ITS TAXABILITY U/S 68 DOES NOT ARISE AT ALL. THE ADDITION SO MADE IS THEREFORE DELETED AL LOWING ASSESSEES PLEA ON THIS GROUND. 8. IT WAS FURTHER HELD BY THE LD. CIT(A) IN RESPECT OF SECOND ADDITION AS UNDER:- 10 I HAVE CONSIDERED THE RIVAL CONTENTIONS AND MAT ERIAL ON RECORD. I FIND THAT THE DETAILS OF WORK DONE AS SUPPLIED BY THE SDE GMCH REVEAL THAT FOR THE ASSESSMENT YEAR 2003-04 TOTAL WORK DONE WAS RS. 11658213.13 OUT OF WHICH AFTER TAKING DEDUCTION OF MATERIAL AND WATER CHARGES AT RS. 2550074/- AND RS. 58291/- THE ASSESSEE OFFERED RS. 9048481/- FOR TAX. THESE FIGURES HAVE BEEN CON FIRMED FROM THE AUDITED ACCOUNTS OF THE APPELLANT. 11. FURTHER DETAILS GIVEN BY THE HOSPITAL SHOWS THA T THIS INCLUDES THE RECOVERY OF ADVANCE AT RS. 2460117.80. AS PER T HE DETAILS RS. 3548671/- IS THE SECURED ADVANCE GIVEN DURING THE Y EAR. THE AO HAS MADE AN ADDITION OF THE DIFFERENCE BETWEEN THE ADVA NCE GIVEN DURING THE YEAR AND ADVANCE RECEIVED DURING THE YEAR WHICH IS NOT JUSTIFIED AT ALL SINCE THE ASSESSEE HAD OFFERED THE RECOVERY OF SECURED AMOUNT FOR TAXATION. IT IS EVIDENT THAT THE ADVANCE OFFERED I S NEVER TAXED AS INCOME THE TAXABLE AMOUNT IS ONLY THE PAST ADVANCE ADJUSTED WHICH HAS BEEN DULY DONE AND TAXED IN THIS CASE. THE ADD ITION OF RS. 1058553/- IS THEREFORE DELETED ALLOWING ASSESSEES PLEA ON THIS GROUND AS WELL. 9. ON THE PERUSAL OF THE ABOVE WE FIND THAT THE AS SESSEE THOUGH HAS FILED COPIES OF THE BALANCE SHEET FOR ASSESSMENT YEARS 20 03-04 TO 2006-07. HOWEVER REQUISITE DETAILS AS REFERRED TO BY THE CIT (A) ARE NOT AVAILABLE IN RECORD. FURTHER THE SAID DETAILS WERE NOT FILED BE FORE THE AO AND UNDER THE 4 PROVISIONS OF THE ACT FRESH EVIDENCE IF ANY FILE D BEFORE THE CIT(A) IS TO BE CONFRONTED TO THE AO BEFORE ADMISSION. IN THE TOTA LITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE ABSENCE OF THE RELEVANT EVIDENCE BEING AVAILABLE ON RECORD IN RESPECT OF ADJUSTMENT OF THE AMOUNT AND THERES AFTER BEING OFFERED FOR TAX WE REMIT THE ISSUE TO THE FI LE OF AO TO DECIDE THE SAME AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING T O THE ASSESSEE. GROUNDS NO. 2 & 3 RAISED BY THE REVENUE ARE THUS ALLOWED F OR STATISTICAL PURPOSES ONLY. 10. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON THIS __29 DA Y OF SEPT 2011. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29 SEPT 2011 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR