B.G. Shirke Construction Technology P.Ltd,, Pune v. ACIT Cen Cir 2[2] Pune, Pune

ITA 730/PUN/2012 | 2008-2009
Pronouncement Date: 31-10-2013 | Result: Allowed

Appeal Details

RSA Number 73024514 RSA 2012
Assessee PAN AAACB7293D
Bench Pune
Appeal Number ITA 730/PUN/2012
Duration Of Justice 1 year(s) 6 month(s) 18 day(s)
Appellant B.G. Shirke Construction Technology P.Ltd,, Pune
Respondent ACIT Cen Cir 2[2] Pune, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-10-2013
Date Of Final Hearing 02-09-2013
Next Hearing Date 02-09-2013
Assessment Year 2008-2009
Appeal Filed On 12-04-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NOS. 727 TO 730/PN/2012 (A. Y. : 2003-04 2006-07 2007-08 & 2008-09) B. G. SHIRKE CONSTRUCTION TECHNOLOGY PRIVATE LIMITED 72 76 MUNDHWA INDUSTRIAL ESTATE MUNDHWA PUNE 411 036. PAN : AAACB7293D . APPELLANT VS. ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 (2) PUNE. . RESPONDENT APPELLANT BY : MR. SUNIL PATHAK RESPONDENT BY : MRS. M. S. VERMA DATE OF HEARING : 03-09-2013 DATE OF PRONOUNCEMENT : 31-10-2013 ORDER PER G. S. PANNU AM THE CAPTIONED FOUR APPEALS PREFERRED BY THE ASSESS EE RELATE TO ASSESSMENT YEARS 2003-04 2006-07 2007-08 & 2008-0 9 AND INVOLVE A COMMON ISSUE RELATING TO THE TAXABILITY OF RETENTIO N MONEY WITHHELD/DEDUCTED BY CUSTOMERS FOR WHOM ASSESSEE HAD EXECUTED THE CON STRUCTION CONTRACTS. SINCE THE APPEALS INVOLVE A COMMON POINT THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED F OR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE CAPTIONED APPEALS ARE DIRECTED AGAINST FOUR SIMILARLY WORDED ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-CENTRAL PUNE DATED 23.12.2011 WHICH IN TURN HAVE ARISEN FROM THE ASS ESSMENTS MADE BY THE ASSESSING OFFICER U/S 153A R.W.S. 143(3) OF THE INC OME-TAX ACT 1961 (IN SHORT THE ACT) FOR THE ASSESSMENT YEARS 2003 -04 2006-07 2007-08 & 2008-09. ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 3. THE APPELLANT IS A COMPANY INCORPORATED UNDER TH E PROVISIONS OF THE COMPANIES ACT 1956 AND IS ENGAGED IN THE BUSINESS OF EXECUTION OF CONSTRUCTION CONTRACTS. IN RESPECT OF SOME OF THE C ONTRACTS EXECUTED A CLAUSE IN THE CONTRACT ENTITLES THE CUSTOMERS TO RETAIN A CERTAIN CONTRACT VALUE RANGING BETWEEN 5% TO 10% TILL THE COMPLETION OF DEFECT LIA BILITY PERIOD SPECIFIED IN THE CONTRACT WHICH GENERALLY RANGES 12 TO 24 MONTHS PO ST-COMPLETION OF CONSTRUCTION. THE PLEA OF THE ASSESSEE IS THAT THE INCOME ON ACCOUNT OF SUCH RETENTION MONEY WITHHELD BY THE CONTRACTEES/CUSTOME RS DOES NOT ACCRUE TO THE ASSESSEE IN THE YEAR IN WHICH THE AMOUNT IS RETAINE D AND THAT THE TAXABILITY OF SUCH AMOUNT IS TO BE CONSIDERED IN THE YEAR IN WHIC H SUCH AMOUNTS ARE ACTUALLY RECEIVED BY THE ASSESSEE FROM THE CONTRACT EES/CUSTOMERS. 4. THERE WAS A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT CONDUCTED IN THE CASE OF THE ASSESSEE ON 18.12.2008 AND AS A CONSEQUENCE NOTICES U/S 153A(A) OF THE ACT WERE ISSUED TO THE ASSESSEE FOR THE CAPTIONED ASSESSMENT YEARS. IN THE ASSESSMENTS FINALIZED U/S 153A R.W.S. 143(3) OF THE ACT ASSESSING OFFICER REFUSED TO ENTERTAIN ASSESSE ES CLAIM FOR EXCLUDING FROM INCOME THE AMOUNT OF RETENTION MONEY WITHHELD BY T HE CONTRACTEE IN THE YEAR IN WHICH SUCH AMOUNT IS RETAINED AND INSTEAD TO TAX IT IN THE YEAR OF ITS ACTUAL RECEIPT. THE REFUSAL OF THE ASSESSING OFFICER AND WHICH HAS BEEN SUSTAINED BY THE CIT(A) IS THE CRUX OF THE DISPUTE IN THE CAPTI ONED FOUR APPEALS PREFERRED BY THE ASSESSEE BEFORE US. 5. THE OBJECTIONS OF THE REVENUE TO THE ASSESSEES CLAIM CAN BE UNDERSTOOD AS FOLLOWS. FIRSTLY AS PER THE REVENUE SUCH CLAIM COULD NOT BE ENTERTAINED IN AN ASSESSMENT CONTEMPLATED U/S 153A R.W.S. 143(3) OF THE ACT BECAUSE THE SAID CLAIM WAS NOT MADE IN THE RETURN O F INCOME FILED ORIGINALLY U/S 139(1) OF THE ACT. AS PER THE REVENUE AN ASSES SMENT U/S 153A OF THE ACT WAS NOT FOR THE BENEFIT OF THE ASSESSEE AND THEREF ORE ANY SUCH INCOME WHICH HAS BEEN OFFERED IN THE RETURN OF INCOME ORIGINALLY FILED U/S 139(1) OF THE ACT COULD NOT BE CONSIDERED FOR EXCLUSION IN AN ASSESSM ENT FINALIZED U/S 153A ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 R.W.S. 143(3) OF THE ACT WHICH IS A POST-SEARCH AS SESSMENT. ACCORDING TO THE REVENUE THE PROVISIONS OF SECTION 153A OF THE ACT HAVE BEEN INTRODUCED TO MAKE ASSESSMENT/REASSESSMENT IN CASES WHERE A SEARC H HAS BEEN CARRIED OUT U/S 132 OF THE ACT AND THEREFORE THE SCOPE OF A N ASSESSMENT U/S 153A OF THE ACT SHOULD BE RESTRICTED TO THE ASSESSMENT OR R EASSESSMENT OF INCOME BASED ON THE MATERIAL AND EVIDENCE FOUND DURING THE SEARCH AND SEIZURE ACTION. 6. ON THIS ASPECT THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE DISPUTE BE ADJUDICATED IN THE LIGHT OF THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (2012) 137 ITD 287 (MUM) (SB). IN THE PRESENT CASE A SEARCH ACTION U/S 132(1) OF THE ACT WAS CARRIED OUT IN THE CASE OF THE ASSESSEE AND IT WOULD SUFFICE FOR US TO OBSERVE THAT SECTION 153A OF THE ACT EMPOWERED THE ASSESSING OFFICER TO ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSME NT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SUCH SEARCH HAS BEEN CONDUCTED. ACCORDINGLY ASSESSING O FFICER HAD ISSUED NOTICES U/S 153A(1)(A) OF THE ACT FOR THE CAPTIONED ASSESSMENT YEARS CALLING FOR THE RETURNS OF INCOME. FURTHER THE SECOND PRO VISO TO SECTION 153A(1) OF THE ACT PRESCRIBES THAT ASSESSMENT OR REASSESSMENT IF ANY RELATING TO ANY ASSESSMENT YEAR FALLING WITH THE PERIOD OF SIX ASSE SSMENT YEARS REFERRED TO THEREIN WHICH ARE PENDING ON THE DATE OF INITIATIO N OF THE SEARCH U/S 132 OF THE ACT SHALL ABATE. THE SCOPE OF ASSESSMENT OR REASSE SSMENT OF THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE YEAR IN WHICH THE SEARCH IS CONDUCTED HAS BEEN EXP LAINED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOB AL LOGISTICS LTD. (SUPRA). ACCORDING TO THE SPECIAL BENCH IN SO FAR AS THE AB ATED ASSESSMENTS ARE CONCERNED THE ASSESSING OFFICER RETAINS THE ORIGIN AL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A OF THE ACT. IN OTHER WORDS ACCORDING TO THE SPECIAL BENCH OF THE TRIBUNAL IN THE PENDING A SSESSMENTS WHICH ABATE ON ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 ACCOUNT OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT THE ASSESSING OFFICER IS EMPOWERED TO ASSESS NOT ONLY THE INCOME ASSESSABLE UNDER THE NORMAL PROVISIONS OF THE ACT BUT ALSO ADDITIONS WHI CH ARE REQUIRED TO BE MADE ON THE BASIS OF THE SEARCH AND SEIZURE ACTION U/S 1 32(1) OF THE ACT. IN CONTRAST IN RESPECT OF ASSESSMENTS OF THE YEARS WHICH DO NOT ABATE BECAUSE OF THE SAME HAVING BEEN CONCLUDED AND NOT PENDING ON THE D ATE OF SEARCH ARE CONCERNED IN ADDITION TO THE INCOME THAT HAS ALREA DY BEEN ASSESSED THE ASSESSMENT U/S 153A OF THE ACT WILL BE MADE ON THE BASIS OF THE INCRIMINATING MATERIAL WHICH IN THE CONTEXT OF THE RELEVANT PROV ISIONS WOULD MEAN : (I) BOOKS OF ACCOUNT OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT; AND (II) UNDISC LOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 7. IN THIS BACKGROUND WE HAVE HEARD THE RIVAL SUBM ISSIONS. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS PRIMARILY EMPHASIZE D THAT IN A POST-SEARCH ASSESSMENT TO BE CARRIED OUT U/S 153A OF THE ACT A FRESH CLAIM OR RELIEF WHICH WAS HITHERTO NOT CLAIMED IN THE RETURN OF INCOME OR IGINALLY FILED U/S 139(1) OF THE ACT CANNOT BE ENTERTAINED BECAUSE POST-SEARCH A SSESSMENT PROCEEDINGS ARE NOT FOR THE BENEFIT OF THE ASSESSEE BUT ONLY FO R THE BENEFIT OF THE REVENUE. 8. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE AFORESAID PROPOSITION CANVASSED BY THE REVENUE IS TO BE APPLI ED ONLY IN RELATION TO THE ASSESSMENTS TO BE MADE U/S 153A WHICH PERTAIN TO TH E YEARS FOR WHICH THE ORIGINAL ASSESSMENTS HAVE BEEN CONCLUDED BUT IN SO FAR AS THE ASSESSMENTS RELATING TO THE ASSESSMENT YEARS WHICH ARE PENDING ON THE DATE OF INITIATION OF SEARCH AND WHICH ABATE BECAUSE OF THE SECOND PROVIS O TO SECTION 153A OF THE ACT ASSESSEE SHALL BE ENTITLED TO MAKE FRESH CLAIM S ALSO. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN THIS CASE SEARCH U/S 132(1) OF THE ACT WAS CARRIED OUT ON 18. 12.2008. ON THE BASIS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT W HICH READS AS UNDER :- ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT IF ANY RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX AS SESSMENT YEARS REFERRED TO IN THIS [SUB-SECTION] PENDING ON THE DATE OF INITIA TION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A AS THE CASE MAY BE SHALL ABATE. IN THE PRESENT CASE THE ASSESSMENTS WHICH ARE PEND ING ON THE DATE OF INITIATION OF SEARCH ARE FOR ASSESSMENT YEARS 2007- 08 AND 2008-09 AND THUS SUCH ASSESSMENTS ABATE. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE CONCEDED THAT ASSESSMENTS FOR ASSESSMENT YEARS 2003 -04 AND 2006-07 WERE NOT PENDING ON THE DATE OF INITIATION OF SEARCH AND THUS THE SAME DO NOT ABATE AS PER THE AFORESAID PROVISO TO SECTION 153A(1) OF THE ACT. THE AFORESAID POSITION IS NOT DISPUTED BY THE REVENUE ALSO. 10. IN THE ABOVE UNDISPUTED FACT SITUATION NOW WE MAY EXAMINE THE SCOPE OF ASSESSMENTS TO BE MADE U/S 153A(1)(B) OF THE ACT FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 WHICH HAVE ABATED AND FO R THE ASSESSMENT YEARS 2003-04 AND 2006-07 WHICH DO NOT ABATE. FOLLOWING THE REASONING LAID DOWN IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUP RA) IT HAS TO BE HELD THAT IN SO FAR AS THE ASSESSMENT YEARS 2003-04 AND 2006-07 ARE CONCERNED ASSESSMENTS U/S 153A(1)(B) OF THE ACT WOULD BE MADE ON THE BASIS OF INCRIMINATING MATERIAL WHICH HAS BEEN EXPLAINED TO MEAN (I) BOOKS OF ACCOUNT OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT; AND (II) UNDISCLOSED INCOM E OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. OF COURSE THE INCOME SO DET ERMINED SHALL BE IN ADDITION TO THE INCOME ALREADY ASSESSED IN REGULAR ASSESSMENT PROCEEDINGS FOR THE SAID TWO ASSESSMENT YEARS. NOW THE MOOT P OINT IS AS TO WHETHER THE IMPUGNED CLAIM OF THE ASSESSEE FOR EXCLUDING INCOME ON ACCOUNT OF RETENTION MONEY CAN FALL IN THE SCOPE AND AN AMBIT OF AN ASSE SSMENT MADE U/S 153A(1)(B) OF THE I.T ACT FOR THE ASSESSMENT YEARS 2003-04 AND 2006-07. OSTENSIBLY AS OBSERVED EARLIER ON THE BASIS OF THE DECISION OF SPECIAL BENCH OF TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTI CS LTD. (SUPRA) AN ASSESSMENT U/S 153A(1)(B) FOR THE ASSESSMENT YEARS 2003-04 AND 2006-07 ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 WOULD BE BASED ON INCRIMINATING MATERIAL BOOKS OF ACCOUNTS OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT OR ANY UNDISCLOSED INCOME OR PROPERTY DI SCOVERED IN THE COURSE OF SEARCH. AT THE TIME OF HEARING THE LD. COUNSEL FO R ASSESSEE FAIRLY CONCEDED THE POSITION THAT IMPUGNED CLAIM RELATING TO EXCLUS ION OF INCOME ON ACCOUNT OF RETENTION MONEY DOES NOT FALL IN THE AFORESAID CATE GORY AND THUS IT IS BEYOND THE SCOPE AND AMBIT OF AN ASSESSMENT ENVISAGED U/S 153A(1)(B) OF THE ACT FOR ASSESSMENT YEARS 2003-04 AND 2006-07. THEREFORE O N THIS POINT ITSELF WE UPHOLD THE STAND OF THE REVENUE FOR ASSESSMENT YEAR S 2003-04 AND 2006-07 IN DENYING ASSESSEES CLAIM FOR EXCLUDING INCOME ON ACCOUNT OF RETENTION MONEY. 11. ACCORDINGLY THE APPEALS OF THE ASSESSEE FOR AS SESSMENT YEARS 2003-04 AND 2006-07 ARE DISMISSED. 12. NOW IN SO FAR AS THE ASSESSMENTS FOR ASSESSMEN T YEARS 2007-08 AND 2008-09 ARE CONCERNED THE ORIGINAL ASSESSMENTS WER E PENDING ON THE DATE OF INITIATION OF SEARCH AND THE SAME STAND ABATED IN TERMS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT. FOLLOWING THE REASO NING LAID DOWN IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) IN SO FAR AS ASSESSMENT YEARS 2007-08 AND 2008-09 ARE CONCERNED THE ASSESSING OFFICER RE TAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S 153A OF THE ACT. IN THIS CONTEXT THE PRELIMINARY ISSUE IS AS TO WHETHER THE SCOPE OF ASSESSMENTS U/S 153A(1)(B) OF THE ACT FOR ASSESSMENT YEARS 2007 -08 AND 2008-09 CAN INCLUDE CONSIDERATION OF ASSESSEES PLEA TO EXCLUDE INCOME ON ACCOUNT OF RETENTION MONEY CONSIDERING THE FACT THE RETURNS O F INCOME FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2007-08 AND 2008-09 U /S 139(1) OF THE ACT DID NOT CONTAIN ANY SUCH CLAIM. IN THE ASSESSMENTS U/S 153A(1)(B) OF THE ACT ASSESSEE CLAIMED THAT INCOME ON ACCOUNT OF RETENTIO N MONEY BE EXCLUDED IN THE YEARS WHEN THE CUSTOMERS HAD WITHHELD THE RETEN TION MONEY AND INSTEAD TAX IT IN THE YEAR OF ITS ACTUAL RECEIPT. NO DOUBT THE SAID CLAIM DOES NOT PERTAIN ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 TO ANY INCRIMINATING MATERIAL FOUND IN THE COURSE O F SEARCH SO HOWEVER ON ACCOUNT OF THE FACT THAT THE ASSESSING OFFICER RETA INS HIS ORIGINAL JURISDICTION AS WELL IN THE ASSESSMENTS FOR THE YEARS 2007-08 AND 2 008-09 TO BE MADE U/S 153A(1)(B) OF THE ACT IN OUR CONSIDERED OPINION A S THE FOLLOWING DISCUSSION WOULD SO SUCH A CLAIM THOUGH MADE FOR THE FIRST TI ME IN THE IMPUGNED ASSESSMENT PROCEEDING WOULD FALL WITHIN THE AMBIT AND SCOPE OF IMPUGNED ASSESSMENT CARRIED OUT U/S 153A(1)(B) OF THE ACT. PERTINENTLY THE ORIGINAL JURISDICTION VESTED WITH THE ASSESSING OFFICER FOR THE ASSESSMENT YEARS 2007- 08 AND 2008-09 EMPOWERS HIM TO CONSIDER THE IMPUGNE D CLAIM; AND TO PUT IT IN OTHER WORDS ASSESSEE WAS COMPETENT TO RAISE SUC H A FRESH CLAIM IN THE CONTEXT OF THE ORIGINAL JURISDICTION VESTED WITH TH E ASSESSING OFFICER THOUGH IT WAS NOT RAISED IN THE RETURNS OF INCOME ORIGINALLY FILED. 13. WE MAY ALSO CONSIDER THIS FROM ANOTHER ANGLE. AS ON THE DATE OF INITIATION OF SEARCH I.E. 18-12-2008 THE RETURNS O F INCOME FILED BY ASSESSEE U/S 139(1) OF THE ACT FOR ASSESSMENT YEARS 2007-08 AND 2008-09 WERE PENDING FOR ASSESSMENT AND THE IMPUGNED CLAIMED WAS NOT MADE IN THE RETURNS OF INCOME ORIGINALLY FILED. SO HOWEVER U /S 139(5) OF THE ACT ASSESSEE WAS COMPETENT TO FURNISH A REVISED RETURN AND MAKE SUCH A CLAIM AND THUS THE ASSESSING OFFICER WAS REQUIRED TO ENTERTAIN SUC H A CLAIM IN THE COURSE OF EXERCISING HIS ORIGINAL JURISDICTION TO MAKE AN ASS ESSMENT U/S 143(3) OF THE ACT. NOW CONSEQUENT TO SEARCH ACTION FOR ASSESSM ENT YEARS 2007-08 AND 2008-09 ASSESSING OFFICER NOT ONLY ACQUIRES JURISD ICTION TO MAKE ADDITIONS BASED ON THE INCRIMINATING MATERIAL BUT ALSO RETAIN S THE ORIGINAL JURISDICTION AS EXPLAINED BY THE SPECIAL BENCH OF TRIBUNAL IN THE C ASE ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA). THUS THE ENSUING ASSESSME NTS U/S 153A(1)(B)OF THE ACT FOR ASSESSMENT YEARS 2007-08 AND 2008-09 WOULD ENABLE THE ASSESSING OFFICER TO CONSIDER THE IMPUGNED CLAIM WHICH HAS BE EN JUSTIFIABLY MADE BY THE ASSESSEE. CONSIDERING THE ENTIRETY OF CIRCUMSTANCE S AND IN LAW WE THEREFORE HOLD THAT IN SO FAR AS THE ASSESSMENTS F OR THE ASSESSMENT YEARS ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 2007-08 AND 2008-09 ARE CONCERNED THE INCOME-TAX A UTHORITIES ERRED IN NOT ENTERTAINING THE IMPUGNED CLAIM OF THE ASSESSEE MER ELY BECAUSE IT WAS MADE IN THE COURSE OF AN ASSESSMENT U/S 153A(1)(B) OF TH E ACT AND WAS NOT MADE IN THE RETURNS OF INCOME ORIGINALLY FILED U/S 139(1) O F THE ACT. 14. FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 A NOTHER OBJECTION RAISED BY THE REVENUE IS TO THE EFFECT THAT THE CLA IM WAS NOT MADE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S 153A(1)(A) OF THE ACT BUT WAS SUBMITTED BY WAY OF A LETTER DURING THE ASS ESSMENT PROCEEDINGS AND THEREFORE FOLLOWING THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (2006) 284 ITR 323 (SC ) THE ASSESSING OFFICER WAS JUSTIFIED IN NOT ENTERTAINING SUCH A CLAIM. 15. ON THIS ASPECT THE LEARNED COUNSEL FOR THE ASS ESSEE POINTED OUT THAT IN THE RETURN OF INCOME SUBMITTED IN RESPONSE TO NOTIC E U/S 153A(1)(A) OF THE ACT ASSESSEE HAD ENCLOSED A NOTE DATED 14.09.2009 A CO PY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGE 1 TO 2 PUTTING-FO RTH ITS CLAIM FOR EXCLUDING INCOME ON ACCOUNT OF RETENTION MONEY BUT IN THE CO MPUTATION OF INCOME NO SPECIFIC CLAIM WAS MADE BECAUSE THE QUANTIFICATION OF THE CLAIM COULD NOT BE MADE IN THE LIMITED TIME PERIOD ALLOWED TO FILE A R ETURN IN RESPONSE TO NOTICE U/S 153A(1)(A) OF THE ACT. IN THE COURSE OF THE SU BSEQUENT ASSESSMENT PROCEEDINGS ASSESSEE QUANTIFIED THE CLAIM FOR THE RESPECTIVE ASSESSMENT YEARS AND ALSO FILED COPIES OF THE AGREEMENTS WITH THE CUSTOMERS WHICH CONTAINED THE RELEVANT CLAUSES PERMITTING RETENTION OF A PORTION OF THE CONTRACT VALUE. IT IS POINTED OUT THAT STRICTLY SPEAKING THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (S UPRA) IS NOT APPLICABLE IN THE PRESENT CASE AS NO FRESH CLAIM WAS MADE IN THE ASSESSMENT PROCEEDINGS BUT IT IS A CASE WHERE A CLAIM PUT-FORTH IN THE RET URN OF INCOME WAS ONLY QUANTIFIED DURING ASSESSMENT PROCEEDINGS AND THUS T HE ASSESSING OFFICER OUGHT TO HAVE ENTERTAINED THE IMPUGNED CLAIM. ALTE RNATIVELY IT IS CONTENDED THAT THE CIT(A) ENJOYS PLENARY POWERS OF THE ASSESS ING OFFICER AND FOLLOWING ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CA SE OF JUTE CORPORATION OF INDIA LTD. VS. CIT (1991) 187 ITR 688 THE CLAIM S HOULD HAVE BEEN ENTERTAINED BY HIM AS THE COMPLETE FACTS WERE ON RECORD. IN TH IS CONTEXT THE LEARNED COUNSEL REFERRED TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF JAIN IRRIGATION SYSTEMS LTD. VIDE ITA NO.1319/PN /2009 DATED 30.01.2012 WHEREIN THE IMPORT OF THE JUDGMENT OF THE HONBLE S UPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) HAS BEEN EXPLAINED O N THE BASIS OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JAI PARABOLIC SPRINGS LTD. (2008) 306 ITR 42 (DEL) IN THE FOLLOWING WOR DS :- 5. WE HAVE CAREFULLY CONSIDERED RIVAL SUBMISSIONS. IN OUR VIEW THE PLEA OF THE ASSESSEE IS WELL-REASONED INASMUCH AS THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) DOES NOT IMPINGE ON THE POWERS OF THE APPELLATE AUTHORITIES TO ENTERTAIN A FRESH CLAIM WHICH WAS HITHERTO NOT PREFERRED BY THE ASSESSEE IN THE RETURN OF INCOME. IN FACT THE HONBLE DELHI HIGH COURT IN THE CASE OF C IT V. JAI PARABOLIC SPRINGS LTD. 306 ITR 42 (DEL) SUPPORTS THE PROPOSITION THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (S UPRA) WAS LIMITED TO THE POWER OF THE ASSESSING OFFICER TO ENTERTAIN CLAIM F OR DEDUCTION OTHERWISE THAN BY A REVISED RETURN AND DOES NOT PUT FETTERS ON SUC H POWERS OF THE APPELLATE AUTHORITIES. 16. ON THE BASIS OF AFORESAID IT IS SOUGHT TO BE M ADE OUT THAT THE CLAIM OF THE ASSESSEE OUGHT TO HAVE BEEN ENTERTAINED BY THE LOWER AUTHORITIES AND DECIDED ON ITS MERITS. 17. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REP RESENTATIVE APPEARING FOR THE REVENUE HAS CONTENDED THAT THE LOWER AUTHOR ITIES WERE JUSTIFIED IN NOT ENTERTAINING THE IMPUGNED CLAIM AS IT WAS A FRESH C LAIM MADE ONLY DURING THE ASSESSMENT PROCEEDINGS AND NOT IN THE RETURN OF INC OME. 18. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (S UPRA) OPINED THAT A FRESH CLAIM OF THE ASSESSEE CAN BE ENTERTAINED AT THE TIM E OF ASSESSMENT ONLY IF IT IS MADE BY WAY OF A REVISED RETURN OF INCOME; AND THE AFORESAID PROPOSITION HAS BEEN INVOKED BY THE INCOME-TAX AUTHORITIES IN THE P RESENT CASE TO DENY ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 ASSESSEES CLAIM FOR EXCLUSION OF INCOME ON ACCOUNT OF RETENTION MONEY A CLAIM WHICH WAS MADE DURING THE ASSESSMENT PROCEEDI NGS. 19. FACTUALLY SPEAKING WE FIND THAT IN TERMS OF A COMMUNICATION DATED 14.09.2009 FILED ALONG WITH THE RETURN OF INCOME FI LED IN RESPONSE TO NOTICE ISSUED U/S 153A(1)(A) OF THE ACT ASSESSEE INTER-ALIA STATED AS UNDER :- THE BUSINESS OF OUR COMPANY IS TO EXECUTE CONSTRUC TION CONTRACTS. IN RESPECT OF SOME OF THE CONTRACTS EXECUTED BY THE CO MPANY THERE IS A CLAUSE IN THE CONTRACT WHICH ENTITLES THE CUSTOMER TO RETAIN BETWEEN 5% TO 10% OF CONTRACT VALUE TILL THE COMPLETION OF DEFECT LIABIL ITY PERIOD CONTAINED IN THE CONTRACT WHICH IS GENERALLY BETWEEN 12 TO 24 MONTHS AFTER THE COMPLETION OF THE CONSTRUCTION. INADVERTENTLY IN THE ORIGINAL RET URN FILED THIS AMOUNT WAS NOT EXCLUDED WHILE COMPUTING THE TOTAL INCOME. IN THE S HORT SPAN OF TIME ALLOWED TO US TO FILE THE RETURN U/S. 153A THE EXACT QUANT IFICATION OF THE RETENTION MONEY COULD NOT BE WORKED OUT. HENCE WE WILL SUBMIT THE DETAILS THEREOF LATER. BUT FOR THE TIME BEING WE SUBMIT THAT THE RETENTIO N MONEY IN THE VARIOUS CONTRACTS IS NOT TAXABLE IN VIEW OF THE VARIOUS DEC ISIONS INCLUDING THE DECISIONS CITED BELOW WHEREIN IT IS HELD THAT THE TAXABILITY OF THIS AMOUNT IS TO BE CONSIDERED IN THE YEAR IN WHICH THIS AMOUNT IS DUE TO THE ASSESSEE FROM THE CONTRACTEE. (A) CIT V ASSOCIATED CABLES P. LTD. (2006) 286 ITR 596 (BOM.) (B) DCIT V SPIRAX MARSHALL LTD. (2007) 109 TTJ (PUNE) 593 (C) NATIONAL HEAVY ENGG. CO. OP. LTD. V DCIT (2007) 105 ITD 485 (PUNE) INADVERTENTLY IN THE ORIGINAL RETURN OF INCOME THI S AMOUNT WAS NOT CLAIMED AS DEDUCTION. WE REQUEST YOUR HONOUR TO KINDLY GRANT U S APPROPRIATE DEDUCTION WHILE COMPLETING ASSESSMENT. WE SHALL SUBMIT THE NE CESSARY DETAILS AND QUANTIFICATION OF CLAIM DURING THE COURSE OF ASSESS MENT. 20. THE AFORESAID NOTE CLEARLY DEPICTS THE CLAIM OF THE ASSESSEE TO THE EFFECT THAT THE RETENTION MONEY IN VARIOUS CONTRACT S RETAINED/DEDUCTED BY THE CUSTOMERS IS NOT TAXABLE; AND VARIOUS CASE LAWS HA VE ALSO BEEN CITED INCLUDING THAT OF THE HONBLE JURISDICTIONAL HIGH C OURT OF BOMBAY IN ASSOCIATED CABLES (P) LTD. (SUPRA) IN SUPPORT OF THE SAID PROP OSITION. OF COURSE THE CLAIM WAS NOT REFLECTED IN THE ACTUAL COMPUTATION OF INCO ME IN THE ABSENCE OF ITS QUANTIFICATION. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS ASSESSEE NOT ONLY QUANTIFIED ITS CLAIM YEAR-WISE BUT ALSO EXPLAI NED THE FACTUAL MATRIX OF THE CLAIM BASED ON THE RELEVANT CLAUSES OF THE CONTRACT S WITH VARIOUS CONTRACTEES/CUSTOMERS AS IS EVIDENT FROM COPY OF A SSESSEES COMMUNICATION ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 TO THE ASSESSING OFFICER PLACED IN THE PAPER BOOK A T PAGES 3-6. IN THIS FACTUAL BACKGROUND CAN IT BE SAID THAT THE ASSESSEE MADE A FRESH CLAIM DURING THE ASSESSMENT PROCEEDINGS SO AS TO FALL WITHIN THE PUR VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA)? IN OUR VIEW THE FACT SITUATION IN THE PRESENT CASE IS QUALITATIVELY DIFFERENT THAN THAT CONSIDERED BY THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA). OSTENSIBLY THE ASSESSEE COMPANY MAD E A CLAIM FOR EXCLUDING INCOME ON ACCOUNT OF RETENTION MONEY IN THE RETURN OF INCOME ITSELF THOUGH THE QUANTIFICATION WAS ABSENT AND THE ACTUAL QUANTIFIC ATION OF SUCH CLAIM WAS MADE DURING THE ASSESSMENT PROCEEDINGS; THUS SUBST ANTIVELY SPEAKING IT CANNOT BE SAID THAT ASSESSEE MADE A NEW CLAIM DURIN G ASSESSMENT PROCEEDINGS WHICH WAS NOT MADE IN THE RETURN OF INC OME. CONSIDERING THE ABOVE FACT SITUATION IN OUR VIEW THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN REFUSING TO ENTERTAIN THE IMPU GNED CLAIM BASED ON THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA). 21. IN ANY CASE THE JUDGEMENT OF THE HONBLE SUPRE ME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) DOES NOT IMPINGE ON THE POWERS OF APPELLATE AUTHORITIES TO ENTERTAIN A FRESH CLAIM WHICH WAS HI THERTO NOT PREFERRED BY THE ASSESSEE IN THE RETURN OF INCOME AS EXPLAINED BY T HE HONBLE DELHI HIGH COURT IN THE CASE OF JAI PARABOLIC SPRINGS LTD. (SU PRA). ACCORDINGLY THERE WAS NO IMPEDIMENT FOR THE CIT(A) TO HAVE ENTERTAINED TH E IMPUGNED CLAIM ESPECIALLY WHEN THE REQUIRED FACTS TO ADJUDICATE TH E CONTROVERSY WERE ALREADY ON RECORD. 22. THUS CONSIDERED IN THE AFORESAID LIGHT WE FIN D NO JUSTIFICATION FOR THE REVENUE TO REJECT ASSESSEES IMPUGNED CLAIM FOR ASS ESSMENT YEARS 2007-08 AND 2008-09 ON THE GROUND THAT THE CLAIM WAS MADE B Y WAY OF A LETTER DURING THE COURSE OF ASSESSMENTS AND NOT IN THE RETURN OF INCOME. ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 23. THE THIRD OBJECTION WHICH HAS BEEN RAISED BY TH E REVENUE IS IN TERMS OF A DISCUSSION MADE BY THE CIT(A) IN PARA 3.6 OF THE IMPUGNED ORDER. ACCORDING TO THE CIT(A) IF THE CLAIM FOR EXCLUDING RETENTION MONEY WAS ENTERTAINED AND ALLOWED IT WOULD RESULT IN THE DETERMINATION OF TO TAL INCOME AT A FIGURE BELOW THE INCOME ORIGINALLY RETURNED/ASSESSED AND THUS TH E SAME WAS NOT PERMISSIBLE. THIS OBJECTION OF THE REVENUE IN OUR VIEW IS NO BAR TO ENTERTAIN THE AFORESAID CLAIM KEEPING IN MIND THE RATIO OF T HE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SHELLY PRODUCT S & ANR. (2003) 261 ITR 367 (SC) AND ALSO THE JUDGEMENT OF THE HONBLE GUJA RAT HIGH COURT IN THE CASE OF GUJARAT GAS CO. LTD. VS. CIT 245 ITR 54 (G UJ). 24. ON THE BASIS OF THE AFORESAID DISCUSSION IN CO NCLUSION WE HOLD THAT IN SO FAR AS THE ASSESSMENT YEARS 2007-08 AND 2008-09 ARE CONCERNED THE CLAIM OF THE ASSESSEE FOR EXCLUSION OF INCOME ON AC COUNT RETENTION MONEY WITHHELD BY CONTRACTEES/CUSTOMERS HAS BEEN WRONGLY REJECTED BY THE LOWER AUTHORITIES. 25. IN SO FAR AS THE MERITS OF THE CLAIM IS CONCERN ED NO DOUBT IN PRINCIPLE THE SAME IS COVERED BY THE RATIO OF THE JUDGEMENT O F THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CABLES P. LTD. (SUP RA). THE ASSESSEE HAS ALSO FURNISHED THE YEAR-WISE WORKING OF THE CLAIM OF EXC LUDING INCOME ON ACCOUNT OF RETENTION MONEY FOR THE ASSESSMENT YEARS IN QUES TION. SUCH DETAILS ARE PLACED IN THE PAPER BOOK FILED BEFORE US AND IT HAS BEEN ASSERTED THAT THE SAME WAS ALSO AVAILABLE ON THE RECORD OF THE AUTHOR ITIES BELOW. OSTENSIBLY THE ASSESSING OFFICER AS WELL THE CIT(A) HAVE NOT EXAMI NED THE MERITS OF THE CLAIM BECAUSE THE SAME WAS REJECTED AT THE THRESHOLD ITSE LF. AT THE TIME OF HEARING THE APPELLANT HAS PREFERRED ADDITIONAL GROUNDS OF A PPEAL RE-QUANTIFYING THE CLAIM FOR ASSESSMENT YEARS 2007-08 AND 2008-09 IN T HE EVENT OF SIMILAR CLAIMS NOT BEING FOUND EXIGIBLE FOR ASSESSMENT YEARS 2003- 04 AND 2006-07. IN ORDER TO ENABLE THE ASSESSING OFFICER TO VERIFY THE WORKI NGS OF THE CLAIM FOR ASSESSMENT YEARS 2007-08 AND 2008-09 WE RESTORE TH E MATTER BACK TO THE FILE ITA NOS. 727 TO 730/PN/2012 A.Y. 2003-04 2006-07 2007-08 & 2008-09 OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SH ALL EXAMINE THE WORKING OF THE CLAIM MADE BY THE ASSESSEE INCLUDING THE REVIS ED WORKINGS CONSEQUENT TO NON-ADMISSION OF SIMILAR CLAIM FOR ASSESSMENT YEARS 2003-04 AND 2006-07 AND THEREAFTER ALLOW THE APPROPRIATE CLAIM AS PER L AW. NEEDLESS TO SAY THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASON ABLE OPPORTUNITY OF FURNISHING APPROPRIATE DETAILS IN SUPPORT OF THE CL AIM AND ONLY THEREAFTER THE ASSESSING OFFICER SHALL ADJUDICATE IT AS PER LAW AN D RE-COMPUTE THE TOTAL INCOME ACCORDINGLY FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09. 26. IN THE RESULT IN SO FAR AS THE APPEALS FOR ASS ESSMENT YEARS 2003-04 AND 2006-07 ARE CONCERNED THE SAME ARE DISMISSED; WHERE AS THE APPEALS FOR ASSESSMENT YEARS 2007-08 AND 2008-09 ARE ALLOWED A S ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE DATED : 31 ST OCTOBER 2013 SUJEET/GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-CENTRAL PUNE; 4) THE CIT-CENTRAL PUNE; 5) THE DR A BENCH I.T.A.T. PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T. PUNE