What did the Tribunal hold?

The Tribunal restored the issue to the Assessing Officer for factual verification regarding the assessment of the impugned income component in the subsequent assessment year. The assessee was directed to appear before the AO with necessary details.

The assessee claimed a difference between Form 26AS and its books of accounts was due to excess payment towards advances, not revenue. The CIT(A) confirmed the addition of Rs. 3,78,77,506/-.

What were the issues?

Whether the difference between Form 26AS and the assessee's books of accounts, attributed to mobilization advances, was correctly treated as income by the CIT(A).

Vijay Bhavani Constructions… vs ITO | ITAT Hyderabad 2021

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

O R D E R PER S.S.GODARA, J.M. :

This assessee’s appeal for AY.2014-15 arises from the CIT(A)-5, Hyderabad’s order dated 13-03-2018 passed in appeal No.0403/2016-17/CIT(A)-5, CIT(A), Hyderabad-5/ 10465/2016-17 in proceedings u/s.143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both parties. Case file perused.

The assessee has raised the following substantive grounds in the instant appeal:

1. The order of the Ld.CIT(A), is erroneous both on acts of the case and in law to the extent the order is prejudicial to the interest of the assessee. 2.The Ld CIT(A) erred in confirming the addition for an amount of Rs.3,78,77,506/-. stating that there was a difference in the Form 26AS and the assessee books of accounts. 3.The CIT(A) ought to have appreciated the fact that out of the receipts from M/s K N R Construction Ltd are Rs.8,41,12,672/-, the actual amount is Rs.4,62,35,166/-. is admitted in P & L a/c , the difference amount of Rs.3,78,77,506/- is due to excess payment towards advances. 4.The Ld.CIT(A) erred in differentiating the receipts between revenue generated and the mobilisation advances received by the assessee during the year. 5.The Ld.CIT(A) ought to have appreciated the fact that money received as mobilisation advance cannot be treated as income of the assessee. 6.The Ld.CIT(A) ought to have appreciated the fact that assessee has declared the income based on work certified. 7.The Ld.CIT(A) erred in not considering the explanation given by the assessee with regard to mobilisation advances received during the year has been offered to income in subsequent year as income. 8.The assessee may add, alter or modify any other points to the grounds of appeal at any time before or at the time of hearing of the appeal

It emerges from a perusal of the assessee’s foregoing pleadings that its sole argument is that the impugned sum indicating difference between Form-26AS viz-a-viz that declared in its books of account already stands assessed as income in AY.2015-16.

Mr.Rao has also sought to invite our attention to assessee’s Profit and Loss Account pertaining to the said subsequent assessment year to this effect. Faced with this peculiar situation, we deem it appropriate that larger interest of justice would be met in case the issue is restored back to the Assessing Officer for his necessary factual verification regarding assessment of the impugned income component in AY.2015-16. The assessee or its authorised representative shall appear before the Assessing Officer on or before 31-08- 2021 along with all the necessary details to be followed by three effective opportunities of hearing; at its own risk and responsibility.

This assessee’s appeal is treated as allowed for statistical purposes in above terms.

Order pronounced in the open court on 18th March, 2021

VIJAY BHAVANI CONSTRUCTIONS PRIVATE LIMITED,HYDERABAD vs. INCOME TAX OFFICER, WARD-17(4), HYDERABAD

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