COMMISSIONER OF INCOME TAX vs. M/S VOLTECH PROJECTS PVT LTD

Order dt 30.7.2020 in TCA 693 of 2019 CIT v . Voltech Projects Pvt. Ltd. IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 30.7.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No.693 of 2019 Commissioner of Income Tax, Chennai.

Appellant vs M/s.Voltech Projects Pvt. Ltd., 153, Developed Plots, Electrical & Electronics Industrial Estate, Perungudi, Chennai 600 096. Respondent Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras ‘D’ Bench dated 12.9.2013 in I.T.A.No.1424/Mds/2013. For Appellant : Mr.M.Swaminathan, Senior Standing Counsel assisted by Ms.V.Pushpa Junior Standing Counsel For Respondent : Mr.S.Sridhar ORDER (Made by Dr.Vineet Kothari,J) The Court was held by Video Conference, as per the Resolution of the Full Court dated 3 July 2020, by Judges at their respective residences and the counsel, staff of the Court appearing from their respective residences. http://www.judis.nic.in Order dt 30.7.2020 in TCA 693 of 2019 CIT v . Voltech Projects Pvt. Ltd. 2. This Tax Case has been filed by the Revenue, calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, ‘D’ Bench dated 12.9.2013 in I.T.A.No.1424/Mds/2013, for the Assessment Year 2009-10, by raising the following substantial questions of law: "(i) Whether in tne facts and circumstances of the case, the Tribunal was right in holding that the retention money of Rs.3,94,28,431/- on contract cannot be included in the Assesee's income for the AY.2009-10? (ii) is not the Tribunal wrong in holding that the retention amounts cannot be considered as income of the Assessee because such amounts were still to be received, when the Assessee follows the Mercantile System of Accounting and income is to be assessed on "accrual basis"? (iii) Is not the Tribunal wrong in not considering the fact that in so far as retention amounts are concerned, the income has "accrued" to the Assessee herein by virtue of work done in AY.2009-10 and it is only the payment of the same that has been postponed and therefore the retention amounts form a part of the income of the Assessee for the http://www.judis.nic.in Order dt 30.7.2020 in TCA 693 of 2019 CIT v . Voltech Projects Pvt. Ltd. AY.2009-10?" 3. Heard Mr.M.Swaminathan, learned Senior Standing Counsel appearing for the Appellant/Revenue and Mr.S.Sridhar, learned counsel appearing for the Respondent/Assessee. 4. The learned Senior Standing Counsel for the Appellant/Revenue submitted that the Assessee's own case for the previous Assessment Year 2008-2009 has been decided in favour of the Assessee by a co-ordinate Bench of this court in T.C.A.No.513 of 2014 on 25.11.2014. 5. The short order passed by the co-ordinate Bench is quoted below for ready reference:- " The respondent-assessee is engaged in contract business and in the memo of income, it had claimed deduction of the amounts retained by its clients as per the contracts. According to the assessee, as the amounts were not received, they cannot be considered as part of income for the impugned assessment year. The original authority, while considering the decision of this Court in Commissioner of Income Tax v. Ignifluid Boilers (P) Ltd., [(2006) 283 ITR 295)], was of the view that since the issue was pending before the Supreme Court and that such a claim is of http://www.judis.nic.in Order dt 30.7.2020 in TCA 693 of 2019 CIT v . Voltech Projects Pvt. Ltd. recurring nature, declined to extend the benefit to the assessee. The Commissioner of Income Tax (Appeals), however, laying emphasis on the decision of this Court in Ignifluid Boilers (P) Ltd., case (supra), allowed the appeal of the assessee and the department's appeal before the Tribunal was dismissed holding that the decision of the jurisdictional High Court is binding on the Tribunal and therefore there was no reason to differ with the findings of the Commissioner of Income Tax (Appeals). The said order of the Tribunal is under challenge before us. 2. When the matter was taken up for admission, the learned counsel for the appellant fairly pointed out that the Special Leave Petition preferred by the department in C.C.No.4879 of 2006 against the decision of this Court in Ignifluid Boilers (P) Ltd., case was dismissed by the Supreme Court by order dated 17.7.2006. 3. Since the issue raised in this appeal had already been decided against the department by the Supreme Court in C.C.No.4879 of 2006 dated 17.7.2006 (Commissioner of Income Tax v. M/s Ignified Boilers India Ltd.) and in C.C.No.9463 of 2006 dated 12.12.2006 (Commissioner of Income Tax v. East Coast Constructions & http://www.judis.nic.in Order dt 30.7.2020 in TCA 693 of 2019 CIT v . Voltech Projects Pvt. Ltd. Industries Limited), no question of law arises for consideration. Accordingly, the tax case appeal is dismissed." 6. The controversy involved in the present Appeal is covered by the said Judgment. Respectfully following the said view of the co- ordinate Bench, we dismiss the present Appeal of the Department and answer the questions in favour of the Assessee and against the Revenue. No order as to costs. (V.K.J.) (K.R.,J.) 30.7.2020 ssk. Index:Yes/No Internet:Yes/No http://www.judis.nic.in Order dt 30.7.2020 in TCA 693 of 2019 CIT v . Voltech Projects Pvt. Ltd. Dr.VINEET KOTHARI, J. and KRISHNAN RAMASAMY, J. ssk. T.C.A.No.693 of 2019 30.7.2020 http://www.judis.nic.in