ITO, WARD-10(2), KOLKATA, KOLKATA vs. MULTIPLE CONCRETE PVT LTD, KOLKATA

PDF · subscribers
ITA 1227/KOL/2024Status: DisposedITAT Kolkata24 February 2025AY 2012-13Bench: SHRI RAJESH KUMAR (Accountant Member), SHRI PRADIP KUMAR CHOUBEY (Judicial Member)8 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the AO's order was cryptic and based on a misunderstanding of the assessee's accounts. The CIT(A)'s detailed order, which differentiated between cost of construction and sales, was found to be reasoned and was upheld.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting an addition of ₹8,75,21,860/- made by the AO on account of alleged suppressed sales, while upholding an addition of ₹41,41,728/-. The AO had made a large addition based on comparing opening and closing work-in-progress for construction contracts.

What were the issues?

Whether the AO was correct in treating the difference between opening and closing work-in-progress as suppressed sales when the assessee is a contractor and not a property seller.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri S.K. tulsiyan&, Ms. Puja Somani, ARs
For Respondent: Shri Subhendu Datta, DR
Hearing: 10.02.2025Pronounced: 24.02.2025

This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 10.01.2024 for the AY 2012-13.

2.

The only issue raised by the Revenue is against the deletion of addition of ₹9,16,63,588/- by CIT (A) as made by the ld. AO on account of suppression of sale by the assessee .

3.

The facts in brief are that the assessee filed the return of income on 11.04.2013, declaring total income at ₹1,15,920/-. The case of the assessee was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) and statutory notices along with questionnaire were

4.

In the appellate proceedings, the ld. CIT (A) partly allowed the appeal by sustaining the addition to the extent of 41,41,728/- and deleting the addition of ₹8,75,21,860/- by observing and holding as under:-

“6.2 Ground no. 2, 3 & 4: These pertain to the plea that the AO was not correct in making additions of Rs. 9,16,63,588/- on account of suppressed sales. 6.2.1 During the appeal proceedings, the appellant submitted that it is mainly engaged in the business of construction and development of properties. It was stated that Schedule 19 of audited accounts contains the details of Cost of Construction in Progress which was debited to the Profit and Loss A/c. It was submitted that the same was expense for the appellant-company for the preceding year ending 31/03/2011 and current year ending 31/03/2012 and not Opening WIP and Closing WIP as alleged by the AO. The appellant stated that the AO misunderstood the accounts of the appellant. For example, it was explained, that the cost of construction in progress relating to construction works of Onkar Society for Engineering and Technological Research and Development for the immediately preceding year ending 31/03/2011 was Rs.1,35,45,400/- and for the current year ending 31/03/2012 since no cost was incurred in relation to construction works of the said party, the cost as on 31/03/2023 was reported at Rs.0. It was stated that the AO mistook the cost of construction in progress for the year ending 31/03/2011 as Opening WIP and the cost of construction

6.

After hearing the rival contentions and perusing the materials available on record, we find that in this case the ld. AO has passed a very cryptic order and making addition by comparing the opening and closing WIP and then recording a conclusion in two lines that assessee has suppressed sales recorded outside the books of account. We have perused the appellate order in which the ld. CIT (A) has dealt with the receipts from each party for which the assessee executed contracts during the impugned financial year. Therefore, we do not find any infirmity in the order of ld. CIT (A) and same is upheld by dismissing the appeal of the Revenue. Moreover, the appellate order has already been affirmed by the Tribunal while deciding the assessee’s appeal. Consequently, the appeal of the Revenue is dismissed.

7.

In the result, the appeal of the Revenueis dismissed.

Order pronounced in the open court on 24.02.2025.

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →