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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI ANIL CHATURVEDI, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER VIKAS AWASTHY, JM
This appeal by Revenue is directed against the order of Commissioner of Income Tax (Appeals)-1, Pune dated 14.09.2016 for the assessment year 2012-13.
The Revenue has assailed the findings of Commissioner of Income Tax (Appeals) by raising following grounds:
2 ITA No.2771/PUN/2016 A.Y.2012-13
“1. The order of the Ld. Commissioner of Income-tax (Appeals) is contrary to the law and on facts and in the circumstances of the case.
The Ld.CIT(A) erred in deciding that retention money has to be taxed in the year of receipt and not on accrual basis even though assessee is following mercantile system and assessee has debited all expenditure related to such contract receipt including retention money.
The Ld. CIT(A) erred in confirming the view of assessee that retention money has to be excluded in computation of income, although the same has been shown as receipt during the year and credited in profit and loss account.
The Ld. CIT(A) erred in confirming the view of assessee that retention money has to be excluded in computation of income in view of decision of the Bombay High Court in the case of Associated Cables (P.) Ltd. Vs. Dy.CIT [2006] reported in 286 ITR 596 (Bom.) although the facts of present case is distinguished. 5. For these and such other grounds as may be urged at the time of hearing, the order of Ld. Commissioner of Income Tax (Appeals) may be vacated and that of the Assessing Officer be restored.
The appellant craves to add, amend, alter or delete any of the above ground of appeal during the course of appellate proceedings before the Hon'ble Tribunal.”
Shri Nikhil Pathak appearing on behalf of the assessee submitted that
the assessee is engaged in the business of construction contractors, civil
and structural engineers, fabricators and manufacturing of post-harvest
equipment, exploration and development of oil and gas producing activities.
The ld. AR submitted that the assessee offers retention money to tax in the
year in which it is received. The assessee has been consistently following
this method of accounting qua retention money. During the course of
scrutiny assessment proceedings, the Assessing Officer made addition of
Rs.22,34,92,287/- on the ground that the retention money is to be brought
to tax in the year, it has become due. The ld.AR further submitted that
addition of retention money for similar reasons were made in earlier
assessment years starting from assessment year 2003-04. The matter
travelled upto the Tribunal. The Tribunal in ITA Nos.727 to 730/PN/2012,
vide order dated 31.10.2013 in assessee’s own case for assessment years
3 ITA No.2771/PUN/2016 A.Y.2012-13
2003-04, 2006-07, 2007-08 & 2008-09 concurred with the view of assessee
and deleted the addition. The Tribunal in ITA No.1146/PN/2014, for
assessment year 2010-11 decided on 15.01.2016 and in ITA
No.1330/PN/2015 for assessment year 2011-12 decided on 24.11.2017
following earlier orders of Tribunal decided the issue in favour of assessee.
The Commissioner of Income Tax (Appeals) following the judicial discipline
has deleted the addition by placing reliance on the order of Tribunal in ITA
Nos.727 to 730/PN/2012 (supra.).
Shri G.P. Chandrakar representing the Department vehemently
defended the assessment order. However, ld. DR fairly admitted that the
issue raised by Revenue in the present appeal has already been decided by
the Tribunal in assessee’s own case in earlier assessment years.
We have heard the submissions made by representatives of rival sides
and have perused the orders of Authorities below. The solitary issue raised
in present appeal by the Revenue is against deleting addition of retention
money. We find that this issue is recurring since assessment year 2003-04.
The Tribunal for the first time in bunch of appeals in assessee’s own case in
ITA Nos.727 to 730/PN/2012(supra.) after considering the assessee’s claim,
in principle directed for exclusion of retention money subject to verification
of quantum. Thereafter, the Tribunal in appeal of the assessee for
assessment year 2010-11 (ITA No.1146/PM/2014) & assessment year 2011-
12 (ITA No.1330/PUN/2015) has taken a consistent view in deleting the
addition subject to verification in similar terms. For the sake of
completeness, the relevant extract of the findings of the Tribunal in ITA
No.727 to 730/PN/2010(supra) are reproduced herein below:
4 ITA No.2771/PUN/2016 A.Y.2012-13
“25. In so far as the merits of the claim is concerned, no doubt in principle the same is covered by the ratio of the judgement of the Hon'ble Bombay High Court in the case of Associated Cables P. Ltd. (supra). The assessee has also furnished the year-wise working of the claim of excluding income on account of retention money for the assessment years in question. 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 authorities below. Ostensibly, the Assessing Officer as well the CIT(A) have not examined the merits of the claim because the same was rejected at the threshold itself. At the time of hearing, the appellant has preferred Additional Grounds of Appeal re-quantifying the claim for assessment years 2007-08 and 2008-09 in the 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 workings of the claim for assessment years 2007-08 and 2008-09, we restore the matter back to the file of the Assessing Officer. The Assessing Officer shall examine the working of the claim made by the assessee, including the revised workings consequent to non-admission of similar claim for assessment years 2003-04 and 2006-07, and thereafter allow the appropriate claim as per law. Needless to say, the Assessing Officer shall allow the assessee a reasonable opportunity of furnishing appropriate details in support of the claim and only thereafter the Assessing Officer shall adjudicate it as per law and re-compute the total income accordingly for the assessment years 2007-08 and 2008-09.”
The issue has been laid to rest by the Tribunal holding exclusion of
retention money and the Revenue has not brought on record any contrary
decision. Thus, in the light of the orders of Tribunal in assessee’s own case
for earlier assessment years, we uphold the findings of Commissioner of
Income Tax (Appeals) and dismiss the grounds raised by the Revenue.
In the result, appeal of the Revenue is dismissed. 6.
Order pronounced on Friday, the 07th day of September, 2018.
Sd/- Sd/- (अ�नल चतुव�द� /ANIL CHATURVEDI) (�वकास अव�थी /VIKAS AWASTHY) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 07th September, 2018 SB
5 ITA No.2771/PUN/2016 A.Y.2012-13
आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-1, Pune. 4. The Pr. CIT-1, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.