ODISHA CONSTRUCTION CORPORATION LTD.,BHUBANESWAR vs. DCIT, CIRCLE-2(2), BHUBANESWAR

per law.

confirmation of following additions:

i) Understatement of income : Rs.27,03,097/- ii) Int. on construction work advance for more than 20 years : Rs.1,06,05,000/- iii) Hire charges of machinery rolling since long: Rs.5,53,000/- iv) Long outstanding guarantee fees to Govt. Rs.7,71,000/- v) Non deposit of BOT, CPF : Rs.15,21,579/- vi) Excess provision of leave salary : Rs.32,86,000/-

addition of understatement of income of Rs.27,03,097/- submitted that

necessary adjustments have been made in the subsequent years. As the

assessee follows mercantile system of accounting, all incomes accruing or

arising to the assessee during a particular accounting year have to be

taxed in that year, notwithstanding whether same has been shown in a

subsequent year. He also submitted that the assessee has offered

Rs.27,03,097/- as income and due tax has already been paid in

subsequent year. He also referred to the calculation made by the auditor

placed at page 151 & 152 of paper book. Therefore, the addition made

by the authorities are not justified.

more than 20 years of Rs.1,06,05,000/-, ld A.R. submitted that the above

liability has been arrived after some adjustment made during the financial

year 2005-06 against the work advance. He submitted that the above

liability is lying since financial year 2005-06 and this being an outstanding

liability requires a lot of formality and involves a lot of compliance and

approval from the State Government for adjustment and, therefore, it

remained as outstanding and there being no transaction during the

impugned year, it has no tax impact on the assessee.

Rs.5,53,000/-, ld A.R. submitted that the liability is awaiting adjustment

since long and requires a lot of formality and approval of the Government

of Odisha and there being no tax impact on the assessee.

submitted that there is typographical mistake in mentioning the addition

of Rs.7,71,000/- whereas it should be Rs.7,21,000/-. He submitted that

the above amount recorded in the books of account payable to

Government of Odisha as guarantee fees since 1982, which awaits

adjustment against the amount payable/receivable from Govt. of Odisha.

Therefore, the above liability remained as outstanding.

deposit of BOT, CPF, ld A.R. submitted that there is a CPF trust in the

Corporation to manage the Provident Fund of the regular employees. The

contribution of the employees and the matching contribution of the

management are managed by the Trust. He submitted that for the

financial year 2009-2010 & 2010-2011, there was a short fall of BOT, CPF

of Rs.18,89,067.75. Therefore, the Trust made a claim to the

management for payment of this amount to balance their expenditure.

The above fund has been considered under the head “contribution to

statutory short fall payable to BOT, CPF” in the books of account and the

amount has been paid/adjusted during the financial year 2012-13 and

2013-14. He also referred to paper book Annexure-5 placed at pages

155 to 159 wherein, the relevant journal vouchers and payment vouchers

are placed.

contribution of Rs.32,85,784/-, ld A.R. of the assessee submitted that the

addition of Rs.32,85,784/- is a differential cumulative figure of calculation

made by the assessee and A.G. at Rs.551.96 and Rs.519.10 lakhs

respectively. Ld A.R. referred to comparative calculation sheet for three

financial years i.e. 2009-10, 2010-11 and 2011-12 placed at paper book

page 160. He submitted that the excess provision for leave salary and

pension contribution is the difference between the closing balance of

leave salary and pension contribution as on 31.3.2012 as calculated by

the assessee and Accountant General.

authorities. We observe that many of the additions are outstanding since

long from the Government of Odisa for adjustments. As the assessee is a

Government of Orisha Undertaking, it is hopeful that the same will be

adjusted. In this case, the assessee follows mercantile system of

accounting. According to past business practice, the expenditure spilled

over the next year and was debited in the subsequent years and to be

examined by the Assessing officer. Therefore, in order to impart

substantial justice, we are of the considered view that one more

opportunity is to be provided to the assessee to represent its case with

relevant documents filed in the appellate proceedings before the

Assessing Officer. We, accordingly, set aside the order of the CIT(A) and

remit the entire issues to the file of the Assessing Officer for fresh

adjudication. The Assessing Officer is directed to provide reasonable and

proper opportunity of hearing to the assessee

for statistical purposes.

Order pronounced on 26/12/2017.

Sd/- Sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Cuttack; Dated 26/12/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Assessee: Odisha Construction Corpn. Ltd., Unit-8, Gopabandhu Nagar, Nayapali, Bhubaneswar. 2. The Respondent. ACIT, Corporate Circle- 1(2), Bhubaneswar 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// BY ORDER,

SR.PRIVATE SECRETARY ITAT, Cuttack