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Income Tax Appellate Tribunal, MUMBAI BENCHES “J”, MUMBAI
Before: Shri Sanjay Garg, & Shri Ashwani Taneja
Per Ashwani Taneja (Accountant Member): This appeal has been filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)-16, Mumbai {(in short ‘CIT(A)’}, dated 27.12.2013 for the assessment year 2008-09, passed against the assessment
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order passed by the Assessing Officer (in short ‘AO’) u/s 143(3) of the Act, on the following grounds:
“1. On the facts and circumstances of the case and in law Ld. CIT(A) erred in admitting additional evidence without remanding the matter back to AO.”
On the facts and circumstances of the case and in law Ld. CIT(A) erred in admitting additional evidences in contravention of Rule 46A.”
On the facts and circumstances of the case and in law Ld. CIT(A) erred in deleting the addition of Rs.3.30,00,000/-.”
During the course of hearing, arguments were made by Shri Vinod Modi, Authorised Representative (AR) on behalf of the Assessee and by Shri K Mohandas, Departmental Representative (DR) on behalf of the Revenue.
The brief facts of the case are that assessee was in the business of execution of a project for civil works for construction. During the course of assessment proceedings, it was noted by AO that as per TDS certificate filed the assessee received Rs.52,15,26,071/- whereas it disclosed the gross receipts of Rs.34,62,40,355/- in its return of income. On further analyses, it was noted by the AO that the assessee has received an aggregate amount of Rs.3.30 crores which has been credited under the head
3 Jager Gammon Joint Venture other advances. It was concluded by the AO that assessee should have included this amount already its income, therefore, he held that assessee has suppressed his gross to this extent, and therefore, a sum of Rs.3.30 crores was added to the income of the assessee.
Being aggrieved the assessee filed an appeal before the Ld. CIT(A).
The detailed submissions were made along with various documentary evidences before Ld. CIT(A) and after considering the same it was found by the Ld. CIT(A) that addition made by the AO was not valid, since the assessee had included the impugned sum in its turnover on accrual basis and therefore, the addition made by the AO was deleted.
Being aggrieved, the revenue filed an appeal before the Tribunal.
During the course of hearing before us Ld. DR relied upon the order of the AO and drew our attention to ground nos.1 and 2 raised in this appeal by the revenue contending that Ld. CIT(A) admitted additional evidences in contravention of rule 46A. He relied upon the order of the AO with respect to addition made in the order. Per
4 Jager Gammon Joint Venture contra Ld. Counsel of the assessee submitted that no additional evidences were submitted, and all the evidences enclosed in the paper book filed by the AO as well as Ld. CIT(A) except page no.90 which was a plain confirmation letter dated 24.08.2013 received from NHPC Ltd., which simply clarified and supported the other information and documentary evidences filed before the AO. On merits, it was submitted by him that addition made by the AO was factually incorrect, there was no suppression of income. The advance received was not taxable and total amount of income was correctly shown by the assessee in its return of income.
We have gone through the orders of the lower authorities, paper book filed before us and submissions made by both the sides. With regard to the additional evidences, it is noted that Ld. DR was not able to point out what additional evidences were considered by the Ld. CIT(A). We had confronted before him, paper book along with certificate filed by the assessee certifying that all the documents were filed before the AO also except confirmatory letter dated 24th August 2013 from NHPC. It is noted that the said confirmatory letter was simply confirming the other various details and documentary evidences submitted before the AO. The Ld. CIT(A) has taken into account mainly other documentary evidences
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while deciding this issue in favour of the assessee. No counter affidavit or paper book has been filed by the Ld. DR and no assessment records have been produced by him before us to negate the submissions of the assessee that all the documentary evidences were filed before the AO. It is noted by us that no serious and substantive arguments have been made by the Ld. DR in support of its ground with respect to additional evidences in contravention of rule 46A, thus, we find no substance in these grounds and, therefore, ground nos.1 and 2 are dismissed.
Ground No.
This ground is with regard to deletion of addition by Ld. CIT(A). It is noted by us that Ld. CIT(A) has considered and taken into account all the details and documentary evidences brought before him to show that no addition was called for. Concluding para of Ld. CIT(A)’s order is reproduced hereunder for ready reference:
“The AO’s order the contentions of the appellant, and materials on record have been considered. The AO has made addition of other advances of Rs.3,30,00,000/- received by the appellant from NHPC, (while Plant Advances and Material Advances have been accepted by the AO as advances) stating that the same was received by the appellant without deduction of TDS and the same has not been included in the appellant's
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turnover, and that the appellant is following a hybrid system of accounting as against a mercantile system claimed to be followed. The appellant claims that these are releases of ad hoc payments (part payment) against respective running account bills arid escalation Bills raised by the appellant upon NHPC and the receipts of Other advances were adjusted by NHPC against release of balance payment upon full and final settlement of the said bills. Further that the said amount has been included on accrual basis in the total receipts of Z 52,15,26,071/- which is reflected in TDS certificate issued by NHPC. Further that due to an inadvertent and bona fide mistake, instead of adjusting the receipt of other advances against Current Liabilities, the appellant showed the said advance in another ledger account as 'Other Advances' which are actually nullifying contra entries, which were rectified in the succeeding previous year. The appellant has demonstrated by way of entries in ledger accounts, receipts reflected in bank statements and Statement of reconciliation of turnover, that in fact the said amount of Rs. 3.30 crores was included in the turnover on accrual basis, and on actual receipt of part payment the same was adjusted to the running bills and escalation bills account, albeit the appellant made an error in not making adjustment in the same account but entered the receipt of such bill adjustment in a separate account which ended up in the Balance Sheet as 'Other Advances". Since the appellant has shown the receipt on accrual basis following the mercantile
7 Jager Gammon Joint Venture system of accounting, the same amount cannot be added once again upon its actual receipt. The addition made by the AO is thus unjustified and is deleted.”
From the aforesaid analysis and findings of the Ld. CIT(A). It is noted that the advance received by the assessee from NHPC has been included on accrual basis in the total receipt as and when bills were raised. We do not find here any case of suppression of receipts by the assessee. The assessee has given complete details to match facts and figures and proved on facts that impugned amount of Rs.3.30 cores was included in the total turnover. The addition made by the AO had apparently led to the double addition, which is not permitted under the law. Factual findings of Ld. CIT(A) could not be controverted by the Ld. DR. We do not find anything wrong in the order of Ld. CIT(A) and therefore, same is upheld and ground no.3 of the revenue’s appeal is also dismissed.
In the result, appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 24th February, 2016. (Sanjay Garg ) (Ashwani Taneja) "या"यक सद"य / JUDICIAL MEMBER लेखा सद"य / ACCOUNTANT MEMBER मुंबई Mumbai; "दनांक Dated : 24/ 02/2016 ctàxÄ? P.S/."न.स.
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आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant
""यथ" / The Respondent. 3. आयकर आयु"त(अपील) / The CIT, Mumbai. 4. आयकर आयु"त / CIT(A)- , Mumbai
"वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, स"या"पत ""त //// उप/सहायक पंजीकार (Dy./Asstt.