TMI Blog2012 (5) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in procuring black wire from the local market which has been sufficiently explained to the satisfaction of the authorities. - Decided in favor of assessee. Regarding retention money - Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT (1996 - TMI - 5626 - SUPREME Court - Income Tax) which permits the Tribunal to admit the additional ground as it does not require any investigation of facts and it can be adjudicated upon - Appeal is allowed by way of remand to AO - ITA No. 39/Kol/2010; - - - Dated:- 29-11-2011 - S.V. Mehrota, N. Vijaya Kumaran, JJ. S.K. Tulsiyan and S.K. Das Sharma for the Appellant R.K. Saha for the Respondent ORDER N. Vijaya Kumaran, Judicial Member 1. This appeal by the assessee is directed against the order of Ld. CIT(A)-XXXVI, Kolkata dated 30.10.2007 for Assessment Year 2004-05. 2. The first ground is of addition of Rs.5,55,034/- under section 69 of the Act. The Assessing Officer observed in his order that that the assessee has not shown work-in-progress with profit and loss Account for the relevant previous year ended with 31.03.2004. However, assessee claimed the expenses used in the on going work bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. I have also perused the assessment record. The details of contract receipts indicate that the bills for Rs.36,94,964/- and Rs.909032/- (which were taken by the A.O. to work out the work-in-progress at Rs.511555/- were already received during the previous year and admitted in the return of income. Therefore, the above amount cannot be categorized as work in progress. Therefore the A.O actually treating the same as undisclosed investment is not correct" This contradictory finding of the Ld. CIT(A) and the assessee explained the consistent practice followed in past years also and without finding that by this consistent practice the assessee suppressed the taxable income. The restricted addition is not justified is the argument of Ld. Counsel for the assessee. 6. On the other hand, Ld. Departmental Representative supported the findings of the authorities below. It is clear understatement of profit by the assessee, hence this claim of assessee to be rejected in the argument of the Ld. Departmental Representative. 7 We have heard the rival submissions and perused the material available on record including the precedents. 8. The choice of the method of accounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee utilized the services of Mr. S. Das in getting local suppliers of construction materials. The assessee followed this practice of procuring suppliers from the local markets, from other individuals also. So, the Black-wires needed for the embankment project was purchased locally from Shri Pintu Jain through Mr. S. Das, who provided the said supplier and Mr. S. Das arranged the credit facility for the purchase, to the assessee as guarantor. Mr. S. Das also in his statement given on 09.06.2008, which is reproduced hereunder:- "It is a fact that I requested the supplier Sri Pintu Jam to allow credit sales to you. It is also known to one that Pintu Jain sent in 7 bills through and valued at Rs.13,85,600/- Please note that I withdrew Rs.4,00,000/- and Rs.7,00,000/on 18/04/2003 and 08/09/2003 but made the payments in cash to Sri Pintu Jain, supplier of black wires in the following manner............. I further state that on payment of Rs.11,00,000/- to Pintu Jain, remaining amount payable to Sri Jain should be Rs.2,85, 600/-" 10. Under the above factual position the Assessing Officer who tested Mr. S. Das under section 131 summon on 26.12.2006 and the said Mr. S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Assessing Officer is that the name of the supplier. There is difference which made a doubt in the mind of the Assessing Officer. It is amply proved that the genuineness of the purchase and payments were made duly out of the bank account of the assessee and it is not in dispute also before us. It is also for the purpose of business that the black wires have to be purchased and that black wires were used in the said contract as per the contract terms with the Government. It is an embankment of river situated in rural and urban areas and for this embankment the black wires is required to start the original work contract. The original work contract was in the embankment of the river bank bed and also of repairing barrage under the Farakka Barrage Project. The assessee's accounts were also audited and he is a regular income-tax assessee. The profit and loss account and Balance Sheet were also furnished before the Assessing Officer. The bill details were available in the assessee's paper book at page 42 to 48 in which name of Mr. S. Das was mentioned with relevant account number of M/s. Md. Muslim Seikh. The black wire purchase details/quantity were also mentioned. It clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. (179 ITR 0008), the retention money" of Rs.9,33,399/- @ 10.00% of the Gross bill amount), not being the income of the assessee for the year under appeal, may kindly be reduced from the reasonable income of the assessee firm." 14. The additional ground is the taxability of retention money which was not raised before the authorities. The Ld. Counsel submitted that it was not raised before the authorities and the facts are readily available which requires no investigation. Hence, it can be admitted and decided by the Tribunal in accordance with law. Further proposition that Ld. Counsel decided on the decision of Hon'ble Calcutta High Court in the case of CIT vs. Simplex Concrete Piles (India) Pvt. Ltd. 179 ITR 0008 and contended that it is a covered matter that retention money not being the income of the assessee for the year under appeal, it should be reduced from the assessable income from the assessee-firm. Ld. Counsel, therefore, politely submitted that the decision of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT 229 ITR 383 (SC) which permits the Tribunal to admit the additional ground as it does not require any investigation of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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