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TMI Blog2013 (1) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... of the different issues involved, but only on the basis that the assessee's appeal before him is not maintainable. The order appealed against, though made in pursuance to a section 263 order, is nevertheless an assessment under section 143(3) of the Act and, accordingly, the first appeal there-against would lie only before the first appellate authority, being the ld. CIT(A). He, therefore, prayed for a direction for the matter being restored back to the file of the ld. CIT(A) for a decision on merits; in which case, he further clarified, he would be disinclined to press the assessee's appeal against the revisionary order, even though the assessee had a good case in respect of his appeal against the said order as well, so that the same could be dismissed as not pressed. 2.2 The ld. A.R., acceding to not press the appeal against the revision order in case the matter is restored for a decision on merits in respect of the impugned appellate order, the same was gone through. The same clarifies, in no uncertain terms, that even though the assessment under reference is titled as an assessment under section 143(3) read with section 263 of the Act, the same is in essence and substance only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractors were hired out by him; the amount earned (Rs.30,000) having been credited to the expense account 'Tractor hire charges' in accounts, claiming the balance Rs.15,16,320/- in the said account (PB page 16). That is, the claim for higher rate of depreciation is on account of tractors being given on hire. The ld. CIT did not find the assessee's explanation acceptable in view of its nonsubstantiation, for which the assessee was specifically requisitioned vide his letter dated 13.3.2009 (PB pgs. 12-13). The assessee failing to furnish any material in support of its claim, i.e., apart from the two credit entries in its accounts (to the account 'hire charges paid'), he directed for restriction of the assessee's claim to the normal 25%. Before us, the ld. A.R. pleaded for restoration to the file of the Assessing Officer for necessary verification of the assessee's claim, which was objected to by the ld. D.R. in view of the assessee having been allowed specific opportunity by the ld. CIT for the purpose, whereat the assessee failed to prove his claim (refer para 4.2 of the revisionary order). 5. We have heard the parties, and perused the material on record. We find no infirmity in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal, which rather translates into two separate disallowances/additions, is with reference to the assessee's claim for sales-tax, claimed in the sum of Rs.43.53 lakhs. A perusal of the sales-tax assessment for the relevant year by the ld. CIT, however, revealed that the assessee's liability for the year to sales-tax stands assessed at Rs.16.53 lakhs. The assessee was, accordingly, show caused in respect of its claim for the balance Rs.26.99 lakhs vide notice dated 12/2/2009 (PB pgs. 6-7). The assessee, with reference to the sales-tax assessment order for the year (PB pgs. 18-21), clarified that the sales-tax paid, as assessed, was in fact at Rs.39.34 lakhs, and that the ld. CIT had erred in stating the figure thereof at Rs.16.53 lakhs. That being admittedly the case, the ld. A.R. asseverated, the assessee had shown that the assertion made by the ld. CIT per the show cause notice is wrong, so that his order would not survive as there is no basis for a valid assumption of jurisdiction u/s. 263. Even as clarified by the Bench during the hearing, the wrong figure of Rs.16,53,127/- stated in the show cause notice notwithstanding, we could hardly disagree more with the ld. A.R. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT, the same (claimed amount) is to agree with the actual liability, and any payment in excess is only recoverable, i.e., an asset by definition, and cannot be allowed even considering the mandate of section 43B of the Act, which stipulates the condition of 'otherwise allowable'. There is, thus, no merit in the assessee's contention of the enquiry initiated by the ld. CIT as being unwarranted and in excess of his jurisdiction, i.e., given that it is not in dispute that the assessee seeks to claim - through its accounts - only the amount of sales-tax liability actually paid during a year; the same being subject to section 43B of the Act. The action of the ld. CIT in invoking sec. 263 of the Act on this ground is, thus, justified; absence of proper enquiry, where otherwise due, it is trite law, would make an order per se erroneous insofar as it is prejudicial to the interest of the Revenue [refer, inter alia, Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC); Ram Pyari Devi Sarogi v. CIT, 67 ITR 84 (SC); Swaroop Vegetable Product Industries Ltd. v. CIT, 187 ITR 412 (All.);Gee Vee Enterprises v. CIT (Addl.), 99 ITR 375 (Del.); Rajalakshmi Mills Ltd. v. ITO, 121 ITD 343 (Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estax department, as being mentioned by him, before concluding the matter, rather than merely stating of him as having not substantiated its claims, which could then have been possibly so by the assessee per his second letter dated 25/3/2009 (PB pgs. 14-15). Under the circumstances, and in the interest of justice, we, therefore, only consider it fit and proper to restore the matter back to the file of the Assessing Officer to undertake the necessary examination and verification, and decide the issue on the basis of the facts determined by him in accordance with law. 7.3 No separate consideration or adjudication qua the refund amount of Rs.1.72 lakhs is, in our view, required to be issued. This is as the assessee's explanation covers the entire amount claimed (Rs.43.53 lakhs), of which the said amount is a part. Once the assessee is able to demonstrate the payment, and the adjustment by the Sales Tax authorities (claimed at Rs. 5.91 lacs) of the amount deemed as in excess on assessment of its liability under the relevant statute for the year, against the assessed liability for earlier years, which is outstanding, no case for any addition on this count is made out. Further, by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of additional work done by it (the sub-contractor). The relevant amounts having been duly explained with reference to its accounts (PB pg. 17, 49), there is no scope for application of section 263 of the Act on this ground. This aspect, i.e., the method of accounting followed by the assessee in this regard, had been duly examined by the ld. CIT for a preceding year, i.e., assessment year 2003-04, and on being satisfied the said proceedings were dropped, and which fact was also brought to the notice of the present incumbent by the assessee vide his submission before him dated 12/3/2009 (PB pages 8-11, at pg. 11). The impugned proceedings are, thus, it was contended, without jurisdiction. 8.1 We are unable to agree with the assessee's claims. This is as, without doubt, no case would stand to arise if the assessee had shown retention of the stipulated 8%, or Rs. 12,42,529/-, with reference to its accounts for the year. The fact, however, is that the assessee retained a lower amount, claiming the same to be on account of the additional work done by the sub-contractor. Surely, the entire contract having been sub-contracted, so that the assessee is not required to perform any wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs and not Rs.179.31 lakhs, in our view, the ld. CIT was well within his rights to question the assessee on that, and direct addition of difference of addition of Rs.15.44 lakhs where he found assessee's explanation as wanting. As such, we are unable to hold that there has been an invalid assumption of jurisdiction u/s. 263 of the Act by the ld. CIT qua this aspect of the assessee's assessment. 8.3 Coming to the merits of the case, the ld. A.R. would show us that the said balance amount had been taken by the assessee under work-in-progress (WIP) (refer PB page 49). There had been, thus, no omission to account for any value by the assessee. Even though the TDS certificate/s is issued for the total value of the contract (Rs.194.75 lakhs), the assessee could recognize income in its accounts only for the value for which work is certified, and for which it can be claim to be paid (by the contractee). Even though the assessee could not satisfactorily explain as to why, in that case, credit is allowed to it by the contractee for the full amount, which was stated to be on account of the peculiar method of accounting followed by the Government Departments, we consider that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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