New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (5) TMI 391 - ITAT DELHI

2015 (5) TMI 391 - ITAT DELHI - TMI - Addition on account of difference in contract receipts shown by the appellant and accounted for by the customer M/s Uniproducts India Ltd. - Held that:- Assessee company is in the business of the building contract work and has followed AS-7 accounting standard, while finalizing account as per mercantile system. The ld CIT(A) and AO erred in not taking notice the working submitted by the assessee wherein the assessee has shown the working demonstrating that r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

und that the said party was not traceable - Held that:- assessee has purchased steel from M/s Amit Steel but it was wrongly shown in the account of M/s Dharam Steel, because both the concerns belonged to the same person. And the mistake was clerical in nature. The assessee has pointed out the mistake which has arisen and on perusal of the Remand Report of the AO in which the Inspector’s Report wherein the Inspector has clearly mentioned that the M/s Amit Steel and Dharam Steel belongs to one and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dition in dispute made on this account. - Decided in favour of assessee.

Disallowance of the service tax payable under section 43B - Held that:- We find from the records that the Service Tax payable has not been claimed as deduction in the P&L account. We further find that assessee is following the mercantile system of accounting. Similar case was decided by the Hon’ble Jurisdictional High Court in the case CIT vs. Noble & Hewitt (I) P. Ltd. (2007 (9) TMI 238 - DELHI HIGH COURT ) has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee. - Decided in favour of assessee.

Disallowance under section 40(a)(ia) - Held that:- Amount given to Arjun Singh was 42,300, Krishan ₹ 12,000/- and NTS Scaffolding ₹ 15,000/- which total amounting to ₹ 69,320/- which is admittedly less than the threshold limit of ₹ 1,20,000/- given in section 194I of the Act. Hence, we find force in the contention of the Ld. AR in this regard, so we direct the deduction of ₹ 69,320/-, out of ₹ 18,03,690/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee are as follows:- 1. That in the facts and circumstances of the case and in law the order passed by Ld. Commissioner of Income Tax (Appeal), in short "CIT(A)", to the extent challenged in this appeal is perverse and against the settled principles of law and therefore liable to be set aside and returned income to be accepted save admitted disallowances. 2. That in the facts and circumstances of the case and in law the Ld. CIT(A) erred in upholding addition of ₹ 1,09,92,260 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n accounted for and assessed in next assessment year. 3. That in the facts and circumstances of the case and in law Ld. CIT (A) in perversity of facts upheld addition of ₹ 16,61,161/-under section 69 of Act on account of purchases made from M/s. Amit Steel. 4. That in the facts and circumstances of the case and in law Ld. CIT (A) erred in upholding disallowance of service tax of ₹ 15,64,994/- under section 43 B of act. 5. That in the facts and circumstances of the case and in law Ld. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ings, it was noticed by the AO that the receipts of the assessee as per the P&L Account did not match the receipts as per the total reflected in the TDS certificates furnished from its client M/s Uniproducts India Ltd. On being summoned M/s. Uniproducts appeared before the AO and filed copy of account of the assessee in its books along with copy of bills issued by the assessee company during the year. From the perusal of the account of the assessee company in the books of M/s Uniproducts, it .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

booked in the next year without giving any reasons. The AO did not accept the said contention of the assessee and held that the assessee s contention that part of the bills have been accounted for in the next year cannot be accepted when the expenses related to the work done in respect of those bills have been booked by the assessee in the present year. Therefore, the difference of ₹ 1,09,92,260/- net of service tax was added to the income of the assessee. 6. On appeal before the ld CIT(A) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

thus, the receipt was shown less for a sum of ₹ 1,09,92,260/-. According to Shri Ashwani Teneja, case of the assessee is that assessee being a construction company has to follow the Accounting Standard (AS) -7 according to which a company engaged in construction business has to follow revenue recognition method based on percentage completion. Therefore, the revenue was recognized less in this year but it has been recognized in the next assessment year i.e. A. Y. 2009-10. It was pointed out .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ccording to Shri Ashwani Taneja the Hon'ble Delhi High Court in the following cases have held that if tax rates in both the years are same, it should not be of much concern as to whether income gets taxed in one year or in the other year. CIT vs. Vishnu Industrial Gases (P) Ltd. in ITR no. 229/1988 dated 06.05.2008 CIT Vs. Dinesh Kumar Goel (331 ITR 10 (Del) CIT Vs. Excel Industries Ltd. (2013) 38 taxmann. Com 100 (SC)/ 358 ITR 295 (SC) 8. On the other hand, the ld DR relied on the order of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re is no dispute that in the subsequent accounting year, the assessee did make imports and did derive benefits under the advance licence and the duty entitlement pass book and paid tax thereon. Therefore, it is not as if the Revenue has been deprived of any tax. We are told that the rate of tax remained the same in the present assessment year as well as in the subsequent assessment year. Therefore, the dispute raised by the Revenue is entirely academic or at best may have a minor tax effect. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in Page 95, 96 and 221 of the Paper Book, wherein the assessee has shown the working demonstrating that revenue earned from M/s Uniproduct Ltd, has been shown in the accounts on the percentage completion method. So viewed from this angle also the action of the authorities below is legally and factually untenable. So we find no justification to make the addition and so we allow the said ground of the assessee and direct the AO to delete the impugned addition made on this account. 11. Ground No.3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

are ₹ 38,59,019/- whereas as per the party it has made sales of ₹ 21,91,993/- only. Further, AO noted that there was a difference in the credit balance also. These facts were confronted to the counsel of the assessee vide order sheet entry dated 21.12.2010 and he was asked to explain as to why adverse inference be not drawn from these facts. As the appellant failed to produce its books of accounts during the course of assessment proceedings and notices issued by the AO to verify suc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es. The matter was remanded to the AO for comments. Therein it was stated by the AO in his remand report "To verify the genuineness of the documents and transactions, an Inspector of Income-tax was deputed to make local enquires and to confirm the transactions. He has reported as under: Inspector Report I, Hemminlun Haokip, Inspector of Income-tax, New Delhi as per direction of the ITO, Ward-6(1), New Delhi in the case of M/s Macro Nirman (P) Ltd. visited the following parties at the addres .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l Area, Ghaziabad (U.P.) Amit Steel, Bhiwadi and MI5 Dharam Steel,Dheruhere are owned by the same party M/s Amd Steel IS not presently existing now. All the above six parties exist at the addresses above. They have confirmed having sold material to M/s Macro Nirman Pvt. Ltd. Copies of ledger and visiting card of these parties are enclosed herewith this report and copy of PAN of Sh. 8ahadur Singh of M/s Thawar Steel Traders and copy of voter card issued by Election Commission in respect of Sh. Is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ram Steel. However, no documentary evidence could be filed by the assessee company to substantiate its claim. As per report of the Inspector no such firm is in existence now. Nothing has been brought on record to show that the two firms were indeed owned by the same person. In the appellate proceedings submissions were made that a bill of M/s Amit of ₹ 16,61,161/- was wrongly accounted in the books of M/s Dharam Steel. That it was a clerical error. As M/s Amit is now not in existence the c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of the matter is that purchase was made from M/s Amit Steel. Ld. AR took our attention towards Paper Book Page 25-26 which are the submissions before the Ld. CIT(A) submitting that bill of Amit Steel was wrongly entered in the account of M/s Dharam Steel and the error was so apparent which was sought to be noted by the Ld. CIT(A). According to the Ld. AR the assessee wrongly accounted for Bill No. 2 dated 3.12.2007 of M/s Amit Steels of ₹ 16,61,161/- in the account of M/s Dharam Steel. I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Assessee also submitted that M/s Dharama Steels did not account for Bill NO. 1378 dated 24.12.2007 of ₹ 2,505/- issued by them to assessee in their books of accounts however, same has duly been recorded by the appellant. Ld. Counsel of the assessee further submitted that the appellant while accounting bills of M/s Dharam Steels made clerical errors resulting the difference of ₹ 3,360/- details of which is as under:- S.No. Date Bill NO. Invoice amount Amount recorded as purchase Dif .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of M/s Amit Steels showing the purchases from M/s Amit Steels. And then PB Page 206-207 which is the submission in response to remand report submitting that the error has been accepted by the AO in the remand report. And also draw our attention towards the copy of the Inspector Report (Supra), wherein in para 4, AO himself has reproduced in his remand report that M/s Amit Steel and M/s Dharam Steel are owned by the same party. So according to the ld AR, the clerical mistake as pointed out above .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n nature. The assessee has pointed out the mistake which has arisen and on perusal of the Remand Report of the AO in which the Inspector s Report wherein the Inspector has clearly mentioned that the M/s Amit Steel and Dharam Steel belongs to one and the same person and the mistake made by the assessee accountant need not come in their way to saddle them with the liability. The explanation of the assessee has been corroborated by evidence on record, therefore, there is no justification for impugn .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

alance sheet as on 31.3.2008 the assessee has shown ₹ 15,64,994/- as service tax payable and ₹ 3,04,284/- as sales tax payable. When it was asked by the AO to explain, the assessee replied that the service tax was paid on 16.6.2009 and 22.6.2009 and has also submitted that we hereby surrender the amount of service tax of ₹ 11,76,203/- for addition due to deposit of the same late . According to the AO since the Assessee has not informed as to when the remaining amount was paid / .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e said contention. 24. Aggrieved by the said impugned order, the assessee is before us. 25. Ld. Counsel of the assessee submitted before us that it is pertinent to note that the assessee did not claim any deduction on account of service tax paid nor did it debit the amount as an expenditure in the profit and loss account. Since the assessee did not debit the amount in the profit and loss account as an expenditure nor did the assessee claimed any deduction in respect of the amount which is sine q .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s the provision for deduction of expense specified under the section only on actual payment therefore claiming of deduction of particular expense is prerequisite condition for invoking provision of section 43B of the Act. Since the assessee has not claimed any deduction on account of service tax therefore, the disallowance u/s. 43B is erroneous and is liable to be deleted. The Assessee in support of contention raised in relying upon the judgment of the Hon ble Delhi High Court in the matter of C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecided by the Hon ble Jurisdictional High Court in the case CIT vs. Noble & Hewitt (I) P. Ltd. (2008) 305 ITR 324 (Delhi) (Supra) has held in our opinion, since the assessee did not debit the amount to the P&L account as an expenditure nor did the assessee claimed any deduction in respect of the amount and considering that the assessee is following the mercantile system of accounting the question of disallowance of deduction not claimed could not arise. The aforesaid case is similar to t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

TDS has been deducted while making payments shuttering / hire charges. So the entire amount was disallowed by the AO u/s. 40(a)(ia) of the Act. 31. Aggrieved by the said order, the assessee preferred an Appeal before the Ld. CIT(A) and before him Ld. AR contended that the assessee paid shuttering/hire charges of ₹ 18,03,690/ out of which ₹ 69,320/- were paid to three different parties for whom no tax was liable to be deducted. The Ld. CIT(A) did not agree to the said contention of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version