TMI Blog2011 (10) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover for tax purpose. The contention of the learned counsel for the assessee is that the TDS made was under mistaken impression by the contractee. Therefore, only because the assessee did not offer the corresponding income, the assessing officer has not given the credit to TDS certificate filed by the assessee. The CIT(A) on appeal allowed the appeal of the assessee on the reason that the assessee s funds have been retained by the contractee in the form of tax liability and claimed to have been paid to government account even though there is no tax liability. Against this, the revenue is in appeal before us for the assessment years 2003-04 and 2004-05. 4. The learned counsel for the assessee relied on the order of the Tribunal dated 28.7.2011 in assessee s own case in ITA Nos.183, 218, 219/Hyd/2011 for the assessment years 2004-05, 2004-05 and 2008- 09 wherein the Tribunal allowed the appeal of the assessee and dismissed the appeal of the Revenue by holding as follows: 2. At the outset, we find that the common issue involved these appeals is covered by the decision of coordinate bench of the Tribunal in the case of the sister concern of the assessee, ACIT Vs. M/s Bhoorat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be. (2) Any sum referred to in sub-section (IA) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. (3) The Board may, for the pur0poses of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in subsection (1) and sub-section (2) and also the assessment year for which such credit may be given. From the Third Member decision of the Chandigarh Bench of this Tribunal it appears that section 199 was amended by Finance Act, 1987. Till June 1, 1987 the language employed by the Parliament in section 199 was different insofar as it provided giving credit to the assessee in respect of TDS for the assessments immediately following the assessment year. However, by Finance Act, 1987 the language of section 199 was substantially modi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax deducted at source is to be allowed as per any system of accounting followed by the assessee. In the present case, there is no dispute regarding cash system of accounting followed by the assessee and his income has been computed as per the above system. No addition has been made for income which the assessee was entitled to receive but did not actually receive. No credit for TDS on such nonassessable income could be claimed. Benefit for the tax deducted at source is to be allowed as per statutory provisions contained in section 199 of the Act. It has nothing to do with the system of accounting followed by the assessee. Further there is no dispute that the Revenue should have a consistent approach but the above principle of law has no application where interpretation of the statutory provisions is involved. If in a particular year a statutory provision was wrongly interpreted and applied, the Revenue can correct the error as income is required to be computed by correctly applying and enforcing law. Error cannot be perpetuated. Therefore, on correct interpretation of section 199 and for the reasons given above, I am of the view that the Assessing Officer was right in allowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bservation of the Third Member and the majority decision of the Chandigarh Bench of this Tribunal, we find no substance in the arguments of the learned counsel for the assessee. Moreover, admittedly, the assessee has not offered the corresponding income for taxation and the Assessing Officer has not made any addition also. In view of the above decision, we are unable to uphold the order of the CIT(A) and the same is set aside and the order of the Assessing Officer is restored. In the result, all the three appeals of the Revenue are allowed. 7. The above order of the Tribunal was based on the 3rd Member Decision cited supra which was not considered by this Tribunal in the assessee s own case while deciding appeals in ITA Nos.183, 218 219/Hyd/2011, as such, the above order in assessee s own case cited by the AR is per incuriam and we are inclined to follow the correct order of this Tribunal in the case of M/s Limak Soma JV cited supra wherein this issue was decided against the assessee and in favour of the Revenue. Accordingly, the ground raised by the revenue is allowed. 8. The next ground in I TA No.73/H/2011 is that the CIT(A) erred in accepting the contention of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it transferred to its profit and loss account. The moneys had arisen out of ordinary trading transactions. Although the amounts received originally were not of income nature, the amounts remained with the assessee for a long period unclaimed by the trade parties. By lapse of time, the claim of the deposit became time barred and the amount attained totally different quality. It became a definite trade surplus. The assessee itself had treated the money as its own money and taken the amount to its profit and loss account. The amounts were assessable in the hands of the assessee. 13. We have heard both the parties and perused the materials available on record. In our opinion, u/s 41(1) any deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee and subsequently during this assessment year if there is cessation of liability even by unilateral Act by assessee it should be treated as income of the assessee. 14. The learned counsel for the assessee relied on the judgement in the case of CIT Vs. Sugauli Sugar Works (P) Ltd. (SC) (236 ITR 518) for the proposition that unilateral write off cannot be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer recorded the finding that the assessee s explanation is verified and found to be satisfied and he also stated therein that in view of the assessee s explanation, no addition is considered to be added on this account. However, while making the addition, the total unaccounted expenditure is worked out as follows: i) Illegal expenses - ₹ 2,77,55,211 ii) Purchase of immovable property unaccounted - ₹ 70,00,000 Total ₹ 3,47,55,211 19. Since the assessee had already admitted ₹ 2,76,60,632 as additional income for this lapse noticed by search action, he further added ₹ 49,54,964 towards unaccounted investment in immovable property. The Assessing Officer had taken a contradictory stand in the same assessment order while making the addition. Once he recorded the fact that no addition is called for, however, he made addition. After making the addition, the Assessing Officer also initiated penalty proceedings and levied penalty u/s. 271(1)(c) of the Act for the lapse. However, there is no conclusive evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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