TMI Blog2016 (2) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... s applied his mind. Therefore, the impugned assessment order cannot be leveled as erroneous and prejudicial to the interests of the revenue under the ambit of provisions of Section 263 . The assessee's case is squarely covered by the decision of Malabar Industrial Co. Ltd. vs. CIT [ 2000 (2) TMI 10 - SUPREME COURT] - Decided in favour of assessee. - I.T.A. No. 337/Ind/2015 Assessment Year: 2010-2011 - - - Dated:- 9-2-2016 - D.T. Garasia and B.C. Meena, JJ. For Appellant: Anil Kamal Garg and Arpit Gaur, CAs For Respondents: Rajeev Varshane, CIT, DR ORDER D.T. Garasia, 1. This appeal by the assessee is directed against the order of Commissioner of Income-tax-I, Indore, dated 23.03.2015 for the assessment year 2010-11. 2. The short facts of the case are as under. 3. On perusal of the case record it is revealed that the assessee had claimed TDS of ₹ 13,18,714/- from contractual receipts of ₹ 6,15,83,252/-, (Total receipt ₹ 6,31,68,825/- (-) ₹ 15,85,573/- service tax paid) as per Annexure A-201. On perusal of profit and loss account, the assessee had offered only ₹ 5,81,89, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to furnish the reconciliation of contract receipt vis-a-vis shown in 26AS. The AO vide question No. 3 had categorically required the assessee to furnish application regarding difference of contract receipt as per TDS certificate and as per profit and loss account of the assessee. In reply to the notice the assessee furnished two separate statements. Reconciliation of contract receipts shown in the books of account vis-a-vis appearing in 26AS, which is at page Nos. 42 43 of the paper book. On perusal of these statements, it is appreciated that a minimum difference is of ₹ 86,438/- and there is no discrepancy in the contract receipt as shown by the assessee firm in the books of account and appearing in 26AS. The difference was of ₹ 86,438/-. The AO has made addition on this account. The ld. Authorized Representative submitted that the AO after applying his mind has called for necessary information and detailed explanation of the assessee. The assessee furnished all the required details and documents on the subject before the AO as many as on two occasions. Therefore, it is well settled law that the AO formed a particular opinion on one issue after making detailed inquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or final bill is raised. In other words, such advance is recognized as revenue only in which the services are rendered by the assessee and due to the reason, the amount of gross receipts as per Section 26AS statement is bound to exceed the amount of revenue shown by the assessee in its books of account, in the year in which such advance amount is taken and remained unadjusted. 6. During the course of hearing of the appeal, the ld. Authorized Representative submitted before us that in respect of remaining amount, which the assessee has received as advance was accounted in the subsequent year and the assessee has produced the copy of ledger account of M/s. Sahara Prime City Limited, M/s. Rajshree Plastiwood Private Limited. Copy of ledger account of contract receipt and copy of summary of contract receipt and copy of acknowledgement of return, wherein the assessee has shown the same as his income as the assessee has executed the contract and the difference of ₹ 13,40,437/- in respect of M/s. Sahara Prime City Limited, difference of ₹ 75,000/- in respect of M/s. Rajasthan Production Private Limited. The difference of ₹ 7,83,900/- in respect of contract wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee firm consistently following the mercantile system of accounting. Under this system, any contract receipt is recognized as revenue as and when any corresponding work is executed by the assessee firm. Many a times, the principal who awards contract to the assessee firm for execution of any civil construction work, provides advances to the assessee for mobilizing its resources. As per Section 194C, the payer of any contracted sum deduct the tax at source at prescribed rate on the sum at the time when the payment is made or the credit is given to the account of the contractor, whichever event occurs first. It is the case of the assessee that in this case the assessee has received advance of ₹ 33,93,315/- from three parties - ₹ 13,40,437/- in respect of M/s. Sahara Prime City Limited, difference of ₹ 75,000/- in respect of M/s. Rajasthan Production Private Limited, the difference of ₹ 7,83,900/- in respect of contract work of M/s. Mahalay Engineering Components India Private Limited and ₹ 86,438/- is added in the assessment order. As per the assessee, this difference has been explained to the AO. The AO was satisfied and he has made a detailed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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