Income Tax Appellate Tribunal - Chandigarh
Haryana State Roads And Bridges ... vs Acit, Panchkula on 25 November, 2019
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, "ए " च डीगढ़
I N T H E I NC OM E T A X A P PEL L A TE T RI B U N AL
D I VI SI O N B E NC H, ' A ' C H A N D I G A RH
ी संजय गग , या यक सद य एवं ीमती अ नपण ू ा ग&ु ता, लेखा सद य
B E F OR E S HR I S A N J A Y GA R G, J U D I C I A L M E MB E R A N D
M s . A N N A P U R N A G U P T A , A C CO U N T A N T M E MB E R
आयकर अपील सं./ ITA Nos. 1155 & 1156/ C H D / 2 0 1 4
नधा रण वष / Assessment Years : 2008-09 & 2011-12
Haryana State Roads and Bridges बनाम The DCIT, Circle,
Development Corporation Limited, Panchkula
Bay No. 13-14, Sector 2, Panchkula
थायी लेखा सं./PAN NO: AAACH9435M
अपीलाथ /Appellant यथ /Respondent
नधा रती क ओर से/Assessee by : Shri Harry Rikhy, Advocate
राज व क ओर से/ Revenue by : Shri Chandrajit Singh, CIT DR
सन
ु वाई क तार%ख/Date of Hearing : 25.11. 2019
उदघोषणा क तार%ख/Date of Pronouncement : 25.11.2019
आदे श/Order
Per Sanjay Garg, Judicial Member:
The present appeals have been preferred by the assessee for different assessment years against the separate orders dated 22.10.2014 & 14.11.2014 respectively of the Commissioner of Income Tax (Appeals), Panchkula [hereinafter referred to as 'CIT(A)'].
2. Both the appeals pertaining to the same assessee, having identical issues, were heard together and are being disposed of by this common order.
ITA Nos. 1155 & 1156/Chd/2014- Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 2
3. First we shall deal with the appeal of the assessee for assessment year 2008-09 in ITA No. 1155/Chd/2019, wherein, following grounds have been taken by the assessee. :-
ITA No. 1155/Chd/2019
1. That the order of the Ld. Commissioner of Income Tax (Appeals), Panchkula is defective both in law and facts of the case.
2. That no reasonable & proper opportunity has been granted by the Ld. Assessing Officer to appellant to represent its case during assessment proceedings and remand report proceedings, thereby violating the provisions of Equity and Natural Justice.
3. That the Ld. Commissioner of Income Tax (Appeals) Panchkula is not justified in upholding the order of Ld. Assessing Officer which has been framed u/s 143(3) of the I.T. Act, 1961 on the basis of the Original Income Tax Return filed and ignoring the Revised Return/Computation of income duly Audited by Statutory Auditor according to regular books maintained. This is uncalled for and against the provisions of Law.
4. That the Ld. Commissioner of Income Tax (Appeals) Panchkula is not justified in upholding the following additions made by the Ld. Assessing Officer:
(i) Rs.38,53,293/- on account of difference in gross receipts.
(ii) Rs.64,10,647/- on account of excess claim of expenses.
(iii) Rs.61,117/- on account of excess claim of Depreciation.
(iv) Rs.3,97,935/- on account of excess claim of travelling expenses.
(v) Rs.7,59,612/- on account of excess claim of advertisement expenses.
(vi) Rs.37,349/- on account of excess claim of staff welfare expenses.
The above said additions have been made on account of difference between the Original Return of Income and the Profit & Loss Account/Computation of income duly audited by Statutory AuditorS. HOwever, the Ld. Assessing Officer has ignored ITA Nos. 1155 & 1156/Chd/2014- Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 3 the figures as shown in the statutory Audited balance sheet and the difference is due to the reason that while finally auditing the accounts the auditors changed the heads as compared to un- audited accounts which are supported with reconciliation statements. These additions are uncalled for as the Ld Assessing Officer has adopted the pick and choose method out of his own whims and fancies without pointing out any specific defects in the said expenses which are totally genuine.
5. That the Ld. Commissioner of Income Tax (Appeals) Panchkula is not justified in upholding the disallowance of Rs.96,91,000/- made by the Ld. Assessing Officer on account of Guarantee Fees paid by treating it as capital expenditure as the said expenditure is purely Revenue in nature and correctly claimed in its P&L account and has been incurred in the interest of business.
6. That the Ld. Commissioner of Income Tax (Appeals) Panchkula is not justified in upholding the disallowance of Rs.4,80,851/- made by Ld. Assessing Officer u/s 40(a)(ia) of I.T. Act, 1961. This addition is uncalled for and deserves to be deleted.
7. That the Ld. Commissioner of Income Tax (Appeals) Panchkula is not justified in upholding the order of the Ld. Assessing Officer in which he has taken the net loss of Rs. 9,84,53,811/- instead of loss of Rs.38,52,12,694/- as shown in the computation of income filed on 29-09-08 while computing the net loss as per income tax return in the assessment order.
That any other ground which may be taken with the permission of the Hon'ble Tribunal at the time of hearing.
4. Ground No.5: So far as ground No.5 is concerned, both the Ld. representatives of the parties have submitted that the issue raised vide ground No.5 relating to disallowance of Rs. 96,91,000/- made by the Assessing Officer on account of Guarantee Fee treated as capital expenditure, has been settled by the Hon'ble High court in favour of the ITA Nos. 1155 & 1156/Chd/2014- Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 4 assessee in the own case of the assessee of assessment year 2010-11 vide order dated 29.9.2016 passed in ITA No. 85/2016 (O&M), reported in [2016] 288 ITR 253 (P&H), whereby, the Hon'ble High Court has held that the Guarantee Fee can be allowed as deduction u/s 37 of the I.T. Act. Ground No.5 is accordingly allowed in favour of the assessee.
5. Ground No.6: As far as this ground is concerned, the Ld. Counsel for the assessee has stated at Bar that as per the instructions of his client, he does not press ground No.6 of the appeal. A note to this effect has also been appended in the grounds of appeal itself. Accordingly, this ground is dismissed as 'not pressed."
6. Ground Nos. 1 to 4 : So far as the issue raised vide ground Nos. 1 to 4 is concerned, the same pertain to various disallowances made by the Assessing Officer as detailed in ground No.4 of the of appeal. The Ld. counsel for the assessee has submitted that these disallowance have been made by the Assessing Officer on account of certain difference in figures in two audit reports submitted by the assessee i.e. one filed along with Income tax return and the other statutory audit report submitted during the assessment proceedings. The Ld. Counsel has further invited our attention to the plea raised in ground No.4, whereby, it has been explained that the statutory auditor had changed certain heads of the expenses due to which there was mismatch of figures. The Ld. Counsel in this respect has submitted that the Assessing Officer took up the figures whereby the allowances / deductions claimed by the ITA Nos. 1155 & 1156/Chd/2014- Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 5 assessee in the original return of income get reduced. However, while doing so, he did not give benefit to the assessee in respect of heads under which the deduction / allowance claimed by the assessee accordingly were increased. The Ld. counsel further submitted that, in fact, the audit report attached by the assessee with the Income tax return was a provisional report, whereas, the statutory audit report produced during the assessment proceedings was delayed due to late appointment of the statutory Auditor by the office of Chief Comptroller and Auditor General of India. The Ld. CIT(A), however, did not admit the claim of the assessee observing that the audit report was duly filed by one D.V. Chawla & Co. and, therefore, there was no question of two audit reports filed by the assessee. May it be so, in that event, Assessing Officer should have gone through the report of the said auditor D.V. Chawla & Co. and examined the correctness of the same vis-à-vis the facts of the case. There was no question of making disallowance on the basis of the second report without giving full credence to the same. Even if the credence has to be given to the second report, it was incumbent upon the lower authorities to also consider the relevant submissions of the assessee regarding the mismatch / discrepancy in the figures. It is not justified on the part of the lower authorities to say that on the first hand that no credence can be given to the second report and then to rely upon the same report to find fault in the first report on account of mismatch of figures with the second report.
ITA Nos. 1155 & 1156/Chd/2014- Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 6 In view of this, the matter is required to be factually looked into by the Assessing Officer. We, accordingly restore this issue raised vide ground Nos.1 to 4 raised by the assessee to the file of the Assessing Officer to look in the factual aspects of the case, consider the contentions raised by the assessee and decide the issue afresh. If the assessee explains the mismatch of the figures, the Assessing Officer will consider the same vis-a-vis facts of the case and accordingly decide the issue in accordance law.
7. Ground No.7 : So far as ground No. 7 is concerned, both the Ld. Representatives of the parties have submitted that this issue is also required to be restored to the file of the Assessing Officer as the Assessing Officer is required to examine the factual aspects relating to the returned loss as compared to the book loss. The plea of the Ld. counsel for the assessee has been that the Assessing Officer is required to consider the loss as per the return of income because the books are prepared as per the Companies Act, whereas, for the purpose of claiming the loss as per income Tax Act, the return of income is to be seen.
In view of this, this issue is also restored to the file of the Assessing Officer for decision afresh after examining the factual details as pointed out by the Ld. Counsel for the assessee.
The appeal of the assessee is accordingly treated as partly allowed for statistical purposes.
ITA Nos. 1155 & 1156/Chd/2014- Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 7 ITA No. 1156/Chd/2014 (A.Y.2011-12)
8. In this appeal the assessee has taken following grounds of appeal:-
1. That the order of the Ld. Commissioner of Income Tax (Appeals), Panchkula is defective both in law and facts of the case.
2. That the Ld. Commissioner of Income Tax (Appeals) Panchkula is not justified in upholding the addition of Rs.
10,62,222/- made by the Ld. Assessing Officer u/s 41(l)(a) of the I.T. Act, 1961 as it is not an income and basically the sales tax deducted from the amount of contractors which has been duly deposited after 30-9-2011 in Government Treasury. The delay in depositing was due to administrative reason and as the amount deducted as Sales Tax has already been deposited, it cannot be treated as income u/s 41(l)(a) of the I.T. Act, 1961 and is uncalled for.
3. That the Ld. Commissioner of Income Tax (Appeals) Panchkula is unjustified in not allowing the claim of deduction u/s 80IA of the I.T. Act, 1961 as the appellant duly fulfils the necessary conditions laid under the Act.
4. That any other ground which may be taken with the Hon'ble Tribunal at the time of hearing
9. Ground Nos. 1 & 4: These grounds are not pressed by the Ld. Counsel for the assessee, hence, these are dismissed as not pressed.
10. Ground No.2: The assessee vide Ground No.2 has raised the issue relating to disallowance made by the Assessing Officer u/s 41 (1)(a) of the Income Tax Act, 1961 (in short 'the Act') on account of cessation of liability.
11. The Assessing Officer observed from the account of the assessee that the assessee had deducted sales tax payment made to the contractor, however, the same was not deposited in the government ITA Nos. 1155 & 1156/Chd/2014- Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 8 treasury. He accordingly treated this amount of Rs. 10,62,222/- as income of the assessee. The Ld. CIT(A) confirmed the addition so made by the Assessing Officer.
12. The Ld. Counsel for the assessee has submitted before us that out of the total amount of Rs. 10,62,222/-, the assessee has already deposited the amount of Rs. 7,80,525/- in the Government Treasury on 6.2.2012, hence, the said amount cannot be treated as income of the assessee. That the balance amount of Rs. 2,81,697/- has already been treated as income by the assessee in its income tax return for the assessment year 2014-15. The Ld. Counsel has submitted that these were government dues, hence, there was no cessation of liability. The Ld. Counsel has, therefore, submitted that the issue may be sent to the Assessing Officer for factual examination.
13. The Ld. DR, on the other hand, has relied on the findings of the lower authorities.
14. Considering the rival contentions, we are of the view, that the issue requires factual examination at the hands of the Assessing Officer. If the assessee has already deposited the amount of sales tax deducted and further the balance is shown as its income in the subsequent year, then there is no question of making the addition on account of cessation of liability u/s 41(1)(a) of the Act. The Assessing Officer will factually ITA Nos. 1155 & 1156/Chd/2014- Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 9 examine it and if contention of the assessee is found correct, then no addition will be warranted on this issue.
15. Ground No. 3: So far as ground No. 3 is concerned, the Ld. Counsel for the assessee has stated at Bar that since the assessee is running into losses, hence, there was no question of claiming any deduction u/s 80IA of the Act. However, the Assessing Officer wrongly adopted the brought forward figure and has shown the positive income of the assessee. The Ld. counsel has submitted that the issue requires factual examination by the Assessing Officer.
Accordingly, ground No.3 is also restored to the file of the Assessing Officer to examine as to whether there is any positive income of the assessee, if found so, the Assessing Officer will consider the claim of the assessee of deduction u/s 80IA of the Act.
In view of the findings given above, this appeal of the assessee is treated as partly allowed for statistical purposes.
Order dictated and pronounced in the Open Court immediately on completion of hearing on 25.11.2019.
Sd/- Sd/-
(अ नपण
ू ा ग&ु ता / ANNAPURNA GUPTA) (संजय गग / SANJAY GARG)
लेखा सद य/ Accountant Member या यक सद य/ Judicial Member
Dated : 25.11.2019
"आर.के."
आदे श क त,ल-प अ.े-षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु/त/ CIT
4. आयकर आयु/त (अपील)/ The CIT(A) ITA Nos. 1155 & 1156/Chd/2014-
Haryana State Roads & Bridges Devp Corporation Ltd., Panchkula 10
5. -वभागीय त न2ध, आयकर अपील%य आ2धकरण, च4डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायक पंजीकार/ Assistant Registrar