Income Tax Appellate Tribunal - Delhi
Isolux Corsan India- C & C Jv, Gurgaon vs Ito, Gurgaon on 3 February, 2020
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IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI 'C BENCH,
NEW DELHI
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No. 2901/DEL/2017
[Assessment Year: 2012-13]
Isolux Corsan India - C&C JV Vs. The Income Tax Officer
1st Floor, Splendor Trade Tower Ward 2(1)
Golf Course Extension Road Gurgaon
Sector - 65, Gurgaon
PAN: AAAAI 4647 L
[Appellant] [Respondent]
Date of Hearing : 03.02.2020
Date of Pronouncement : 03.02.2020
Assessee by : None
Revenue by : Shri S.N. Meena, Sr. DR
ORDER
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] -1, Gurgaon dated 22.02.2017 pertaining to assessment year 2012-13.
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2. The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the denial of credit of TDS.
3. Notice issued to the assessee was returned unserved. We find that the notice was issued on the address given in Appeal Memo. Since no one appeared on behalf of the assessee, we decided to proceed exparte.
4. We have heard the ld. DR at length who heavily relied upon the assessment order and the order of the ld. CIT(A).
5. Briefly stated, the facts of the case are that the assessee is a joint venture between Isolux Corsan India Engineering and Construction Pvt. Ltd. and C&C Construction Ltd. for carrying out execution of construction contracts in the field of any kind of roads, building etc.
6. During the course of scrutiny assessment proceedings, the Assessing Officer sought explanation from the assessee to the difference in the revenue recognized in the Profit and Loss Account 3 and receipts as per Form 26-AS. The assessee filed reconciliation of gross receipt as under:
Particular Amount Revenue Recognised in P & L A/c. as per As 7 262,014,771 Advance Progressive billing made 714,075,685 Mobilization advance received 847,959,184 Total 1,824,049,640 Gross receipt as per 26AS 1,824,049,640 Difference -
7. In its reply, the assessee explained that it has made progressive invoicing to the tune of Rs. 71,40,75,685/- and received mobilization advance of Rs. 84,79,59,184/- during the year under consideration, which has not been considered as income for the year under consideration according to the Percentage of Completion Method [POCM] adopted by the assessee. It was brought to the notice of the Assessing Officer that the payers have deducted and deposited the applicable TDS on these progressive invoicing and advance payment and accordingly, the assessee has claimed TDS in the year under consideration.
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8. The Assessing Officer dismissed the claim of the assessee holding that the credit of TDS is to be allowed only in the year in which receipt has been reflected by the assessee as its income in its account. Accordingly, credit of TDS of Rs. 3,12,40,697/- was denied.
9. The assessee agitated the matter before the ld. CIT(A) but without any success.
10. We have carefully perused the orders of the authorities below. The Assessing Officer has not made any adverse inference in so far as the method of accounting employed by the assessee is concerned and has accepted that the assessee is consistently following POCM for recognizing income from construction contracts as prescribed in Accounting Standard-7 issued by Institute of Chartered Accountants of India, which is mandatory accounting standard.
11. We find that in its reply, the assessee has specifically mentioned that since it is following POCM, it has offered for tax the income on which it has claimed TDS during the year, in subsequent years on the 5 basis of revenue recognized as per the consistent method of accounting followed by the assessee as per POCM.
12. We find that there is no mention of any such income offered in subsequent Assessment Years nor it has been verified by the Assessing Officer. Therefore, in the interest of justice and fair play, we restore this issue to the file of the Assessing Officer. The Assessing Officer is directed to verify whether the income has been recognized in subsequent Assessment Years and if found correct, credit of TDS should be given accordingly.
13. In the result, the appeal of the assessee in ITA No. 2901/DEL/2017 is treated as allowed for statistical purposes.
The order is pronounced in the open court on 03.02.2020.
Sd/- Sd/-
[KULDIP SINGH] [N.K. BILLAIYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 03rd February, 2020.
VL/
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Copy forwarded to:
1. Appellant
2. Respondent
3. CIT Asst. Registrar
4. CIT(A) ITAT, New Delhi
5. DR
Date of dictation
Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order