Osgl Buildwell Pvt. Ltd., Delhi vs Assessee

Appellant by : Shri S.C. Garg, CA. Respondent by : Shri P. Dam Kanunjha, Sr.DR.

ORDER

PER G.D. AGRAWAL, VP :

This appeal by the assessee is directed against the order of learned CIT(A)-XVI, New Delhi dated 7th August, 2012 for the AY 2008-

09.

2. The assessee has raised the following grounds of appeal:-

"1. The ld.ACIT erred in law & on facts in making addition of Rs.4324908/- and the ld.CIT(A) erred in confirming the said addition to the income of the assessee towards difference in contractual receipts between those as per AIR data and as per books of account on the facts & in the circumstances of the case particularly when the difference was duly explained by the assessee with evidence.

2. The ld.ACIT erred in law & on facts in taking the total contractual receipts of the appellant as per the AIR data rather than as per the books of account of the appellant in the facts and circumstances of the case when the assessee had duly proved that contractual receipts shown in the books of account were according to generally accepted accounting principles and the 2 ITA-5791/Del/2012

ld.CIT(A) erred in law & on facts in confirming the action of the AO.

3. The ld.ACIT erred in law & on facts in taking adverse view of the fact that some contractees did not respond to his notices u/s 133(6) particularly when notices were sent at the request of the assessee and the ld.CIT(A) erred in law & on facts in confirming the action of the AO.

4. The ld. CIT(A) erred in law & on facts in confirming the action of the AO of rejection of books of account u/s 145(3) of the Income Tax Act in the facts and circumstances of the case.

5. The ld. CIT(A) erred on facts in observing that the appellant had agreed before the AO for inclusion of the amounts of Rs.4324908/- as its contract receipts in accordance with AIR data. The fact of the matter is that the assessee had made a conditional submission and had worked out the net effect/deviation in contract receipts at Rs.3216950/- vide submissions dated 09.11.2010. The submissions were made after explaining why the receipts were properly excluded earlier."

3. At the time of hearing before us, it is submitted by the learned counsel that the assessee derives income from execution of the contract work. For the year under consideration, the contract receipt disclosed by the assessee was `83,08,624/-. The assessee had filed the return disclosing the net loss of `45,36,133/-. That the Assessing Officer considered the loss disclosed by the assessee as income. Further, the Assessing Officer also made the addition of `45,37,596/- for the alleged variation in the contract receipt. He stated that the Assessing Officer had received the information from AIR data as per which the receipt by the assessee was understated in respect of four projects by a sum of `43,24,908/-. It is submitted by the learned counsel that the assessee is following the consistent method of recording the receipt when the bill submitted by the assessee is approved and accepted by the contractee. That the assessee has recorded all the receipts either in this year or in the next year as per 3 ITA-5791/Del/2012

the method of accounting being regularly followed by the assessee. That the Assessing Officer did not give the details to the assessee on what basis AIR data is being collected. The Assessing Officer also did not allow adequate opportunity to reconcile the difference between receipt as per A.I. R. and as per books of account. He, therefore, submitted that the addition made by the Assessing Officer should be deleted or alternatively, the matter may be set aside to the file of the Assessing Officer for providing adequate opportunity to the assessee to reconcile the difference. He further submitted that if the matter is set aside, the Assessing Officer should be further directed to exclude the income from subsequent years if he is making the addition in this year in respect of the receipt which is recorded by the assessee in the subsequent year. He also requested that the Assessing Officer may be directed to treat the returned income as loss of `45,36,133/- and not as profit.

4. Learned DR, on the other hand, relied upon the order of the Assessing Officer as well as learned CIT(A). However, he has no serious objection with regard to setting aside the matter to the file of the Assessing Officer.

5. After considering the arguments of both the sides and perusing the facts of the case, in our opinion, the matter needs re-examination at the end of the Assessing Officer. We, therefore, set aside the orders of authorities below and restore the matter to the file of the Assessing Officer. We direct the Assessing Officer to first verify whether the assessee filed the return disclosing loss or profit of `45,36,133/-. In this regard, he may verify the assessee's profit & loss account, books of account and then verify whether there was loss or profit of `45,36,133/-. Further, he will allow adequate opportunity to the assessee to reconcile the discrepancy in the receipt of the assessee. After considering the reconciliation of the assessee and all the facts of the case available with him, he will make the assessment afresh in 4 ITA-5791/Del/2012

accordance with law. However, before we part with the matter, we may mention that the Assessing Officer should ensure that neither any receipt remain to be taxed nor same receipt is taxed twice. With these observations, we set aside the matter to the file of the Assessing Officer.

6. In the result, the appeal of the assessee is deemed to be allowed for statistical purposes.

Decision pronounced in the open Court on 28th January, 2015.

Sd/- Sd/- (CHANDRA MOHAN GARG) GARG) (G.D. AGRAWAL) AGRAWAL) JUDICIAL MEMBER VICE PRESIDENT

Dated : 28.01.2015 VK.

Copy forwarded to: -

1. Appellant : M/s OSGL Buildwell Pvt.Ltd., LU-

LU-108, Second Floor, Pitampura, Delhi - 110 088.

2. Respondent : Assistant Commissioner of Income Tax, Circle-

Circle-13(1), New Delhi.

3. CIT

4. CIT(A)

5. DR, ITAT

Assistant Registrar