2013 (4) TMI 368

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....dding an amount of Rs.21,61,740/- out of the amount shown as "due to Maistries", even though the assessee could not produce vouchers before the Commissioner of Income Tax (Appeals) and before the Assessing Officer and by making incorrect assumptions of facts that the Assessing Officer accepted the books of accounts as correct and complete? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding by the Assessing Officer was not justified in making the addition towards work-in-progress, when the assessee had claimed deduction for the expenditure and had not shown the corresponding receipts? 2. The assessee is a civil contractor engaged in cable laying work for BSNL. The assessment....

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....l appearing for the assessee submitted that the assessee is following mercantile system of accounting and as such, valued the work-in-progress and shown in the balance sheet. Therefore, the contention of the Revenue in this aspect is not correct. He further submitted that when the books are not rejected by the Authorities, they are not entitled to make addition based on estimation. 5. In support of the submission, learned counsel relied the decision of the Apex Court reported in (2010) 328 ITR 513 (Sargam Cinema V. Commissioner of Income Tax). He further submitted that only when the work is completed, the assessee can show the income in the books of account, especially when the assessee is following the mercantile system of accounting. It ....

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....nt order itself. It is also not disputed that the assessee has already valued the work-in-progress and shown in the balance sheet. According to the assessee, even though they paid the amount to the Maistry before receipt of the payment from BSNL, they would only show the receipt as income only when the work is completed. That is why they show it as work-in-progress. The Tribunal found that the assessee, by following the mercantile system of accounting, had duly debited these amounts to the Profit and Loss Account. The said finding, being a factual finding rendered by the Tribunal, the same cannot be interfered with by this Court as no other contra facts are placed before us. 8. Learned counsel appearing for the assessee relied on the decis....