TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 35
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....r the A.Y. 2009-10 vide dated 22.12.2011 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). The penalty was levied by the DCIT, Circle 24(3) under section 271(1)(c) of the Act vide order dated 19.03.2014. 2. The first issue in this appeal of assessee in ITA No. 2811/Mum/2013 for AY 2009-10 is against the order of CIT(A) disallowing the expenses relatable to non-deduction of TDS under section 194C of the Act and treating the transaction of sale of goods as part of works contract and thereby invoking the provisions of section 40(a)(ia) of the Act. For this assessee has raised the following ground No. 1 and 2: - "1. On the facts and the circumstances of the case & in aw the learned A.0 has erred in treating the transa....
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....e thereon on the said income arising out of the receipts of the contract and filed form No. 26A along with Annexure as provided in Rule 31ACB of the Income Tax Rules, 1962 in respect of sale of equipments. It was contended by the learned Counsel for the assessee that in view of insertion of second proviso to section 40(a)(ia) of the Act by the Finance Act, 2011, which is curative by nature, the assessee's claim of contract payment of Rs. 44,91,845/- is not be disallowed. The learned Counsel for the assessee stated that this issue has been decided by Hon'ble Delhi High Court in the case of CIT vs. Ansal Landmark Township Pvt. Ltd. 279 CTR 384 (Delhi), wherein the second proviso to section 40(a)(ia) of the Act is held to be declaratory and cu....
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....rred in resorting to revaluation of closing WIP on 31.3.2009 and rejecting the method of valuation of the closing stock i.e. closing WIP, regularly followed by the appellant from-year to year. 3(b) On the facts and in the circumstances of the case ad in law the learned A.O. has erred in adding Rs. 3781174 to the income of the appellant on account of alleged undervaluation of closing WIP 31.03.2009 and, the learned CIT(A) has' erred in confirming the said addition. 3(c) "Without prejudice to Ground of Appeal No. 3(a) & 3(b) and on the facts and in the circumstances of the case ad in law the learned A.O. has erred in calculating the addition at Rs. 3781174/- being addition @ 7% on WIP valued at cost of Rs. 43964726/- which correctly w....
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....receipts relating to which is either credited to the profit and loss account or it is lying in closing work in progress. The AO also noted that the assessee has worked out gross profit of Rs. 1,66,13,752/- on sales plus closing work in progress. He noted that the assessee after reducing the gross profit of Rs. 39,77,307 on closing work in progress, gross profit on the sale was declared at Rs. 7,42,51,835/- and reported during the year, which worked out at Rs. 1,26,36,445/-. The AO noted that the gross profit rate on the sales reported by the assessee is 17.02% as against the gross profit rate of 8.30 percent included by the assessee while working out closing work in progress. Accordingly, the AO noted that the gross profit already mentioned....
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....with the Authorized Representative that because final bill raised was not approved a portion of the receipts were taken to the WIP. Hence the Assessing Officer is justified in adding 15% gross profit to the WIP and to this extent the appellant had tried to suppress the valuation of the closing WIP. The action of the Assessing Officer is upheld. 4.4. It is the contention of the appellant that the closing WIP has been arrived at as per the AS 7. As mentioned already, the proprietary concern of the appellant M/s VAV Air conditioners is engaged in the business of procuring contract for installation and commissioner of Air Conditioner and ventilation system. As 7 is applicable only to construction contract and hence the same is not applicable ....
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...., we noted that the assessee is following the method of accounting consistently and it is followed consistently year after year by ascertaining and accumulating the direct cost such as material cost, labour and other identifiable expenses directly relating to a particular ongoing job as on the last day of the accounting year. We also noted that the work in progress followed at cost + net profit so as to bring the contract revenue for the period lying with the requirement of accounting standard AS 7 as prescribed by ICAI and adopted by assessee as per section 145 of the Act. In such circumstances, we are of the view that the AO and CIT(A) has wrongly made adhoc addition, which we delete. This issue of assessee's appeal is allowed in term of ....