TaxTMI 
TaxTMI 
2025 (1) TMI 1855
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....d prejudicial to the interest of revenue. 2. He has erred in law and facts in invoking provision of section 263 against the scrutiny order passed by the A.O. after examining in detail the issue of receipt of Rs. 3.70 Crore not shown as income for A.Y. 2018-19 as it did not accrue being provisional book entry duly disclosed in the return of income filed and audited accounts. 3. He has erred in law and facts in not appreciating the facts that while passing scrutiny assessment order the learned A.O. has examined the taxability of this issue and after considering the explanation of assessee supported by documents accepted the non booking of the said receipts as income. 4. He has erred in law and facts in not appreciating the facts that the said amount has already been shown as income in assessment year 2019-2020 which has been duly assessed and the income tax rates been same no loss has occurred to revenue and it is revenue neutral. 5. The learned PCIT has erred in law and facts in not properly appreciating the submission of the assessee objecting to the initiation of proceedings U/s 263 for Α.Υ. 2018-19. 6. The legal decisions....
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....r dated 17/02/2021 was set aside by his order passed on 29/03/2023. That the issue of not considering amount of Rs. 3.70 Crore as revenue for A.Υ. 2018-19 which was offered for taxation in A.Y. 2019-20 as the impugned receipts did not accrue in A.Y. 2018-19. That the company was under bonafide belief that the issue being adequately explained and accepted during original assessment proceedings will be accepted by the A.O. while passing order r.w.s. 263 but the explanation has not been accepted by the A.O. who has passed the order on 29/02/2024 making addition of 3.70 Crores. That the order passed U/s 263 being against the accepted principles of accountancy and the delay in filling appeal being for valid reasons and balance of convenience being in favor of assessee by executing this affidavit the unintended delay of more than 300 days is prayed to be condoned. The above facts are solemnly affirmed, on oath and are true to the best of my knowledge and belief. Place: Ahmedabad. Date: 06/04/2024 FOR, BALARAM CONSTRUCTION LIMITED (Seal) Sd/- DINESH GADHVI (Deponent) DIRECTOR ....
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....he appeal or not. Copy of the order was filed before us. He pointed out that in the facts of the case before the Hon'ble High Court also the assessee had consciously abandoned its right of raising a cross objection initially and had exercised it at a later stage with considerable delay and in the light of these facts, the Hon'ble High Court had held that in such circumstances where a cause is consciously abandoned the party seeking condonation must show by cogent evidence sufficient cause in support of its claim for condonation. That, the onus on the party seeking condonation is greater. The Hon'ble High Court, it was pointed out, went on to state that one of the propositions of settled legal position is to ensure that a meritorious case is not thrown out on the ground of limitation. Therefore, it is necessary to examine atleast, prima facie, whether the assessee has or has not a case on merits. In this regard, our attention was drawn to paragraph No.12 of the order of the Hon'ble High Court in the case of Vareli Textile Industries vs. CIT, (supra) which reads as under: "12. However, what is more material is whether the Tribunal was justified in refusing to condone the del....
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....d to have assumed jurisdiction to revise the order of the AO u/s 263 of the Act. In this regard, he drew our attention to the notice issued by the Ld.PCIT u/s. 263 of the Act, is as under: "To BALARAM CONSTRUCTION LIMITED, 311 SHREYAS. COMPLEX, OPP, JAIN DERASAR India, NAVARANGPURA AHEMDABAD 380009, Gujarat, India, PAN: AAACB6264C, Assessment Year: 2018-19 Dated: 01/03/2023, DIN & Notice No.ITBA/COM/F/17/2022-23/1050270518(1) Sir/Madam Subject: Proceeding u/s 263 of the Income-Tax Act, 1961 - Notice Please refer to the assessment order u/s 143(3) r.ws/143(3A) & 143(38) of the Income-tax Act, 1961 for A.Y. 2018-19, passed in your case by the NoFAC, New Delhi on 17.02.2021 after accepting the returned income at Rs. 73,32,210/ 2. On verification of case-records, it is revealed that during the assessment, the department asked you to clarify reasons for including negative balance of 3.06 crore in the balance sheet under head trade receivables. In reply to this you had submitted that this include provision entry of 3.70 crore in respect of building construction work of Executive En....
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.... email-id, opening balances as on 01.04.2017, addition during the year, received during the year, closing balance as on 31.03.2018 in a tabular form." 11. Please upload the details of the contract given by you to sub-contractors along with necessary documentary evidence and TDS applicability thereon. 13. Please furnish the method of accounting adopted by you. Whether the income is offered on receipt of payment or on running bills." 4.2. He also drew our attention, in this regard, to page Nos.63 to 68 of the paper-book placed before us and more particularly to page No.65, wherein he pointed out that it was explained to the AO that the negative balance reflected advance received from the trade debtors. The actual work having not been carried out as under: "Point-(6): On verification of Balance sheet, under the head other current Assets, trade receivables of Rs. 3.06 cores is showing negative Please explain as to how the receivables are negative and also furnish the list of the trade receivables along with Name, Address, PAN and e-mail id, opening Balances as on 01.04.2017, addition during the year, received during the year, closing balance as on 31.03.20....
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....t, which meant that the assessee had completed work to this extent of Rs. 3.70 crores. He therefore found the explanation of the assessee of Rs. 3.70 crores representing the amount paid by EEAUT to the assessee since their grant was getting lapsed and no work actually being done on account of the same, as not in order. The contents of para 2.1 of the order are as under: "2.1. It is further gathered from the ledger account, regarding the said transaction that the EEAUT had passed a bill raised by the assessee company during December 2017, out of which an amount of Rs. 4.70 Crores was withheld by the EEAUT. Thereafter, an amount of Rs. 1.00 crore was released in January 2018 while Rs. 3.70 Crores was withheld by the EEAUT: From the transaction, it is very clear that the EEAUT could not have passed a bill without the same being raised (RA bill certifying that they had completed the work). Thus, the submission that a provision was made in the books of the assessee company, in order to facilitate lapse of budgetary grants of EEAUT does not appear to be in order." When these facts were pointed out to the Ld. Counsel for the assessee he failed to point out any infirmity in thi....
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....ccount. 4.9. The Ld.Counsel for the assessee was also confronted at bar that the TDS credit on Rs. 3.70 Crs reflected to have been taken by the assessee in the ROI of the succeeding year, did not establish the fact of income of Rs. 3.70 Crs being returned to tax. That it only reflected credit of TDS being taken on the same. 4.10. Ld.Counsel was unable to controvert the same with any cogent explanation. 5. Having patiently heard the Ld.Counsel for the assessee, we do not find any merit in the contention of the Ld.Counsel for the assessee that it had an obvious and patent case on merits in its favour and, therefore, the delay in filing the present appeal against the order of the Ld.PCIT passed u/s. 263 of the Act needed to be condoned. 5.1. As noted above, the case of the Ld.Counsel for the assessee was that the issue on non-examination by the AO of Credit balance of trade receivable of Rs. 3.70 crores, raised by the Ld.PCIT in the order passed u/s. 263 of the Act, was clearly demonstrated to have been examined by the AO and rightly accepted as pertaining to the advances received by the assessee. His case also was that, even otherwise it was demonstrated to the Ld.PCIT th....
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....the contention of the Ld.Counsel for the assessee that it was demonstrated to the Ld.PCIT that the amount of Rs. 3.70crores had been returned as income in the subsequent year, we find no merit in the same. Our attention was drawn to the ledger account of income of the assessee in the subsequent year. The ledger account income records a total income of Rs. 31 Crs earned by the assessee in the subsequent year. There is no entry pertaining particularly to Rs. 3.70 crores (relating to AUT) to clearly demonstrate that the assessee had reflected that amount of income in the impugned subsequent assessment year. Ld.Counsel counsel for the assessee was unable to point out the relevant entry in the ledger pertaining to Rs. 3.70 Crs. Therefore the ledger account of income of AUT in the subsequent year not patently reflecting Rs. 3.70 crores being included in its income, it is difficult to agree with the Ld.Counsel for the assessee that it was demonstrated to the Ld.PCIT that the impugned amount was returned to tax in the succeeding year. 5.6. As for the credit of TDS shown to have been claimed by the assessee from the said income in the return of income filed in the subsequent year, the sa....