9911796707
TMI Blog2024 (7) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... ical working of the Assessing Officer in as much as the total sales tax including the service tax on the entire sales made cannot be adopted for working out the calculation The value of closing stock can be enhanced only by the amount of sales tax pertaining to the closing stock on a pro-rata-basis. The closing stock of the appellant stands at Rs. 1,66,80,664/-. The sales tax on purchases was only Rs. 65,41,478/-. Material consumed during the year amounts to Rs. 16,57,76,188/-. Sales tax on the material consumed come to 3.94%. The value of closing stock therefore is required to be enhanced by 3.94%. The amount of addition thus works out to Rs. 6,56,280/-. Addition of additional Sales Tax pertaining to earlier years - contention of the assessee is that this amount has to be allowed as deduction u/s 43B of the Act has some force - HELD THAT:- We direct the AO to consider for allowing deduction u/s 43B the additional Sales Tax pertained to earlier years on payment basis. This ground of assessee is allowed for statistical purpose. - SHRI G.S. PANNU, HON BLE VICE PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER For the Appellant : Dr. Rakesh Gupta, Adv. And Shri Deepesh Garg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of value of work in progress as sales and, therefore, there cannot be any estimation of GP on the unbilled work in progress. Not convinced with the submission of the assessee the Assessing Officer treated 75% of work in progress as sales of the assessee and estimated the gross profit from out of such estimated sales at 18.54% and added Rs. 2,62,75,248/- as income of the assessee. 4. On appeal, the Ld.CIT(A) deleted the addition made by the AO. 5. Before us the Ld. DR strongly placing reliance on the order of the AO submitted that the AO has rightly treated 75% of work in progress as sales as the assessee did not declare any profit for the assessment year under consideration. Ld. Counsel placed reliance on the order of the Ld.CIT(Appeals). 6. Heard rival contentions, perused the orders of the authorities below. 7. According to the Assessing Officer the assessee should have shown profit from the business and since the assessee has shown work in progress without showing any sales he estimated 75% of work in progress as sales of the assessee and profit was estimated at 18.54%. The Ld.CIT(A) considering the submissions of the assessee and averments of the AO in the assessment order and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C D 11,550,000 11,382,342 4,201,801 7. M3M India Limited, Gurgaon, Haryana 8,500,000 17,172,396 RUNNING WORKS 8. HCL Technologies Ltd., Manesar, Haryana (31/10/10)- Rs. 14,34,57,552/-, Revised- (21/02/11)- Rs. 13,37,28,058/- 36,700,000 65,798,361 29,887,158 9. MGF Development Ltd. The vilas Gurgaon Haryana 11,800,000 6,529,867 28,237,768 10. MAX Healthcare Limited, Shalimar Bagh 11,900,000 21,915,526 16,479,931 11. Global Health Pvt. Ltd. 14,700,000 18,395,059 18,498,553 12. PVR Limited, Ambience Mall, Vasant Kunj, N.D. 19,750,000 24,181,810 24,102,759 Grand Total 186,400,000 225,192,440 126,815,427 SUMMARY A. VALUEOF WIP BROUGHT FORWARD FROM EARLIER YEAR TERMINATED WORKS 52,700,000 B. VALUE OF WIP BROUGHT FORWARD FROM EARLIER YEAR SUSPENDED WORKS 38,850,000 C. VALUEOF WIP RUNNING WORKS 94,850,000 TOTAL A+B+C 186,400,000 4.6 While furnishing this information the counsel of the appellant has submitted that a sum of Rs. 5.72 crores is work-in-progress in respect of 3 works which were terminated. The appellant has submitted as under:- Out of twelve parties, for three parties, no work was carried out due to disputes in earlier years (value of brought forward WIP of earlier years-5.27 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounted to loss incurred by the appellant. The appellant still retains the claim in respect of the outstanding balance. 4.6.4 From the ledger of M/s Dalmia Cement (Bharat) Ltd., I have noted that from 01.04.08 till 31.03.11 the appellant has raised the bills and received payments during different years as under:- Dalmia Cement Bharat Ltd. F.Y. Work Done Amount Received Closing Balance 2008-09 7,29,36,416 6,91,05,950 38,30,466 2009-10 46,96,570 2,63,68,973 -1,81,41,937 2010-11 3,12,03,580 1,11,35,851 19,25,792 4.6.4.1 During the F.Y. 2010-11, Appellant debited Rs. 30 lakhs towards bank charges, and Rs. 14,47,145/- towards retention money in the ledger of the party. The amount of work in progress carried over was finally written off in A.Y. 13-14. 4.6.5 Based on above observations, I find that the work- in-progress shown above could not be billed by the appellant due to reasons beyond its own control and therefore the Assessing Officer s treatment of the same at sale cannot be justified. I am unable to sustain the addition made by the Assessing Officer in respect of these three parties. 4.6.5.1 In respect of the work-in-progress related to the remaining nine parties amounting to 13.37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not filed. The A.O. has further recorded that the assessee was asked to furnish the details of such sales tax (related to year-wise purchases from unauthorized parties) but the same was not furnished. 5.3.1 On the contrary, the counsel of the appellant has asserted that these details were filed before the Assessing Officer. 5.3.2 In view of the contradictory assertions as narrated above, the Assessment Records have been called for and examined by me. My findings in this regard Recorded in subsequent paragraphs. 5.3.3 I have noted that vide letter dated 17.12.13 the appellant had submitted the details before the Assessing Officer. The A.O. has recorded in the order sheet as under:- Shri Y.S Bhartnagar, CA attended and filed details vide letter dated 17.12.13. Produced labour expenses bills bills for closing rotation to file balance details. On 27.12.13 at 11:00 AM 5 3.4 I have considered the reasoning of the Assessing Officer and the submissions of the appellant. I appreciate the observations and consequent notice given by the Assessing Officer asking the appellant to show cause why the sales tax pertaining to earlier years should not be disallowed and appellant s closing stocks s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of the Ld. Counsel for the assessee is that out of Rs. 17,63,289/- sustained by the Ld.CIT(A) an amount of Rs. 11,07,071/- represents additional Sales Tax pertaining to earlier years. This amount is to be allowed as deduction u/s 43B on payment basis. 14. On hearing both the sides and perusing the order of the Ld.CIT(A), we observe that the Ld.CIT(A) restricted the addition towards Sales Tax and Service Tax observing as under: 5.3 I have noted that the Assessing Officer has recorded that during the assessment proceedings the AR was asked to reconcile sales tax and sales and purchases but the same was not furnished. The A.O. has further recorded that the assessee was required to file sales tax input account of purchases and sales tax output account of sales and the proof of payment of the amount of difference. This reconciliation was not filed. The ledger of input of purchases and output of sales was also not filed. The A.O. has further recorded that the assessee was asked to furnish the details of such sales tax (related to year-wise purchases from unauthorized parties) but the same was not furnished. 5.3.1 On the contrary, the counsel of the appellant has asserted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
