Case Law Details
Brief of the Case
ITAT Pune held in the case The ACIT vs. M/s. Ambarwadikar & Co., Engineers & Contractors that It is clear that the bill raised by the assessee has been accepted by the department and for whatever reason some amount was not paid during F.Y. 2001-02 but the fact remains that there is no such dispute as claimed by the assessee. No documentary evidence has been filed by the assessee during assessment proceedings or appeal proceedings or even before us to substantiate the contention that some dispute was going on between the assessee and department. Since the assessee is following mercantile system of accounting and the assessee himself has shown in the belated original return of income the figure of WIP as per the bills raised by it on the Government department and also the assessee has not incurred any further expenditure on such amount received in subsequent year, therefore, the order of the CIT (A) reducing the WIP from Rs.4.94 crores to Rs.3 crores for A.Y. 2001-02 in our opinion cannot be accepted. Merely because assessee has offered the same to tax in A.Y. 2004-05 cannot be a ground to reduce the correct WIP from Rs.4.94 crores to Rs.3 crores. We accordingly set aside the order of the CIT (A) and the grounds raised by the revenue are allowed.
Facts of the Case
The assessee is a partnership firm engaged in the business of Civil Construction. It filed its return of income on 20-02-2002 u/s.139(4) declaring total income of Rs. 94,56,820/- which was duly processed u/s. 143(1), on 15-06-2002 determining the tax payable by the assessee at Rs.22,28,630/-. The assessee filed a revised return of income on 20-01-2003 declaring a loss of Rs.2,63,95,650/- which was erroneously processed u/s.143(1) on the same day determining a refund of Rs.21,77,337/-. No notice u/s.143(2) (ii) of the Act was issued on the basis of the first return filed on 20-02-2002. However, on the basis of the revised return filed on 20-01-2003 a notice u/s 143(2)(ii) was issued on 27-05-2003 which was served on the assessee on 28-05-2003. The Assessing Officer later moved a petition u/s.263 to the CIT who vide order passed u/s.263 of the Act dated 26-08-2003 held that the second return furnished on 20-01-2003 was not a valid return and cancelled the second intimation dated 20-01-2003.
Subsequently, the assessee moved a petition u/s.264 on 03-09-2003 before the CIT wherein the assessee sought revision of intimation dated 15-06-2002. It was submitted that as per the accounting policy consistently followed by the assessee, the assessee treats the work done as work-in progress and the same is measured and accounted for after reducing the gross profit as per the books on the work done. In the month of March 2001, the assessee had raised a running account bill for a sum of Rs.5,88,69,955/-. As per the practice followed in the past, the assessee reduced certain amount as percentage from this amount on account of gross profit and value of work-in-progress as on 31-03-2001 was arrived at by it at Rs.4.94 crores in respect of the Ghatprabha site.
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