COMMISSIONER OF INCOME TAX Vs. CHANCHANI BROTHERS CONTRACTORS PRIVATE LIMITED

JUDGEMENT

(1.) A statement of the case has been submitted by the Income-tax Appellate Tribunal, Bench "A", Patna (hereinafter referred to as "the Tribunal", under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), referring the following questions of law for the opinion of this court :

(2.) THE next amount which the Income-tax Officer added was an amount of Rs. 23,06,079. THE assessee was required by the Income-tax Officer to furnish in writing the amount of claim preferred by the assessee before the Irrigation Department for reimbursement of various expenses incurred by the assessee in this year beyond the provisions of the contract agreement but the assessee-company did not furnish these figures and the assessee in its letter dated March 29, 1973, asserted that the submission of the figures of claims pertaining to this year cannot be easily furnished and it will take time. Under such circumstances, the Income-tax Officer added the amount of Rs. 23,06,079 as he found that the assessee had furnished claims before the Irrigation Department to the extent of a sum of Rs. 1,32,21,569 as per the statements kept in the miscellaneous file of the assessment year 1969-70. Out of this amount, an amount of Rs. 9,21,483 had been considered in the assessment years 1968-69 and 1969-70, and so the balance amount of claim remained at Rs. 1,22,99,086 and this claim related to the assessment years 1970-71 to 1972-73. THE Income-tax Officer found from the figures of payment received for the work done in these years that the proportionate receipts pertaining to the assessment year 1970-71 works out to about 75 per cent. of the total receipts relating to the assessment years 1970-71 to 1972-73. In the absence of details of claims pertaining to this year, the Income-tax Officer estimated the claim pertaining to this year at the rate of 75 per cent. of Rs. 1,22,99,086. At this rate, the amount came to Rs. 92,24,315. In the preceding assessment years, the Income-tax Officer had disallowed 75 per cent. of this amount and had treated the balance of 25 per cent. as income of the year under consideration pertaining to the amount of such claims. He, therefore, calculated 25 per cent. of the amount of Rs. 92,24,315 as the income of the assessee which came to Rs. 23,06,079 and this was added back for similar reasons as in the assessment year 1969-70.

(3.) THE Department being aggrieved by the order of the Appellate Assistant Commissioner filed an appeal before the Tribunal. THE Tribunal disposed of the appeal filed by the Department by order dated October 29, 1975. As regards the relief of Rs. 84,243 allowed by the Appellate Assistant Commissioner relating to the addition of Rs. 1,64,428 made by the Income-tax Officer, it was submitted before the Tribunal by the departmental representative that the order of the Appellate Assistant Commissioner was not clear and it was not known whether the balance of the amount was still a bill receivable or not. It was also submitted that the figures mentioned by the Appellate Assistant Commissioner were not verifiable and the assessee's assertion was accepted without proper verification. On behalf of the assessee it was submitted that though the assessee had made bills yet in respect of such bills, it was the system of the assessee that he used to show only when the bill was accepted in principle by the Government or the authorities concerned. THE attention of the Tribunal was also drawn to the order of the Tribunal for earlier years where the system followed by the assessee was discussed. THE Tribunal held that the Appellate Assistant Commissioner was justified in allowing relief as the bills to that extent had not yet been accepted and, therefore, it cannot be said that the right to the assessee had accrued in respect of that amount and merely because there was a claim by the assessse, it could not result in the conclusion that the amount was due to the assessee. THE Tribunal, therefore declined to interfere with the order of the Appellate Assistant Commissioner with respect to the relief of Rs, 84,243 allowed by the Appellate Assistant Commissioner. THE Tribunal also considered the relief allowed by the Appellate Assistant Commissioner to the extent of Rs. 23,06,079. THE Tribunal found that the Appellate Assistant Commissioner had decided this ground by following his order for the earlier year where similar additions were deleted by him. It was also argued before the Tribunal that in the earlier years, the matter had come to the Tribunal and the matter was considered in detail and the Tribunal held that the addition and its basis were not justified and that the Appellate Assistant Commissioner was justisfied in deleting the addition in that year. THE Tribunal found that the facts in the present case were the same and the addition had been made on similar grounds and so the Tribunal, following its earlier order in ITA Nos. 839 and 840 of 1972-73, declined to interfere with the order of the Appellate Assistant Commissioner. This order of the Tribunal has been annexed and marked as annexure C forming part of the statement of the case.