$ * IN HIGH COURT OF DELHI AT NEW DELHI 17. + ITA 861/2015 PR. COMMISSIONER OF INCOME TAX-6 ..... Appellant Through: Mr. Rahul Chaudhary, Senior Standing counsel. versus MACRO NIRMAN PVT. LTD. ..... Respondent CORAM: JUSTICE S. MURALIDHAR JUSTICE VIBHU BAKHRU ORDER % 17.11.2015 1. This appeal by Revenue under Section 260A of Income Tax Act, 1961 ( Act ) is against order dated 27th April 2015 passed by Income Tax Appellate Tribunal ( ITAT ) in ITA No. 2105/Del/2013 pertaining to Assessment Year 2008-09. 2. main ground urged by Revenue in relation to impugned order of ITAT is that ITAT erred in deleting following additions ordered by Assessing Officer ( AO ): (a) Rs.1,09,92,260 on account of difference in contract receipts shown by Assessee and accounted for by its customer Uniproducts India Ltd. ( UIL ). ITA No. 861 of 2015 Page 1 of 5 (b) Rs.16,67,026 on account of purchase made from M/s. Amit Steel on ground that said party is not traceable. (c) Disallowance of service tax amounting to Rs.15,64,994 under Section 43B of Act. 3. As regards first addition which has been directed to be deleted by ITAT, it appears that UIL had debited its Profit and Loss Account with sum of Rs.3,73,39,842 on basis of bills raised by Assessee whereas Assessee had disclosed in its P&L account receipts of only Rs.2,63,47,582 from UIL. explanation offered before AO was that some of bills were accounted for in following Financial Year ( FY ) i.e. 2008-09 as those bills were not approved due to some pending defect liability period work. It was claimed by Assessee that it had not received full and final payment of bills raised on UIL in FY 2007-08. It received payment in following FY and very much accounted those bills in FY 2008-09 for which we are enclosing our ledger account statement for your kind consideration. 4. AO, however, noted that supporting documents had not been produced by Assessee and, therefore, rejected above explanation. 5. In course of appellate proceedings before Commissioner of Income Tax (Appeals) [ CIT (A)], Assessee produced additional evidence under Rule 46A of Income Tax Rules, 1962 ( Rules ). Assessee also explained that it was following percentage completion method as prescribed in Accounting Standard 7 (AS 7). CIT (A) called ITA No. 861 of 2015 Page 2 of 5 for remand report from AO. AO objected stating that Assessee was maintaining its books of accounts on mercantile system and therefore, its explanation regarding adoption of percentage completion method could not be accepted. Moreover, such plea was raised for first time before CIT (A). AO in remand report stated: it is not denied that bills of difference value of Rs.1,09,92,260 has not been accounted for in books of accounts. It is in fact clear that bill of Rs.1,08,92,867 has been accounted for by Assessee company on 2 nd May 2008 whereas date on bill (copy enclosed by it) is 24 th March 2008. There is no reference of such bill in Profit & Loss Account or any part of balance sheet for year ending on 31st March 2008. 6. CIT (A) concurred with AO that P & L account submitted by Assessee along with return of income did not reflect system of accounting as AS-7. addition was accordingly maintained. 7. ITAT, however, accepted that Assessee was in business of building construction, and had in fact followed AS-7 while finalising its accounts as per mercantile system. ITAT took note of working submitted by Assessee which indicated that revenue earned from UIL has been shown in accounts as per percentage completion method. 8. In response to query by Court on whether stand of Revenue was that differential sum had not been offered for tax by Assessee even in subsequent FY 2008-09, learned counsel for Revenue stated that stand of Revenue was only that in P&L Account for AY in question i.e. 2007-08 entire amount was not offered to tax. ITA No. 861 of 2015 Page 3 of 5 9. With ITAT having returned definite finding about Assessee following percentage completion method and with Revenue not contending that differential amount was not offered to tax in subsequent FY, Court is not persuaded to hold that impugned order of ITAT suffers any perversity or gives rise to any substantial question of law. 10. As far as next issue concerning purchase from M/s. Amit Steel is concerned, ITAT has accepted explanation offered by Assessee that purchase was in fact made from M/s. Amit Steel but was wrongly shown as having been made from M/s. Dharm Steel. This was perhaps on account of fact that both proprietary concerns had same proprietor. It appears that Assessee also was able to produce delivery challan for purchases made from M/s. Amit Steel and this was accepted by ITAT. This finding of ITAT having purely turned on facts, Court is not persuaded to frame any question. 11. As regards disallowance of service tax, ITAT has noted that service tax payable was not in fact shown as deduction in P&L account. Although statement was made before AO that service tax was paid late, fact remains that for AY in question Assessee had not claimed it as deduction in P&L Account. Consequently, question of complying with Section 43B for AY in question did not arise. 12. For aforementioned reasons, this Court is not persuaded to frame any of questions of law as urged by Revenue. ITA No. 861 of 2015 Page 4 of 5 13. Accordingly, appeal is dismissed. S. MURALIDHAR, J VIBHU BAKHRU, J NOVEMBER 17, 2015/dn ITA No. 861 of 2015 Page 5 of 5 PR. COMMISSIONER OF INCOME TAX-6 v. MACRO NIRMAN PVT. LTD