COMMISSIONER OF INCOME-TAX Vs. ARM ENGINEERS

JUDGEMENT

(1.) THIS is an appeal by the Revenue, being aggrieved by the order passed by the Commissioner of Income -tax (Appeals) and the Income -tax Appellate Tribunal, Panaji Bench, Goa, and it raises the following substantial question of law for our decision and it recites the following substantial question of law for our decision :

(2.) THE assessee had filed return of income on December 31, 1996, and the same was processed under Section 143(1)(a) of the Income -tax Act, 1961, on January 7, 1997. On January 9, 1997, the assessee had filed a revised return of income declaring total income of Rs. 2,98,580 as against the earlier declared income of Rs. 5,28,720. The revised return of process was filed under Section 143(1B) on February 13, 1997. The assessment was completed on March 27, 1998, determining the income of Rs. 2,98,580 . During the course of the assessment proceedings for the accounting year 1998 -99 the Assessing Officer noticed that there was a short account of contract receipts to the extent of Rs. 94,35,804 and he presumed that income chargeable to tax had escaped within the meaning of Section 147 of the Act. Consequently the assessment was reopened by issuing notice under Section 148 of the Act.

(3.) THE Revenue does not agree with the view taken by both the appellate authorities below, mainly on the ground that the contractee in the case of Brij Bhushan Lal Parduman Kumar : [1978]115ITR524(SC) was a Government establishment/Department, whereas in the case at hand, the contractee was a sugar factory by name Shivajirao Patil Nilangekar Sahakari Sakhar Karkhana Ltd. The Assessing Officer also referred to the contract and also to the letter of confirmation submitted by the contractee regarding the differential amount having been spent on purchase of construction material which was purportedly handed over to the assessee and utilised in the project under review. The Assessing Officer had taken into consideration that for the balance amount of Rs. 1,02,000 the debit notes were available and for the balance amount of Rs. 70,82,000 they could not be made available. He therefore rejected the contentions of the assessee and treated the said differential amount as income liable to tax.