Martin Builders Private Limited, Coimbatore V. DCIT, Coimbatore

CO 123/CHNY/2015

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1384 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 26-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 26-10-2015
• Court: TRIBUNAL
• Department Lawyers: JAYASHREE
• Assessee Lawyers: A V SREEKANTH
• Keywords: Condonation of delay; Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' . #$ , % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NO. 2493/MDS/2014 AND C.O.NOS.62 & 123/MDS/2015 / ASSESSMENT YEAR : 2010-11 THE DEPUTY COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-I(3), COIMBATORE. APPELLANT) V. M/S. MARTIN BUILDERS PVT. LTD., 54, METTUPALAYAM ROAD, GN MILLS POST, COIMBATORE 641 029. PAN AAFCM1331G RESPONDENT) / APPELLANT BY : SHRI A.V.SREEKANTH, JCIT / RESPONDENT BY : MS. JAYASHREE, CA ! / DATE OF HEARING : 26.11.2015 '# ! / DATE OF PRONOUNCEMENT: 26.11.2015 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THE APPEAL BY THE REVENUE AND THE CROSS OBJECTIO NS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER - - ITA 2493, CO 62 & 123/15 2 OF INCOME-TAX(APPEALS) DATED 1.7.2014 FOR THE ASSE SSMENT YEAR 2010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL : 2. THE LEARNED CIT(APPEALS) ERRED IN NOT DECIDING THE ISSUE AND REMITTING IT BACK TO THE ASSESSING OFFICE R, IN VIOLATION OF THE PROVISIONS OF SECTION 251(1)(A). 3. THE LEARNED CIT(APPEALS) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSING OFFICER HAD ALREADY DECIDED THE ISSUE ON THE BASIS OF THE VERY SAME EVIDENCES PRODUCED BEFORE THE CIT(APPEALS) AND HE CANNOT THEREFORE, REVIEW HIS DECISION. 3. THE CROSS-OBJECTIONS FILED BY THE ASSESSEE ARE I N SUPPORTIVE OF THE ORDER OF THE CIT(APPEALS). THERE IS A DELAY OF 230 DAYS AND 361 DAYS IN FILING THE CROSS-OBJECTION S, IN CO NO.62/MDS/2015 AND CO NO.123/MDS/2015, RESPECTIVELY . THERE WAS NO PETITION FOR CONDONATION OF DELAY FILED BY T HE ASSESSEE. IN OUR OPINION, THE DELAY IN FILING THE CROSS OBJEC TIONS IS NOT EXPLAINED BY THE ASSESSEE. BEING SO, THERE IS NO GO OD AND SUFFICIENT REASON TO CONDONE THE DELAY. ACCORDINGL Y, THESE CROSS - - ITA 2493, CO 62 & 123/15 3 OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. 4. COMING TO THE REVENUES APPEAL, THE FACTS ARE TH AT THE ASSESSEE IN ASSESSMENT YEAR UNDER CONSIDERATION SOL D A PROPERTY BEARING DOOR NOS.336 TO 353, DR. RAJENDRAP RASAD ROAD, COIMBATORE TO ME SMT. VILAYALAKSHMI RAJU FOR A CONSIDERATION OF ` 5,55,00,000/- AND ALSO ADMITTED THE INCOME ACCRUED OUT OF THIS TRANSACTION. HOWEVER, DURING T HE ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED A NOTE STATING THAT THE ASSESSEE SOLD THE AFORESAID IMMOVABLE PROPERTY BUT FAILED TO CLAIM THE COST OF CONSTRUCTION IN THE PROFIT AND LOSS ACCOUNT AND THE ASSESSEES NOTE IS NARRATED AS UNDER: WE WISH TO FURTHER STATE THAT THE AMOUNT PAID TO T HE CONSTRUCTION COMPANY M/S. AV PROPERTIES INDIA PRIVA TE LIMITED FOR THE CONSTRUCTION OF A BUILDING AT DOOR N.336 TO 353. DR. RAJENDRAPRASAD ROAD, COIMBATORE OF ` 2,13,75,875/- HAS BEEN TREATED AS LOANS AND ADVANCE S IN THE INCOME TAX RETURN FILED BY US. HOWEVER, THE UN FINISHED BUILDING WAS SOLD ON 6.5.2009 AND THE ABOVE COST OF CONSTRUCTION SHOULD BE HAVE BEEN CHARGED AS COST AN D DEBITED TO PROFIT AND LOSS ACCOUNT WHEREBY THE TAXA BLE PROFIT SHOULD HAVE BEEN ONLY ` 88,55,192/- AS AGAINST ` 3,02,31,067/- OFFERED BY US IN THE RETURN. THE ABO VE - - ITA 2493, CO 62 & 123/15 4 CONSTRUCTION WAS UNDERTAKEN BY US FOR OUR OWN PURPO SES ON OUR OWN LAND AND SOLD UNFINISHED CONSTRUCTION THE ASSESSEE MADE A REQUEST TO THE AO TO CONSIDER T HE COST OF CONSTRUCTION AS STATED BY IT. HOWEVER, THE AO REJE CTED THE REQUEST OF THE ASSESSEE AND COMPUTED THE INCOME WIT HOUT CONSIDERING THE ADDITIONAL EXPENDITURE CLAIMED IN T HE FORM OF STATEMENT. AGAINST THIS, THE ASSESSEE WENT IN APPE AL BEFORE THE CIT(APPEALS). 5. ON APPEAL, THE CIT(APPEALS) OBSERVED THAT IN THE RETURN FILED BY THE ASSESSEE, IT OFFERED THE TAXABLE PROFI T ON THE SALE OF BUILDING AT ` 3,02,31,067/-. FURTHER, THE CIT(APPEALS) OBSERVED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT WA S SUBMITTED THAT THE UNFINISHED BUILDING WAS SOLD ON 6.5.2009 A ND THE AMOUNT PAID TO THE CONSTRUCTION COMPANY, M/S. A.V. PROPERTIES INDIA PRIVATE LIMITED AMOUNTING TO ` 2,13,75,875/- WAS NOT TREATED AS THE COST OF CONSTRUCTION INCURRED BY THE ASSESSEE. THE CIT(APPEALS) FURTHER OBSERVED THAT ACCORDING TO THE ASSESSEE, THE ABOVE COST OF CONSTRUCTION SHOULD HAV E BEEN DEBITED TO THE P & L ACCOUNT, WHEREBY THE TAXABLE P ROFIT SHOULD HAVE BEEN ONLY ` 88,55,192/-. HOWEVER, THE AO IN HIS ORDER - - ITA 2493, CO 62 & 123/15 5 STATED THAT THE BOOKS OF ACCOUNT ARE VERIFIED AND A UDITED BY A QUALIFIED CA AND ALSO PASSED IN THE ANNUAL GENERAL MEETING AND THE SAME CANNOT BE ALTERED AT THE TIME OF SCRUTINY PROCEEDINGS. FURTHER, THE CIT(APPEALS) OBSERVED THAT THE AO FOLL OWING THE DECISION OF THE APEX COURT IN THE CASE OF M/S. GOET ZE (INDIA) LTD. V. CIT (284 ITR 323), STATED THAT THE DEDUCTION FRO M THE TOTAL INCOME COULD BE CLAIMED BY FILING A REVISED RETURN OF INCOME. AS THE ASSESSEE HAS NOT FILED THE REVISED RETURN FOR C LAIMING THE COST OF CONSTRUCTION WITHIN THE TIME ALLOWED, THE A DDITIONAL EXPENDITURE CLAIMED IN THE FORM OF STATEMENT WAS NO T CONSIDERED BY THE AO. ACCORDING TO THE CIT(APPEALS), THE ASSE SSEE FILED THE DETAILS OF AGREEMENT AND PAYMENTS MADE TO M/S. A.V.PROPERTIES INDIA PVT. LTD. THEREFORE, THE CIT (APPEALS) DIRECTED THE AO TO VERIFY THE DETAILS, REGARDING TH E AGREEMENT ENTERED INTO BY M/S. A.V. PROPERTIES INDIA PVT. LTD . WITH M/S. MARTIN BUILDERS (P) LTD. AND ALLOW THE PAYMENTS MAD E BY THE ASSESSEE, AS PER LAW. AGGRIEVED BY THIS, THE REVEN UE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE LD. AR RELIED ON THE FOLLOWING DE CISIONS OF THE - - ITA 2493, CO 62 & 123/15 6 TRIBUNAL: 1) ITO VS. C. BALASUNDARAM IN ITA NO.1156/MDS/2014( MDS) 2) DCIT V. CHADHA REEPU DAMAN IN ITA NO.1098/PN/201 0 (PUNE) 3) DCIT V. TSL DEFENCE TECHNOLOGIES P. LTD. IN ITA NO.2056/DEL/2011(DEL) 4) ACIT V. DIGITE INFOTECH PVT. LTD. IN ITA NO.1081 /PN/2012 (PUNE) 5) ITO VS. SYED S. HUSAINI IN ITA NO.2024/MUM./201 1(MUM) 6) SCIT V. SACHDEV STEEL WORKS PVT. LTD. IN ITA NO.2198/KOL/2010(KOLKATTA) 7) ADIT(E) V. TRIVENI EDUCATION SOCIETY IN ITA NO. 1587/HYD/2013 (HYD.) 8) ITO V. AMITY INTERNATIONAL SCHOOL IN ITA NO.1172/DEL/2013(DEL) ACCORDING TO THE LD. AR, AS PER SEC.251(1)(C) OF TH E ACT, THE CIT(APPEALS) COULD PASS ANY ORDER AS HE THINKS FIT AND BEING SO, HE DIRECTED THE AO TO CONSIDER THE DETAILS FILED BY THE ASSESSEE SO AS TO GRANT THE COST OF CONSTRUCTION OF THE ABOV E IMMOVABLE PROPERTY. IN OUR OPINION, THE CIT(APPEALS) HAS NO POWER U/S.251(1)(A) OF THE ACT AND IT RESTRICTS THE POWER OF THE CIT(APPEALS). HOWEVER, CONSIDERING THE PLEA OF TH E ASSESSEE - - ITA 2493, CO 62 & 123/15 7 IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE DE TAILS FILED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTIONS OF TH E ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 26 TH OF NOV., 2015 AT CHENNAI. SD/- SD/- ( $ % . & '( ) ( ) * + , ) DUVVURU RL REDDY - ./012304556037- 8 9: /JUDICIAL MEMBER ! 9:;<<5=1>01>?@AB@3 )8 /CHENNAI, C9 /DATED, THE 26 TH NOV., 2015. MPO* 9D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H- /CIT(A) 4. H /CIT 5. FIJ K /DR 6. J(L /GF.