Shuvam Construction Pvt. Ltd, Bhubaneswar V. DCIT, Circle-1(1), Bhubaneswar, Bhubaneswar

CO 23/CTK/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9541 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-04-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 27-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K NEB
• Assessee Lawyers: B K MAHAPATRA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK . . , . . , BEFORE SHRI P.K.BANSAL , AM & SHRI D.T.GARASIA , JM ./ ITA NO. 84 / CT K /20 1 3 ( / ASSESSMENT YEAR : 20 0 5 - 0 6 ) DCIT, CIRCLE - 1(1), BHUBANESWAR VS. M/S SHUVAM CONSTRUCTION PVT. LTD., 2754/4187 , VIVEKANANDA MARG, BHUBANESWAR - 751 002 ./ ./ PAN/GIR NO. : A AICS 6812 R ( / APPELLANT ) .. ( / RESPONDENT ) AND ./ CO NO. 23 /CTK/201 3 (ARISING OUT OF ITA NO. 84 /CTK/2013) ( / ASSESSMENT YEAR :200 5 - 06 ) M/S SHUVAM CONSTRUCTION PVT. LTD., 2754/4187, VIVEKANANDA MARG, BHUBANESWAR - 751 002 VS. DCIT, CIRCLE - 1(1), BHUBANES WAR ./ ./ PAN/GIR NO. : A AICS 6812 R ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI N.K.NEB /ASSESSEE BY : SHRI B.K.MAHAPATRA / DATE OF HEARING : 2 9 TH APRIL , 201 4 / DATE OF PRONOUNCEMENT : 01/05 /2014 / O R D E R PER BENCH : TH E APPEAL AS WELL AS CROSS OBJECTION FILED HAVE BEEN FILED AGAINST THE ORDER OF THE CIT(A) DATED 23 - 11 - 2012 . 2 . THE REVENUE HAS TAKE N FOLLOWING EFFECTIVE GROUNDS OF APPEAL : - 2 ITA NO S . 84 / CTK/ 201 3 &CO N O. 23 /CTK /2013 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO FOLLOWING ACCOUNTING STANDARD AS - 7 AND ALSO PERCENTAGE COMPLETION METHOD OF COMPUTIN G INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN NOT APPRECIATING THE FACT THAT THE AS - 7 METHOD IS CLEARLY APPLICABLE AND AS PER CBDTS NOTIFICATION, AS - 7 METHOD W.E.F. 01.04.2003 AND IT IS APPLICABLE TO T HE BUILDERS ALSO. 3. THE CROSS OBJECTION FILED BY THE ASSESSEE SINCE NOT PRESSED, THEREFORE, THE SAME IS DISMISSED. 4. COMING TO THE GROUNDS TAKEN BY THE REVENUE THAT THE CIT(A) WAS NOT JUSTIFIED THAT THE AS - 7 ACCOUNTING STANDARD IS MANDATORY W.E.F. 1 - 4 - 2003 AND, THEREFORE, THE CIT(A) WAS NOT CORRECT IN ALLOWING THE RELIEF TO THE ASSESSEE. THE ASSESSEE WAS BOUND TO COMPUTE THE INCOME ON THE BASIS OF PROJECT COMPLETION METHOD. LEARNED DR EVEN THOUGH VEHEMENTLY RELIED ON THE GROUND BUT COULD NOT SATISFY U S HOW THE AS - 7 AS NOTIFIED BY THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA IS MANDATORY AND HOW IT HAS BEEN NOTIFIED BY THE CBDT. 5. WE HAVE GONE THROUGH THE PROVISION OF SECTION 145(2) . WE NOTED THAT BY NOTIFICATION NO. 9949(F) NO. 132 /7/95 - TPL , DATED. 25 - 1 - 1996 IN EXERCISE OF POWERS CONFERRED BY SECTION 145(2) , THE CENTRAL GOVERNMENT HAS NOTIFIED ONLY TWO ACCOUNTING STANDARD AS - 1, RELATING TO THE DISCLOSURE OF THE ACCOUNTING POLICY WHILE AS - 2 RELATING TO THE DISCLOSURE OF PRIOR PERIOD AND EXTRAORDINARY ITEMS AND CHARGES IN ACCOUNTING POLICY. LEARNED DR COULD NOT PRODUCE ANY NOTIFICATION WHICH MAKES ACCOUNTING STANDARD - 7 TO BE MANDATORY W.E.F. 1 - 4 - 2003. 3 ITA NO S . 84 / CTK/ 201 3 &CO N O. 23 /CTK /2013 IN VIEW OF THIS, IN OUR OPINION, THE GROUND OF APPEAL TAKEN BY THE REVENUE IS MISCONCEIVED. THE AS - 7 I S THE ONE WHICH HAS BEEN PUBLISHED BY THE INDIAN INSTITUTE OF CHARTERED ACCOUNTANT AND THE SAID ACCOUNTING STANDARD IS NOT MANDATORY U/S. 145(2) . HENCE, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A). WE THEREFORE, DISMISS THE APPEAL FILED BY THE REVENUE. 6 . IN THE RESULT, APPEAL FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON T HIS 01/05 / 201 4 . 01/05 /2014 SD/ - S D/ - ( . . ) ( D.T.GARASIA ) ( . . ) ( P.K.BANSAL ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 01/05 /2014 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / T HE CIT(A) , BHUBANESWAR 4. / CIT , BHUBANESWAR 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//