Devisai Constructions and Developers(Vizag) Private Limited, Visakhapatnam V. The Income Tax Officer, Ward-3(1), , Visakhapatnam

CO 58/VIZ/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5256 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 31-08-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V. SRINIVASA RAO
• Section: 69; 133A; 69A; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM (T HROUGH WEB - BASED VIDEO CONFERENCING PLATFORM) BEFORE SHRI N.K. CHOUDHRY, HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON'BLE ACCOUNTANT MEMBER I.T.A. NO. 27 / VIZ/2020 (ASST. YEAR : 2015 - 16 ) ITO, WARD - 3(1), VISAKHAPATNAM. VS. M/S. DEVISAI CONSTRUCTIONS AND DEVELOPERS (VIZAG) PVT. LTD., PLOT NO.502, D.NO. 25 - 4 - 11, KALYAN CLASSIC APARTMENTS, PEDAGANTYADA, VISAKHAPATNAM. (APPELLANT) PAN NO. AAECD 0053 H (RESPONDENT) C.O.NO. 58/VIZ/2021 (ARISING OUT OF I.T.A. NO. 27 / VIZ/2020 ) (ASST. YEAR : 2015 - 16 ) M/S. DEVISAI CONSTRUCTIONS AND DEVELOPERS (VIZAG) PVT. LTD., PLOT NO.502, D.NO. 25 - 4 - 11, KALYAN CLASSIC APARTMENTS, PEDAGANTYADA, VISAKHAPATNAM. VS. ITO, WARD - 3(1), VISAKHAPATNAM. PAN NO. AAECD 0053 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI, ADVOCATE. DEPARTMENT BY : SHRI V.SRINIVASA RAO , SR. DR DATE OF HEARING : 09 / 09 /2021 . DATE OF PRONOUNCEMENT : 23 / 0 9 /2021 . 2 ITA NO. 27 / VIZ /2021 C.O. NO.58/VIZ/2021 ( M/S. DEVISAI CONSTRUCTIONS AND DEVELOPERS (VIZAG) PVT. LTD. ) O R D E R PER BENCH THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE DEPARTMENT AND THE CROSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER DATED 10 / 02 /2020 IMPUGNED HEREIN PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 1 [FOR SHORT , LD. COMMISSIONER] , VISAKHAPATNAM U/SEC. 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') FOR THE A.Y. 20 1 5 - 1 6 . 2. THE REVENUE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE ORDER OF THE LD.CIT(A) - 1,VISAKHAPATNAM IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN HOLDING THAT PROVISIONS OF SEC.69A OF THE INCOME - TAX ACT,1961, IS NOT APPLICABLE TO THE CASE IN SPITE OF THE FACT THAT THE A SSESSEE RECEIVED CASH/ MONEY(ON - MONEY) OUTSIDE THE BOOKS OF ACCOUNT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DIRECTING THE AO TO ESTIMATE PROFIT @15% OF THE UNACCOUNTED SALE RECEIPTS OF RS. 2,49,70,000/ - WHEN PROVISIONS OF SEC.69A OF THE ACT ARE CLEARLY APPLICABLE TO THE FACTS OF THE CASE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN NOT ACCEPTING TH E FACT THAT THE PROVISIONS OF SEC.69A OF THE ACT ARE APPLICABLE TO THE ADDITION MADE ON ACCOUNT OF UNRECORDED SALE RECEIPTS - (ON - MONEY RECEIPTS) AS THE ASSESSEE IS FOUND TO BE THE OWNER OF SUCH M ONEY(ON - MONEY) AS PER THE MATERIAL IMPOUNDED DURING THE SURVE Y OF OPERATIONS. 5. THE APPELLANT CRAVES LEAVE TO ADD OR DELETE OR AMEND OR SUBSTITUTE ANY GROUND OF APPEAL BEFORE AND/OR AT THE TIME OF HEARING OF APPEAL. 3 ITA NO. 27 / VIZ /2021 C.O. NO.58/VIZ/2021 ( M/S. DEVISAI CONSTRUCTIONS AND DEVELOPERS (VIZAG) PVT. LTD. ) FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF APPEAL HEARING, IT IS PRAYED THAT PROV ISIONS OF SEC.69A OF THE ACT TO THE ADDITION MADE BY THE AO ON ACCOUNT OF UNRECORDED SALE RECEIPTS BE RESTORED. 3 . HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THOUGH , THE REVENUE DEPARTMENT HAS PREFERRED FIVE GROUNDS OF APPEA L IN TOTAL, HOWEVER, MORE OR LESS ONLY ONE ISSUE IS INVOLVED WHICH RELATES TO NON - APPLICATION OF THE PROVISIONS OF SECTION 69 A OF THE ACT AND DIRECTING THE AO TO ESTIMATE THE PROFIT @15% OF THE UNACCOUNTED SALE RECEIPTS BY THE LD. COMMISSIONER. 4 . THE AO IN THE INSTANT CASE MADE THE ADDITION OF RS. 2,49,70,000/ - U/SEC. 69 OF THE ACT ON THE GROUND TH A T ASSESSEE HAD RECEIVED ON - MONEY OVER AND ABOVE THE CONSIDERATION MENTIONED IN THE REGISTERED SALE DEEDS. 5. ON APPEAL, LD. COMMISSIONER HELD THAT THE PROVISIONS OF SECTI O N 69 A ARE NOT APPLICABLE IN ASSESSEES CASE AND THE AO HAS ERRED IN APPLY ING THE PROVISIONS OF THIS SECTION. THE CONCLUDING PART OF THE IMPUGNED ORDER IS REPRODUCED HEREIN FOR READY REFERENCE: - IT IS ONLY WHEN AN ASSESSEE IS FOUND IN ANY FINANCIAL YEAR TO BE THE OWNER OF ANY MONEY WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF MONEY, THE MONEY MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. IN THE PRESENT CASE, NO MONEY WAS FOUND AT THE TIME OF SURVEY U/SEC. 133A OF THE ACT . WHE T WAS FOUND WAS ONLY CERTAIN 4 ITA NO. 27 / VIZ /2021 C.O. NO.58/VIZ/2021 ( M/S. DEVISAI CONSTRUCTIONS AND DEVELOPERS (VIZAG) PVT. LTD. ) INFORMATION SUGGESTING THAT THE APPELLANT SOLD THE FLATS AT A HIGHER RATE THAN WHAT WAS RECORDED IN THE SALE DEED. MOREOVER, THE ASSESSING OFFICER HIMSELF GAVE A FINDING THAT THE TRANSACTION IS ONE THAT OF SALE OF FLATS. SUCH BEING THE CASE, I AM UNABLE TO COMPREHEND AS TO HOW THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 69A OF THE ACT. I AM OF THE OPINION THAT THE PROVISIONS OF SECTION 69A OF THE ACT ARE NOT APPLICABLE IN THE CASE OF THE APPELLANT AND THE ASSESSING OFFICER ERRED IN INVOKING T HE PROVISIONS OF THIS SECTION . 5.1 W E MAY ALSO OBSERVE THAT SECTION 69 A OF THE A CT MANDATES THAT WHERE THE ASSESSEE IS FOUND TO BE OWNER OF ANY MONEY........... . AND SUCH MONEY . .........IS NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY , MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE OF SOURCE OF ACQUISITION OF MONEY....... . OR EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE AO, SATISFACTORY, THE MONEY ..... . MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR . IN THE INSTANT CASE , IT IS AN ADMITTED FACT THAT NO MONEY WAS FOUND AT THE TIME OF SURVEY CONDUCTED U/SEC. 133A, HOWEVER, CERTAIN INFORMATION WAS FOUND QUA SELLING OF FLATS AT HIGHER RATE THAN THE RATE RECORDED IN THE SALE DEEDS , HOWEVER THE AO WITHOUT CORROBORATION AND FULF ILLING THE INGREDIENTS OF SECTION 69A OF THE ACT MADE THE ADDIT ION U/S 69A OF THE ACT , HENCE W E ARE IN CONCURRENCE WITH THE FI N DING OF THE L D. COMMISSIONER QUA NON - APPLICATION OF THE PROVISIONS OF S ECTION 69A TO THE ISSUE IN HAND, CONSEQUENTLY NO IN T E R FERENCE IS WARRANTED QUA CONCLUSION DRAWN BY THE LD. COMMISSIONER . 5 ITA NO. 27 / VIZ /2021 C.O. NO.58/VIZ/2021 ( M/S. DEVISAI CONSTRUCTIONS AND DEVELOPERS (VIZAG) PVT. LTD. ) 6. THE REVENUE DEPARTMENT HAS ALSO RAISED A GRIEVANCE THAT THE L D. COMMISSIONER ERRED IN DIRECTING THE AO TO ESTIMATE THE PROFIT @ 15% O N UNACCOUNTED SALE RECEIPTS, WHEN THE PROVISIONS OF SECTION 69 OF THE ACT CLEARLY APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE L D. COMMISSIONER WHILE DECIDING NON - APPLICABILITY OF THE PROVISIONS OF SECTION 69A OF THE ACT TO THE CASE OF THE ASSESSEE, DIRECTED THE AO TO ESTIMATE PROFIT @15% ON UNACCOUNTED SALE RECEIPTS . WE ARE OF THE CONSIDERED OPINION THAT THE LD. COMMISSIONER THOUGH DECIDED THAT SECTION 69A OF THE ACT IS NOT APPLICABLE TO THE FACTS OF THE CASE, HOWEVER USED HIS OWN WISDOM BY CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES WHILE FOLLOWING THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF JAY BUILDER VS. ACIT IN TAX APPEAL NO. 255/2012 , DATED 11/12/2012 BY ESTIMATING PROFIT @15% ON UNACCOUNTED SALE RECEIPTS . THE DIR ECTION OF THE L D. COMMISSIONER IS BASED ON THE JUDGEMENT OF HONBLE HIGH COURT AND EVEN OTHERWISE IN FAVOUR OF THE REVENUE DEPARTMENT AND AGAINST THE ASSESSEE, THEREFORE, ON OVERALL CONSIDERATION, NO INTERFERENCE IS CALLED FOR ON THIS ISSUE A S W E L L . CONSEQUENTLY THE GROUND S RAISED BY THE REVENUE DEPARTMENT ARE LIABLE TO DISMISSED , HENCE O RDERED ACCORDINGLY. C.O.NO. 58/VIZ/2021 7 . THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE LD. COMMISSIONER, HENCE, DOES NOT REQUIRE ANY INTERFERENCE , CONSEQUENTLY THE SAME IS DISMISSED BEING INFRUCTUOUS. 6 ITA NO. 27 / VIZ /2021 C.O. NO.58/VIZ/2021 ( M/S. DEVISAI CONSTRUCTIONS AND DEVELOPERS (VIZAG) PVT. LTD. ) 8 . IN THE RESULT, APPEAL FILED BY THE REVENUE DEPARTMENT AND THE CROSS OBJECTION FILED BY THE A SSESSEE STAND S DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 3 R D DAY OF SEP. , 2021 . S D / - S D / - (D.S. SUNDER SINGH) ( N.K. CHOUDHRY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 3 R D SEP. , 20 2 1 . VR/ - C OPY TO: 1. THE ASSESSEE - M/S. DEVISAI CONSTRUCTIONS AND DEVELOPERS (VIZAG) PVT. LTD., PLOT NO.502, D.NO. 25 - 4 - 11, KALYAN CLASSIC APARTMENTS, PEDAGANTYADA, VISAKHAPATNAM. 2. THE REVENUE ITO, WARD - 3(1), VISAKHAPATNAM. 3. THE PR. CIT - 1 , VISAKHAPATNAM. 4. THE CIT(A) - 1 , VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.