DCIT CIRCLE-3(1), GWALIOR V. G.L.R. REAL ESTATE P LTD, GWALIOR

ITA 464/AGR/2018

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax, Circle 3(1), Gwalior against M/s. GLR Real Estate (P) Ltd. concerning the assessment year 2011-12. The primary issues revolved around the revaluation of Work-in-Progress (WIP) and the recognition of profits from construction projects. The Assessing Officer had made additions to the assessee's income based on a survey and subsequent revaluation of WIP, which was contested. The CIT(A) had deleted these additions, leading to the revenue's appeal to the Tribunal. The Tribunal upheld the CIT(A)'s decision, emphasizing the consistency in accounting methods and the principle against double taxation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126465 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUKESH KUMAR JAIN LD.
• Assessee Lawyers: GOURAV GOYAL; LD
• Keywords: Business income; Capital Gains; Dismissed; Commissioner; Commissioner of Income Tax; Transfer; Deleted; AY 2010-11; Disclosure
• Section: 143(3); 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No. 464/Agr/2018 (िनधा \u000fरणवष\u000f / Assessment Year:2011-12) DCIT-Circle 3(1) Gwalior. बनाम/ Vs. M/s. GLR Real Estate (P) Ltd., D-2, Silver Estate, University Road, RKVM CBSE, Gwalior (MP). \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No. AACCG-4572-A (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Sh. Sukesh Kumar Jain – Ld. CIT-DR थ कीओरसे/Respondent by : Sh. Gourav Goyal, CA – Ld. AR सुनवाईकीतारीख/Date of Hearing : 20-02-2025 घोषणाकीतारीख /Date of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2011-12 arises out of an order passed by learned Commissioner of Income Tax (Appeals), Gwalior [CIT(A)] on 27-03-2018 in the matter of an assessment framed by Ld. AO u/s 143(3) on 19-03-2014. Having heard rival submissions, our adjudication would be as under. 2. From case records, it emerges that the assessee is engaged in construction business. The assessee has shown improved Gross Profit in this year. Pursuant to survey on assessee u/s 133A on 15/16-04-2010, statement of director Shri R.D. Gupta was recorded wherein he disclosed additional income of Rs.135 Lacs on account of suppression of Work-in- progress (WIP) as on 31-03-2010. As per the statement, the WIP as on 31-03-2010 was agreed to be taken for Rs.790.55 Lacs as 2 againstRs.655.55 Lacs as determined as per Trading Account drawn on 15-04-2010. However, the assessee failed to disclose the same in the return of income. The assessee stated that the additional income was admitted by revaluing the closing stock of WIP in AY 2010-11. The Ld. AO recasted the trading account on the date of survey and made addition of Rs.164.30 Lacs in the hands of the assessee. 3. The Ld. CIT(A), in para 6.1, rendered factual finding that the assessee had duly revised its WIP of its projects for the year ended 31- 03-2010 and had incorporated the same in the return of income for AY 2010-11. The disclosure was made for AY 2010-11 and not for 2011-12. The case for AY 2010-11 was already scrutinized u/s 143(3) without making any addition on account of suppression of WIP. The Ld. AO did not give any cogent reason to disturb the figures shown in the audited trading account and that too, without rejecting the books u/s 145(3). Accordingly, the impugned addition was deleted against which the revenue is in further appeal before us. 4. The factual findings as rendered by Ld. CIT(A) remain uncontroverted before us. Once the figures of WIP has been enhanced in AY 2010-11 which has been accepted in scrutiny u/s 143(3), the same could not be added again. The Ld. AO has re-casted the trading account without rejecting the books u/s 145(3). Therefore, no infirmity could be found in the impugned order on this issue. 5. The Ld. AO also tinkered with the gross profit shown in Gulmohar city (1A) project by considering 25% of WIP as gross profit. The assessee reflected WIP as on 31-03-2011 for Rs.128.76 Lacs which was increased by expenses of Rs.151.50 Lacs transferred to Green Park Project. Both items aggregated to Rs.280.27 Lacs. Since no profit was 3 shown from this WIP, Ld. AO estimated 25% Gross profit on WIP and made addition of Rs.70 Lacs. Similar working was done for Jasmine Project and Green Park Project. All these additions aggregated to Rs.378.19 Lacs. 6. The Ld. CIT(A), in para 6.2, noted that the assessee reflected profits of these projects on ‘completion of work’ basis as per consistent accounting policy. The assessee has reflected profit from these projects in various years accordingly. This method is one of the recognized methods for revenue recognition. Adding the same in this year would amount to double addition. Accordingly, the impugned addition was deleted against which the revenue is in further appeal before us. 7. It is quite clear that following a particular consistent method of accounting, the assessee has offered profit from these projects in various years. This fact remains to be controverted before us. As rightly held by Ld. CIT(A), adding estimated profit of 25% in this year would amount to double taxation which is impermissible. Therefore, no infirmity could be found in the impugned order on this issue. 8. The Ld. AO made another addition on sale of Flat No.822, Silver Estate which was kept as stock-in-trade but the assessee declared the same under the head Long Term Capital Gains. Accordingly, the profit of Rs.9.60 Lacs was added as business income of the assessee. 9. The Ld. CIT(A), in para 6.4, held that the said flat was never shown as stock-in-trade but it was part of fixed assets and accordingly, the gains were assessable under the head capital gains only. This position could not be disturbed before us. Therefore, we do not find any infirmity in the impugned order on this issue. 4 10. The appeal stands dismissed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) 4ा ियक सद5 /JUDICIAL MEMBER लेखा सद5 /ACCOUNTANT MEMBER Dated: 22.04.2025 आदेश की 7ितिलिप अ9ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु1/CIT 4. िवभागीय ितिनिध/DR 5. गाड7फाईल/GF ASSISTANT REGISTRAR ITAT AGRA "