DCIT, Jaipur V. UNIQUE BUILDERS & DEVELOPERS (AJAY), Jaipur

ITA 1007/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5223 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 23-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Document seized; Documents seized

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF;D LN L; DS LE{K BEFORE:SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, J M VK;DJ VIHY LA-@ ITA NO. 1007/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 THE DCIT CENTRAL CIRCLE- 2 JAIPUR CUKE VS. M/S. UNIQUE BUILDERS & DEVELOPERS (AJAY), 8 TH FLOOR, THE MILE STONE, TONK ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACFU 0541 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY: SHRI M.S. MEENA, CIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13/06/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 15/06/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)- 4, JAIPUR DATED 30-10-2015 FOR THE ASSESSME NT YEAR 2012-13 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. (1) WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION O F RS. 4,75,08,276/- MADE ON ACCOUNT OF SEIZED DOCUMENTS. ITA NO. 1007/JP/2015 THE DCIT, CENTRAL CIRCLE- 2, JAIPUR VS. M/S. UNIQU E BUILDERS & DEVELOPER (AJAY) JAIPUR . 2 (2) WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) WAS RIGHT IN NOT CONFIRMING THE ADDI TION OF RS. 4,75,08,276/- MADE BY THE AO BY ADOPTING THE PERCENTAGE COMPLETION METHOD FOR COMPUTING THE TRUE AND CORRECT INCOME OF THE ASSESSEE. 2.1 AT THE OUTSET OF THE HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ISSUES RAISED BY THE REVENUE IN THIS APPEA L ARE COVERED BY THE ORDER OF ITAT COORDINATE BENCH IN ASSESSEE'S OWN CA SE. THE LD. CIT(A) HAS GRANTED THE RELIEF TO THE ASSESSEE ON THE BASIS OF DECISION OF THE ITAT COORDINATE BENCH IN ASSESSEE'S OWN CASE. 2.2 THE LD. DR RELIED ON THE ORDER OF THE AO. 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T IN THE CASE OF THE ASSESSEE I.E. M/S. UNIQUE BUILDERS & DEVELOPERS (AJ AY), RELIEF HAS BEEN BY THE LD. CIT(A) ON THE BASIS OF THE DECISION OF I TAT COORDINATE BENCH IN ASSESSEE'S OWN CASE VIDE ORDER DATED 15-03-2013 (IN ITA NOS. 589 & 590/JP/2012 FOR THE ASSESSMENT YEAR 2008-09 & 2009- 10 ASSESSEE AND IN ITA NO. 618 & 619/JP/2012 FOR THE ASSESSMENT YEA R 2008-09 & 2009- 10 REVENUE) BY OBSERVING AS UNDER:- 3.2 I HAVE DULY CONSIDERED ASSESSEE'S SUBMISSION AND ALSO TAKEN A NOTE OF FACTUAL MATRIX OF CASE AS EMANATING FROM THE ITA NO. 1007/JP/2015 THE DCIT, CENTRAL CIRCLE- 2, JAIPUR VS. M/S. UNIQU E BUILDERS & DEVELOPER (AJAY) JAIPUR . 3 ASSESSMENT ORDER PASSED BY THE AO. IN THIS CASE, AS SESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS. 4,75,08,276/- AG AINST THE NIL RETURNED WHEREIN ADDITION ON ACCOUNT OF PROFIT COM PUTED BY CHANGE IN METHOD OF ACCOUNTING TO PERCENTAGE COMPLE TION METHOD. IN THIS CASE, AT THE END OF F.Y. RELEVANT TO A.Y. 2 012-13 APPELLANT HAS COMPLETED LESS THAN50% OF THE PROJECT. IN THE A SSESSMENT ORDER, AO HAS OBSERVED THAT DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE/ FUR NISH, STOCK REGISTER BASIS OF VALUATION OF CLOSING STOCK AS WEL L AS DETAIL/ INFORMATION INCLUDING ORIGINAL VOUCHERS FOR THE PAY MENT MADE IN RESPECT OF DIRECT EXPENSES. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE STOCK REGISTER AND ARGUED THAT CLOSING STOCK WAS VALUED AT COST. THE ASSESSEE STATED THAT STOCK OF C OMPANY AND DIRECT EXPENSE, WHICH FORM PART OF STOCK OF PROJECT -IN-PROGRESS. IN THIS REGARD, THE AO HELD THAT THIS PROVED THAT THE ASSESSEE DID NOT MAINTAIN ITS BOOKS OF ACCOUNTS AS REQUIRED BY LAW A ND THAT ITS BOOKS DID NOT PRESENT TRUE AND FAIR PICTURE OF ITS ACCOUNTS AND FINANCIAL TRANSACTIONS, THEREBY CONTRAVENING THE PR OVISIONS OF ACCOUNTING STANDARD (AS-1) ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (ICAI) AS WELL. IN VIEW OF THE SE ASSESSEE SHOW CAUSE AS TO WHY ITS BOOKS OF ACCOUNT SHOULD NOT BE REJECTED U/S 145(3) OF THE ACT AND INCOME BE DETERMINED AS PER P ERCENTAGE COMPLETION METHOD. IN COMPLIANCE, ASSESSEE SUBMITTE D A DETAIL EXPLANATION VIDE LETTER DATED 26-12-2004 WHICH IS R EPRODUCED BY THE AO IN THE ASSESSMENT ORDER IN PARA 6. AO HAS DI SCUSSED THIS ISSUE IN PARA 7 OF THE ASSESSMENT ORDER AND HELD TH AT ASSESSEE, BY FOLLOWING PROJECT COMPLETION METHOD, HAS NOT DECLAR ED COMPLETE AT CORRECT PROFIT AND AT THE SAME TIME BY NOT FOLLOWIN G AS-9 AND AS-7, WHICH TANTAMOUNT TO NOT FOLLOWING AS-1 AS PER SECTI ON 145(2) OF THE ACT, THE BOOKS DO NOT REPRESENT TRUE AND FAIR P ICTURE AND THEREFORE, REJECTED THE BOOKS OF ACCOUNT AND BY APP LYING PERCENTAGE COMPLETION METHOD DETERMINED PROFIT OF T HE BUSINESS RESULTING IN ADDITION OF RS. 4,75,08,276/-. AR OF THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE IS MAINTAINING ITS DAY TO DAY BOOKS OF ACCOUNTS ALONG WITH COMPLETE ITA NO. 1007/JP/2015 THE DCIT, CENTRAL CIRCLE- 2, JAIPUR VS. M/S. UNIQU E BUILDERS & DEVELOPER (AJAY) JAIPUR . 4 RECORD OF MATERIAL PURCHASED AND EXPENSES INCURRED TOWARDS PROJECT DEVELOPMENT. AS PER THE CONSISTENT ACCOUNTI NG POLICY FOLLOWED BY THE ASSESSEE, THE REVENUE IS RECOGNIZED WHEN ALL SIGNIFICANT RISK AND TOWARDS OF OWNERSHIP ARE TRANS FERRED TO THE BUYER AND NO EFFECTIVE CONTROL OF THE REAL ESTATE T O A DEGREE USUALLY ASSOCIATED WITH THE OWNERSHIP IS RETAINED. THUS TH E ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING PROJECT COMPLETION MET HOD OF ACCOUNTING IN WHICH SALE IS RECOGNIZED ONLY WHEN TR ANSACTION IS COMPLETE AND POSSESSION OF THE PROPERTY IS HANDED O VER TO THE BUYER. THEREFORE, AR HAS ALSO CLARIFIED THAT ASSESSEE'S CA SE IS COVERED BY THE DECISION OF HON'BLE ITAT JAIPUR BEN CH IN ITS OWN CASE FOR A.YS. 2008-09 AND 2009-10 WHEREIN HON'BLE ITAT BENCH JAIPUR VIDE ITA NO. 589 & 590/JP/2012 AND 618 & 619 /JP/2012 (PB 1-14) HAS DELETED THE ENTIRE ADDITION MADE AND HELD THAT THE COMPUTATION OF INCOME BY FOLLOWING THE PROJECT COMP LETION METHOD IS THE CORRECT METHOD FOR THE RECOGNITION OF INCOM E OF THE ASSESSEE, WHICH IS REGULARLY FOLLOWED BY THE ASSESSEE. FURTHER, FOR A.Y. 2010-11 & 2011-12 LD. CIT(A) CENT RAL JAIPUR FOR A.Y. 2010-11 & 2011-12 VIDE ITA NO. 602/ 12-13 DATED 23-09-2013 AND ITA NO. [827/13-14] DATED 5-05-2014 RESPECTIVELY HAS REVERSED THE AOS ACTION OF REJECTING BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT AND COMPUTATION OF INCOME ON PERC ENTAGE COMPLETION METHOD AND FINALLY GIVEN FULL RELIEF TO THE ASSESSEE. IT IS ALSO A FACT THAT AO HAS NOT BROUGHT ON RECORD ANY E VIDENCE OR CASE LAW TO CONTROVERT THE FINDINGS OF THE HON'BLE ITAT IN THE RELATED CASE OF THE GROUP OF THE APPELLANT ON THE SAME FACT S, I FIND THAT THE FACTS OF THIS CASE IS DIRECTLY COVERED BY AFOREMENT IONED DECISION OF HON'BLE ITAT BENCH JAIPUR (SUPRA) AND LD. CIT(A) , CENTRAL, JAIPUR. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE ITAT AND LD. CIT(A), CENTRAL, JAIPUR THE GROUNDS OF APPEAL NO.1, 2.0 & 2.1 ARE DECIDED IN FAVOUR OF THE ASSESSEE AND ADDITION MADE OF RS. ITA NO. 1007/JP/2015 THE DCIT, CENTRAL CIRCLE- 2, JAIPUR VS. M/S. UNIQU E BUILDERS & DEVELOPER (AJAY) JAIPUR . 5 4,75,08,276/- BY FOLLOWING PERCENTAGE COMPLETION ME THOD IS HEREBY DELETED. BY RESPECTFULLY FOLLOWING THE DECISION OF COORDINAT E BENCH IN ASSESSEE'S OWN CASE (SUPRA), WE DISMISS THE APPEAL OF THE REVE NUE. 3.0 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/06/2016 . SD/- SD/- YFYR DQEKJ HKKXPUN (LALIET KUMAR) (BHAGCHAND ) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15 /06/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT, CIRCLE-2. JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-M/S.UNIQUE BUILDERS & DEVELOPERS (AJ AY), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 1007/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR