DCIT, Jaipur V. UNIQUE AFFORDABLE HOMES (P) LTD, Jaipur

ITA 1008/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5224 (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
• Section: 145

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. 1008/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 THE DCIT CENTRAL CIRCLE- 2 JAIPUR CUKE VS. M/S. UNIQUE AFFORDABLE HOMES (P) LTD. 8 TH FLOOR, THE MILE STONE,TONK ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAACU 9543P 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. 1,19,26,183/- MADE ON THE BASIS OF SEIZED DOCUMENTS . ITA NO. 1008/JP/2015 THE DCIT, CENTRAL CIRCLE- 2, JAIPUR VS. M/S. UNIQU E AFFORDABLE HOMES (P) LTD. JAIPUR . 2 (2) WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) WAS JUSTIFIED IN NOT CONFIRMING TH E ADDITION OF RS. 1,19,26,183/- 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 VIDE ORDER DATED 15-03-2019 OF ITAT COORDINATE BENCH IN ASSES SEE'S OWN CASE (IN ITA NO. 587 & 588/JP/2012 FOR THE ASSESSMENT YEAR 2 008-09 AND 2009- 10 AND IN ITA NO. 623/JP/2012 OF REVENUE FOR THE AS SESSMENT YEAR 2009-10). THE LD. CIT(A) HAS GRANTED THE RELIEF TO THE ASSESSEE ON THE BASIS OF DECISION OF THE ITAT COORDINATE BENCH IN A SSESSEE'S OWN CASE (SUPRA). 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 AFFORDABLE HOMES (P) LTD. , RELIEF HAS BEEN GRANTED BY THE LD. CIT(A) ON THE BASIS OF THE DECIS ION OF ITAT COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA) BY OBSERVING A S UNDER:- ITA NO. 1008/JP/2015 THE DCIT, CENTRAL CIRCLE- 2, JAIPUR VS. M/S. UNIQU E AFFORDABLE HOMES (P) LTD. JAIPUR . 3 3.1.3 I HAVE DULY CONSIDERED ASSESSEE'S SUBMISSIO N AND ALSO TAKEN A NOTE OF FACTUAL MATRIX OF CASE AS EMANATING FROM THE ASSESSMENT ORDER PASSED BY THE AO. IN THIS CAS E, ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS. 1,08,78,346/ - AGAINST THE RETURNED INCOME OF (-) RS. 10,47,837/- WHEREIN AD DITION OF RS. 1,19,26,183/- ON ACCOUNT OF PROFIT COMPUTED BY CH ANGE IN METHOD OF ACCOUNTING TO PERCENTAGE COMPLETION METHOD. IN T HIS CASE, AT THE END OF F.Y. RELEVANT TO A.Y. 2012-13 APPELLANT HAS COMPLETED LES THAN 50% OF THE PROJECT. IN THE ASSESSMENT ORDER, A O HAS OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE WAS ASKED TO PRODUCE/ FURNISH, STOCK REGISTER BASIS OF VALUATION OF CLOSING STOCK AS WELL AS DETAIL/ INFORMATION INCLUD ING ORIGINAL VOUCHERS FOR THE PAYMENT MADE IN RESPECT OF DIRECT EXPENSES. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE STOCK R EGISTER AND ARGUED THAT CLOSING STOCK WAS VALUED AT COST. THE A SSESSEE STATED THAT STOCK OF COMPANY AND DIRECT EXPENSE, WHICH FOR M 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 ACC OUNTS AS REQUIRED BY LAW AND THAT ITS BOOKS DID NOT PRESENT TRUE AN D FAIR PICTURE OF ITS ACCOUNTS AND FINANCIAL TRANSACTIONS, THEREBY CO NTRAVENING THE PROVISIONS OF ACCOUNTING STANDARD (AS-1) ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (ICAI) AS WELL. IN V IEW OF THESE ASSESSEE SHOW CAUSE AS TO WHY ITS BOOKS OF ACCOUNT SHOULD NOT BE REJECTED U/S 145(3) OF THE ACT AND INCOME BE DETERM INED AS PER PERCENTAGE COMPLETION METHOD. ASSESSEE VIDE ITS LET TER DATED 26- 12-2004 FILED ITS DETAIL EXPLANATION WHICH IS REPR ODUCED BY THE AO IN THE ASSESSMENT ORDER IN PARA 6. AO HAS DISCUSSED THIS ISSUE IN PARA 7 OF THE ASSESSMENT ORDER AND HELD THAT ASSESS EE, BY FOLLOWING PROJECT COMPLETION METHOD, HAS NOT DECLARED COMPLET E AT CORRECT PROFIT AND AT THE SAME TIME BY NOT FOLLOWING AS-9 A ND AS-7, WHICH TANTAMOUNT TO NOT FOLLOWING AS-1 AS PER SECTION 145 (2) OF THE ACT, THE BOOKS DO NOT REPRESENT TRUE AND FAIR PICTURE AN D THEREFORE, REJECTED THE BOOKS OF ACCOUNT AND BY APPLYING PERCE NTAGE ITA NO. 1008/JP/2015 THE DCIT, CENTRAL CIRCLE- 2, JAIPUR VS. M/S. UNIQU E AFFORDABLE HOMES (P) LTD. JAIPUR . 4 COMPLETION METHOD DETERMINED PROFIT OF THE BUSINESS AT RS. 1,08,78,346/- RESULTING IN ADDITION OF RS. 1,19,26, 183/-. AR OF THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE IS MAINTAINING ITS DAY TO DAY BOOKS OF ACCOUNTS ALONG WITH COMPLETE RECORD OF MATERIAL PURCHASED AND EXPENSES INCURRED TOWARDS PROJECT DEVELOPMENT. AS PER THE CONSISTENT ACCOUNTING POLIC Y FOLLOWED BY THE ASSESSEE, THE REVENUE IS RECOGNIZED WHEN ALL SI GNIFICANT RISK AND TOWARDS OF OWNERSHIP ARE TRANSFERRED TO THE BUY ER AND NO EFFECTIVE CONTROL OF THE REAL ESTATE TO A DEGREE US UALLY ASSOCIATED WITH THE OWNERSHIP IS RETAINED. THUS THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING IN WHICH SALE IS RECOGNIZED ONLY WHEN TRANSACTION I S COMPLETE AND POSSESSION OF THE PROPERTY IS HANDED OVER TO THE BU YER. 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. 587 & 588/JP/2012 AND 62 3/JP/2012 HAS DELETED THE ENTIRE ADDITION MADE AND HELD THAT THE COMPUTATION OF INCOME BY FOLLOWING THE PROJECT COMPLETION METHO D IS THE CORRECT METHOD FOR THE RECOGNITION OF INCOME OF TH E 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. 597/ 12-13 DATED 16-12-13 AND ITA NO. 830/13-14 DATED 7-05-2014 RESP ECTIVELY HAS REVERSED THE AOS ACTION OF REJECTING BOOKS OF ACCO UNTS U/S 145(3) OF THE ACT AND COMPUTATION OF INCOME ON PERCENTAGE COMPLETION METHOD AND FINALLY GIVEN FULL RELIEF TO THE ASSESSE E. IT IS ALSO A FACT THAT AO HAS NOT BROUGHT ON RECORD ANY EVIDENCE OR C ASE LAW TO CONTROVERT THE FINDINGS OF THE HON'BLE ITAT IN THE RELATED CASE OF THE GROUP OF THE APPELLANT ON THE SAME FACTS, I FIN D THAT THE FACTS OF THIS CASE IS DIRECTLY COVERED BY AFOREMENTIONED DEC ISION OF HON'BLE ITAT BENCH JAIPUR (SUPRA) AND LD. CIT(A) , CENTRAL, JAIPUR. IN ITA NO. 1008/JP/2015 THE DCIT, CENTRAL CIRCLE- 2, JAIPUR VS. M/S. UNIQU E AFFORDABLE HOMES (P) LTD. JAIPUR . 5 VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE A ND 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. 1,19,26,183/- 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 AFFORDABLE HOMES (P) LTD. 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. 1008/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR