ACIT, New Delhi V. M/s. Sabh Infrastructure Ltd., New Delhi

ITA 115/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4045 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 07-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: RISHABH JAIN C S
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SMT. BEENA A. PILLAI , JM ITA NO. 115/DEL/2015 : ASSTT. YEAR : 2011 - 12 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 22 (1 ) , NEW DELHI VS M/S SABH INFRASTRUCTURE LTD., C - 27, 2 ND FLOOR, PAMPOSH ENCLAVE, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A BCS5720R ASSESSEE BY : SH. RISHABH JAIN, C.S. REVENUE BY : S H. KAUSHLENDRA TIWARI, SR. DR DATE OF HEARING : 03.01 .201 8 DATE OF PRONOUNCE MENT : 15 .01 .201 8 ORDER PER N. K. SAINI, AM : THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 14.10 .2014 OF LD. CIT(A) - X , DELH I 2 . THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL READS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.74,94,665/ - ON THE BASIS OF PERCENTAGE COMPLETION METHOD. 3 . FROM THE ABOVE GROUNDS, IT IS GATHERED THAT TH E ONLY ISSUE AGITATED BY THE DEPARTMENT RELATES TO THE DELETION OF ADDITION OF RS.74,94,665/ - MADE BY THE AO ON THE BA S IS OF PERCENTAGE COMPLETION METHOD. ITA NO . 115 /DE L/201 5 SABH INFRASTRUCTURE LTD. 2 4. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT NOW THIS ISSUE IS SQUARELY COVERED IN ASSESSEE S FAVOUR BY THE EARLIER ORDER OF THE ITAT FOR THE ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 WHICH HAS BEEN CONFIRMED BY THE HON BLE JURISDICTIONAL HIGH COURT (COPIES OF THE SAID ORDERS WERE FURNISHED WHICH ARE PLACED ON RECORD) . 5 . IN HIS RIVAL SUBMISSIONS, THE LD. DR ALTHOUGH SUPPORTED THE ORDER OF THE AO BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATE RIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE ADOPTED PERCENTAGE COMPLETION METHOD AND COMPUTED THE PROFIT WHILE THE AO WAS OF THE VIEW THAT THE ASSESSEE OUGHT TO HAVE ADOPTED THE PERCENTAGE COMPLETION METHOD. HOWEVER, T HE AO HIMSELF ADMITTED IN THE ASSESSMENT ORDER DATED 28.03.2013 THAT THIS ADDITION HAS BEEN MADE, SINCE, THE REVENUE HAD CHALLENGED THE ORDER DATED 28.04.2012 FOR THE ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 PASSED BY THE ITAT AND THAT THE LD. CIT (A) VIDE ORDER DATED 07.12.2012 DELETED THE ADDITIONS FOR THE ASSESSMENT YEARS 2008 - 09 TO 2010 - 11 BUT THE DEPARTMENT HAS CHALLENGED THE ORDER OF THE ITAT IN APPEAL BEFORE THE HON BLE DELHI HIGH COURT. IN THE INSTANT CASE, T HE LD. CIT(A) WHILE DECIDING THE APP EAL OF THE ITA NO . 115 /DE L/201 5 SABH INFRASTRUCTURE LTD. 3 ASSESSEE CATEGORICALLY STATED IN THE IMPUGNED ORDER WHILE DELETING THE IMPUGNED ADDITION THAT HE WAS BOUND TO FOLLOW THE DECISION ON THIS ISSUE IN THE EARLIER YEARS. IT IS NOTICED THAT THE HON BLE JURISDICTIONAL HIGH COURT VIDE ORDER DATED 07.01 .2015 DISMISSED THE APPEAL OF THE DEPARTMENT ON THE SIMILAR ISSUE BY OBSERVING AS UNDER: THE BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGED IN REAL ESTATE DEVELOPMENT AND DERIVES ITS INCOME FROM ACTUAL SALE AND TRANSFER OF PROPERTY. FOR THIS PURPOSE, IT P URCHASES LAND - INCLUDING BUILT UP PROPERTY - WHICH IT SUBSEQUENTLY DEMOLISH ES AND DEVELOPS IN THE LAYOUT TOWNSHIP AND AFTER WHICH THE RESIDENTIAL UNITS ARE SOLD. IN ALL PREVIOUS YEARS, THE ASSESSEE HAD ADOPTED AS - 9, I.E., THE PROJECT COMPLETION METHOD WHE REBY THE CONSIDERATION RECEIVED ON ACTUAL SALES WAS SHOWN IN ITS BOOKS AND CLAIMED AS INCOME. APPARENTLY, IN A PREVIOUS DETAILED ORDER, THE ITAT SANCTIONED THIS METHOD AND HELD IT TO BE APPLICABLE TO THE BUSINESS OF THE ASSESSEE, FOR AY 2006 - 07 AND 2007 - 08 . THE CIT (A) HAD, FOR THE YEARS IN QUESTION IN THESE APPEALS, CONSI DERED THE DECISION OF THE ITAT FOR THOSE YEARS (ITA NOS.4572/DEL/09 AND 2813/DEL/2010 DATED 20.4.2012. IN THE SAID DECISION OF THE ITAT, THE PREVIOUS JUDGMENT OF THIS COURT IN CIT V. MANIS H BUILDWELL PVT. LTD. (ITA 928 /2011) DECIDED ON 15.11.2011, WAS RELIED UPON. LIKEWISE, THE SUPREME CO URT RULING IN CIT V. BELAHARI INVESTMENTS PVT. LTD., (2008) 299 ITR 1, TO THIS EFFECT - WHICH DISCUSSED BOTH THE PERCENTAGE COMPLETION AND THE PR OJECT COMP LETION METHODS, AND NOTED ITS DIFFERENCE WERE CONSIDERED. IN M ANISH BUILDWELL (SUPRA) IT WAS HELD THAT IT CANNOT BE SAID THAT PROJECT C OMPLETION METHOD WOULD RESULT IN DEFERMENT IN PAYMENT OF TAXES WHICH AR E TO BE ASSESSED ANNUALLY. THE ITAT IN THESE CIRCU MSTANCES HELD - IN RELAT ION TO THE ASSESSEE/RESPONDENT - THAT THE ADOPTION OF ITA NO . 115 /DE L/201 5 SABH INFRASTRUCTURE LTD. 4 THE PROJECT COMPLETION METHOD IS AN ESTABLISHED METHOD OF ACCOUNTING. IN THESE CIRCUMSTANCES, WITHOUT THERE BEING ANY RATIONALE OR NEW DEVELOPMENT, THE REVENUE COULD NOT HAVE CO NCLUDED THAT THE PROJECT COMPLETION METHOD WAS NOT APPROPRIATE FOR THE ASSESSEE. CONSEQUENTLY, IT IS HELD THAT NO SUBSTANTI AL QUESTION OF LAW ARISES FOR CONSIDERATION. THE APPEALS ARE ACCORDINGLY DISMISSED. 7 . FROM THE AFORESAID DISCUSSION, IT IS NOW CLE AR THAT THE HON BLE JURISDICTIONAL HIGH COURT SETTLED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT IN ASSESSEE S OWN CASE VIDE ORDER DATED 07.01.2015. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 8 . IN THE RESUL T, THE APPEAL OF THE DEPARTMENT IS DISMISSED. (ORDER P RONOUNCED IN THE COURT ON 15 /01/2018 ) SD/ - SD/ - ( BEENA A. PILLAI ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15 /01/ 2018 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR