M/s Basant Colonisers & Builders (P) Ltd., Ludhiana V. DCIT, Ludhiana

ITA 1151/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8345 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 07-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 1151/CHD/2016 ASSESSMENT YEAR: 2012-13 M/S BASANT COLONISERS & VS THE DCIT, BUILDERS (P) LTD., SCO-1, CENTRAL CIRCLE-1, EXTN-1, BASANT AVENUE, LUDHIANA. ADJ. URBAN ESTATE, PHASE-II, DUGRI ROAD, LUDHIANA. PAN: AABCB9506E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 09.02.2017 DATE OF PRONOUNCEMENT : 09.02.2017 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-5 LUDHIANA DATED 31.08.2016 FOR ASSESSMENT YEAR 2012-13, CHALLENGING THE UPHOLDING OF THE ADDITION OF RS. 1,68,663/- OUT OF MAINTENANCE EXPENSES AND A SUM OF RS. 2,93,328/- ON ACCOUNT OF DEVELOPMENT EXPENSES. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSING OFFICER MENTIONED THAT OPENING BALANCE OF MAINTENAN CE DEPOSIT WAS RS. 2.71 CR OUT OF WHICH RS. 7,54,408/- HAS BEEN SPENT AND THE BALANCE AMOUNT IS STILL PENDING. FURTHER, THE ASSESSEE HAS CREATED THE RESERVE OF 2 RS. 1,68,663/- UNDER THE HEAD MAINTENANCE DEPOSIT AND AS THE SUM IS ONLY A PROVISION AGAINST THE FUTURE EXPENSES WHICH WERE DISALLOWED. SIMILAR IS WITH RE GARD TO DEVELOPMENT DEPOSIT, ASSESSING OFFICER HAS OBSER VED THAT THE OPENING BALANCE OF DEVELOPMENT DEPOSIT WAS RS. 80,38,700/- OUT OF WHICH RS. 1,15,108/- WAS SPENT A ND BALANCE AMOUNT IS STILL PENDING. FURTHER, ASSESSEE HAS CREATED THE RESERVE OF RS. 2,93,328/- DURING THE YE AR. THEREFORE, ASSESSING OFFICER DISALLOWED THE SAME. 3. THE LD. CIT(APPEALS) CONFIRMED THE ADDITION. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ISSUE IS COVERED BY ORDER OF DIVISION BENCH OF ITAT CHANDIGARH BENCH IN THE CASE OF THE SAME ASSESSEE F OR ASSESSMENT YEAR 2010-11 IN ITA NO. 563/2015 DATED 27.07.2016 IN WHICH ON IDENTICAL ISSUE, THE DEPARTM ENTAL APPEAL HAS BEEN DISMISSED. THE FINDINGS OF THE TRI BUNAL IN PARA 3 AND 4 ARE REPRODUCED AS UNDER : 3. ON GROUND NOS. 1 & 2, REVENUE CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN ALLOWING EXPENSES UNDER THE HEAD MAINTENANCE CLAIMED AT RS. 34,03,860/-. THE ASSESSEE CHALLENGED THIS ADDITION BEFORE LD. CIT(APPEALS) FOR DISALLOWANCE OF MAINTENANCE EXPENDITURE. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT ITAT CHANDIGARH BENCH IN THE CASE OF M/S DAMINI RESORTS & BUILDERS (P) LTD. IN ITA 404/2012 HAD ALLOWED THE APPEAL OF THE ASSESSEE AGAINST REVISION ORDER UNDER SECTION 263 OF THE INCOME TAX 3 ACT FOR ASSESSMENT YEAR 2007-08. THE TRIBUNAL HELD IN THIS CASE THAT METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE HAD BEEN REGULARLY FOLLOWED AND THEREFORE, NO ERROR HAD BEEN COMMITTED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR BY ALLOWING THE SAID EXPENDITURE AS CLAIMED. THE LD. CIT(APPEALS) FOUND THAT THE FACTS OF THIS CASE ARE IDENTICAL WITH THE CASE OF SISTER CONCERN NAMELY M/S DAMINI RESORT & BUILDERS (P) LTD., THEREFORE, FOLLOWING THE ORDER O F THE TRIBUNAL, DISALLOWANCE WAS DELETED. 4. AFTER HEARING RIVAL CONTENTIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. THE ASSESSEE IS BUILDER AND COLONIZER AND PRODUCED THE BOOKS OF ACCOUNT AND DETAILS BEFORE ASSESSING OFFICER AT ASSESSMENT STAGE. IT WAS CLAIMED THAT SAME METHOD OF ACCOUNTING IS FOLLOWED FOR BOOKING THESE EXPENDITURES. THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S DAMINI RESORTS & BUILDERS PVT. LTD. (SUPRA) DATED 31.10.2014 IS PLACED ON RECORD. THE LD. CIT(APPEALS) WAS, THEREFORE, JUSTIFIED IN FOLLOWING THE DECISION OF THE TRIBUNAL FOR THE PURPOSE OF DELETING THE ADDITION. NO INFIRMITY IN THE ORDER O F THE LD. CIT(APPEALS) HAVE BEEN POINTED OUT. THEREFORE, THESE GROUNDS OF APPEAL OF REVENUE HAVE NO MERIT AND ARE ACCORDINGLY, DISMISSED. 5. IT IS ADMITTED BY BOTH THE PARTIES THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER DATED 27.07.2016 (SUPRA). FOLLOWING THE ORDER OF THE TRI BUNAL ABOVE, I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND 4 DELETE THE ADDITION. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 9 TH FEBRUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH