Khandesh Builders Ltd, Jalgaon V. DCIT, Jalgaon

ITA 1168/PUN/2012

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4626 (ITAT-PUNE)
• Duration Of Justice: 6 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-08-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 05-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 115JB; 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R. S. SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 1168, 1169 & 1170/PUN/2012 / ASSESSMENT YEAR : 2004-05, 2005-06 & 2008-09 KHANDESH BUILDERS LTD, 303, SHIVAJI NAGAR, JALGAON-425001 MAHARASHTRA. PAN : AAVPM4253A .... / APPELLANT / V/S. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, JALGAON, 1 ST FLOOR, OLD BHIAKCHAND JAIN MARKET, JALGAON-425001. / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO, AR REVENUE BY : SHRI PANKAJ GARG, DR / DATE OF HEARING : 14.03.2019 / DATE OF PRONOUNCEMENT : 14.03.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THESE THREE (3) APPEALS PREFERRED BY THE ASSESSEE EMA NATES FROM THE COMMON ORDER OF THE LD. CIT(APPEAL)-II, NASHIK DATED 29.03.12 FOR AY : 2004-05, 2005-06 & 2008-09 AS PER THE GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 1168, 1169 & 1170/PUN/2012 KHANDESH BUILDERS LTD. 2. SINCE THE ISSUE INVOLVED IN ALL THE APPEALS ARE COMMON, THEREFORE THEY ARE HEARD TOGETHER AND DISPOSED OF BY T HIS CONSOLIDATED ORDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE ACTIVITIES OF CONSTRUCTION AND ALSO TRADING IN SHARES AND SECURITIES. THE ASSESSEE HAS SHOWN TOTAL INCOME AT RS. NI L DISREGARDING THE MANDATORY PROVISIONS OF SECTION 115JB. THE BOOK PROFIT FOR AYS. 2004-05, 2005-06 AND 2008-09 ARE RS.5 , 72,65,157/-, RS. 2,19,06,533/- AND RS. 3,08,99,000/ - RESPECTIVELY. THE ASSESSEE PLEADED BEFORE THE AO THAT IT HAS CHALLENGED THE CONSTITUTIONAL VALIDITY OF THE SECTI ON 115JB IN THE BOMBAY HIGH COURT, BENCH AURANGABAD AND FILED A COPY OF ORDER DATED11.06.08 IN SUPPORT OF HIS CONTENTIONS T HAT THE WRIT PETITION WAS ADMITTED. THE AO DID NOT ACCEPT THE CO NTENTION OF THE ASSESSEE BY OBSERVING THAT EVEN THOUGH CONSTITU TIONAL VALIDITY OF SECTION 115JB WAS CHALLENGED BY THE ASS ESSEE , THE HON'BLE HIGH COURT HAS NOT GRANTED ANY INTERIM RELIEF. THEREFORE, THE AO APPLIED PROVISION OF SECT ION 115JB AND WORKED OUT TOTAL INCOME CALCULATED ON THE BOOK PROF IT. 4. THAT ON THE ISSUE, THE OBSERVATION OF LD. CIT(A) ARE AS UNDER APPEARING AT PARA NO. 4 ONWARDS OF HIS ORDER: - 4. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CAS E, THE RIVAL CONTENTIONS AND THE POSITION OF LAW ON TH E SUBJECT. THE APPELLANT IS A COMPANY ENGAGED IN THE BUSINESS OF SHARE TRADING AND INVESTMENT IN SECURITIES. ITS ACCOUNTS ARE AUDITED U/S 44AB AND A S PER THE AUDITED ACCOUNTS IT HAS SHOWN NET PROFITS AS PER P & L A/C AT RS. 5,84,86,162/-, RS. 3 ITA NO. 1168, 1169 & 1170/PUN/2012 KHANDESH BUILDERS LTD. 2,19,92,323/- AND RS. 1 , 60,97,844/- FOR AYS 2004- 05,05-06,08-09 RESPECTIVELY. SECTION 115JB(L) READS AS UNDER:- NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, WHERE IN THE CASE OF AN ASSESSEE, BEING A COMPANY, THE INCOME-TAX , PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THIS ACT IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL, 2010, IS LESS THAN FIFTEEN PER CENT OF ITS BOOK PROFIT, SUCH BOOK PROFI T SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AND THE TAX PAYABLE BY THE ASSESSEE ON SUCH TOTAL INCOME SHALL BE THE AMOUNT OF INCOME-TAX AT THE RATE OF FIFTEEN PERCENT. 4.1 AS MAY BE SEEN SECTION 115JB OVERRIDES OTHER NORMAL PROVISIONS OF THE ACT, THEREFORE, IN CASE OF THE BOOK PROFIT WAS ARRIVED AT AS PER THE MECHANISM PROVIDED BY THE S ECTION ITSELF, THE AO WA S DUTY BOUND TO INVOKE SECTION 115JB AND ARRIVE AT A TOTAL INCOM E . IN THE PRESENT CASE, THE ASSESSIN G OFFICER HAS PRECISELY DONE THE SAME BY ARRIVING AT THE TOTAL INCOME ON THE BOOK PROFIT S . IT IS NOT THE CASE OF THE ASSESSEE THAT THERE WAS NO BOOK PROFITS, NOR ANY MISCALCULATION OR ERROR IN COMPUTING THE BOOK PROFI T U/S 115JB WAS BROUGHT T O MY NOTICE . IN VIEW OF THESE FACTS AND THE POSITION OF LAW, THE TOTAL INCOME ARRIVED AT BY THE ASSESSING OFFICER ON THE BOOK PROFITS IS HELD TO BE ACCORDING TO THE LAW , T HE SAME IS, THEREFORE, UPHELD AND NO INTERFERENCE IS REQUIRED BY ME. 5. WITH REGARD TO THE CONTENTION OF THE APPELLANT T HAT THE PROCEEDINGS BEFORE ME MAY BE KEPT PENDING TILL THE DECISION OF THE HON'BLE HIGH COURT ON THEIR WRIT PETITION , ON GOING THROUGH THE W . B . NO. 2071 OF 2008, 4 ITA NO. 1168, 1169 & 1170/PUN/2012 KHANDESH BUILDERS LTD. I T IS SEEN THAT THE RESPONDENTS ARE CIT-II NASHIK , ACIT CIR-2 JALGAON AND UNION OF INDIA. THE CIT(A) IS NOT THEREFORE A RESPONDENT IN THE SAID PETITION. FURTHER, ON GOING THROUGH THE ORDER DATED 11/06/2008, IT IS EVIDENT THAT THE HON'BLE HIGH COURT HAS NOT GRANTED ANY INTERIM RELIEF WITH REGAR D TO THE STAY ON THE OPERATION OF SECTION 115JB . THEREFORE, IN VIEW OF THE FACT THAT THERE IS NO PRONOUNCEMENT ON THE CONSTITUTIONAL VALIDITY OF THE SECTION, I SEE NO JUSTIFICATION IN KEEPING THE APPE ALS PENDING. CONSEQUENTLY THIS ARGUMENT OF THE ASSESSEE IS REJECTED 5. AT THE TIME OF HEARING, LD.A.R. OF THE ASSESSEE SUBMITTE D THAT THEY HAVE MOVED A DECLARATION IN THE PRESCRIBED FORM AND MANNER AS MANDATED U/S 158A(1) OF THE ACT, WHEREBY ASSESSEE HAS S UBMITTED THAT SINCE THE CONSTITUTIONAL VALIDITY OF SECTION 115JB HAS BEEN CHALLENGED BEFORE THE HON'BLE BOMBAY HIGH COURT AND FOR THE FACT THAT THE WRIT PETITION HAS BEEN ADMITTED, THEREFORE THE P RESENT PROCEEDINGS MAY BE KEPT IN ABEYANCE TILL THE DISPOSAL OF T HE WRIT PETITION BY THE HON'BLE BOMBAY HIGH COURT. PER CONTRA, T HE LD. D.R CONTENTIONS WERE THAT THE PROVISION OF SECTION 115JB AS ON DATE IS VALID AND ENTIRE PROCEEDING IN CASES OF THE ASSESSEE HAS BEEN PROCEEDED UNDER THE SAID PROVISION AND ALSO THAT HON'BLE JURISDICTIONAL HIGH COURT, AURANGABAD BENCH HAS NOT PROTE CTED THE ASSESSEE VIS--VIS TAX LIABILITY AFTER BEING ASSESSED DURING THE PENDENCY OF THE WRIT PETITION. NO INTERIM RELIEF HAS BEEN P ROVIDED TO THE ASSESSEE PENDING DISPOSAL OF THE SAID WRIT PETITION. 5 ITA NO. 1168, 1169 & 1170/PUN/2012 KHANDESH BUILDERS LTD. 6. WE HAVE PERUSED THE CASE RECORDS, HEARD THE RIVAL C ONTENTIONS AND ANALYSED THE FACTS AND CIRCUMSTANCES OF THE CASE. T HE CASE ON RECORD ARE THAT THE TAXABILITY OR BOOK PROFIT U/S 115JB HAS BEEN UPHELD IN THE CASE OF THE ASSESSEE BY THE REVENUE AUTH ORITIES. THE ASSESSEE HAS FILED A WRIT PETITION BEFORE THE HON'BLE BOMBA Y HIGH COURT, AURANGABAD BENCH, CHALLENGING THE CONSTITUTIONAL VALIDITY OF THE SECTION 115JB OF THE ACT AND THIS WRIT PETIT ION IS ADMITTED BY THE HON'BLE BOMBAY HIGH COURT, BENCH AURANGABAD, HOWEVER THE SAME HAS NOT BEEN DISPOSED OF TILL DATE. 7. ON PERUSAL OF THE ORDER OF HON'BLE BOMBAY HIGH C OURT, AURANGABAD BENCH, THE WRIT PETITION OF THE ASSESSEE WAS ADMITTED, IN VIEW OF THE S.L.P. ON THIS ISSUE BEING ADMITTED IN THE HON'BLE SUPREME COURT FROM A DECISION OF THE HO N'BLE DELHI HIGH COURT REPORTED IN 192 ITR 187. FURTHER IN PARA NO. 5 OF THE SAID ORDER CATEGORICALLY STATES THAT PENDENCY OF TH E PETITION DOES NOT IN ANY MANNER PROVIDE IMMUNITY TO THE PETITIONE R FROM PAYING TAX LIABILITY AS ASSESSED UNDER THE PROVISIO N SINCE THE SECTION IS IN OPERATION W.E.F. 01.04.01. IT IS CORR ECT THAT THE WRIT PETITION FILED BY THE ASSESSEE HAS BEEN ADMITTED BY THE HON'BLE JURISDICTIONAL HIGH COURT, AURANGABAD BENCH, HOWEVE R IT IS ALSO CORRECT THAT NO INTERIM RELIEF HAS BEEN PROVIDED BY THE HON'BLE HIGH COURT AND IT IS CATEGORICALLY MENTIONED THAT I RRESPECTIVE OF THIS PETITION BEING PENDING BEFORE THE HON'BLE HIGH COURT, THIS IN ANY MANNER WILL NOT PROVIDE ANY IMMUNITY TO THE ASSESSEE FROM PAYING TAX LIABILITY AS ASSESSED. 6 ITA NO. 1168, 1169 & 1170/PUN/2012 KHANDESH BUILDERS LTD. 8. AS MAY BE SEEN SECTION 115JB OVERRIDES OTHER NOR MAL PROVISIONS OF THE ACT, THEREFORE, IN CASE OF THE BO OK PROFIT WAS ARRIVED AT AS PER THE MECHANISM PROVIDED BY THE S ECTION ITSELF, THE AO WA S DUTY BOUND TO INVOKE SECTION 115JB AND ARRIVE AT A TOTAL INCOM E . IN THE PRESENT CASE, THE AO HAS PRECISELY DONE THE SAME BY ARRIVING AT THE TOTAL INCOME ON THE BOOK PROFIT S . IT IS NOT THE CASE OF THE ASSESSEE THAT THERE WAS NO BOOK PROFI T NOR ANY MISCALCULATION OR ERROR IN COMPUTING THE BOOK PROFIT U/S 115JB OF THE ACT. T HE TOTAL INCOME ARRIVED AT BY THE AO ON THE BOOK PROFITS WAS HELD TO BE ACCORDING TO THE LAW AND THE SAME WAS, THEREFORE, UPHELD BY THE LD. CIT(A). THEREFORE, IN T HE PRESENT CASE AND AS ON DATE PROVISION OF SECTION 115JB IS VALI D AND THE ADDITIONS HAVE BEEN MADE ACCORDINGLY, WHICH IS THEREBY UPHELD. THERE IS NO INTERIM RELIEF PROVIDED TO THE ASSES SEE BY THE HON'BLE HIGH COURT. 9. FURTHER MORE, READING OF SECTION 158A(3)(2) WITH SECTION 158A(4)(A) OF THE ACT, WE FIND THAT THE MATTER HAS T O BE DISPOSED OF, THEREFORE RESPECTFULLY FOLLOWING THE ORDER OF THE HO N'BLE BOMBAY HIGH COURT, AURANGABAD BENCH AND IN VIEW OF T HE PROVISIONS OF SECTION 158A OF THE ACT, WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS SO RECORDED BY THE LD. CIT( A) AND THE SAME IS UPHELD. IN THE FUTURE, IN CASE OF ANY COURSE OF EVENTS FAVOURABLE TO THE ASSESSEE, HE WILL BE AT LIBERTY TO APP LY FOR RESTORATION OF THESE APPEALS AS PER PROCEDURES LAID DOWN IN LAW. 7 ITA NO. 1168, 1169 & 1170/PUN/2012 KHANDESH BUILDERS LTD. 10. IN THE COMBINED RESULT, THE APPEALS BEARING ITA NO. 1168, 1169 & 1170/PUN/12 ARE DISMISSED. ORDER PRONOUNCED ON 14 TH MARCH, 2019. SD/- SD/- R. S. SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL ME MBER / PUNE; / DATED : 14 TH MARCH, 2019. SPS, DK !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEAL)-II, NASHIK. 4. THE PR. CIT, NASHIK. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE.