M.Harikishan, Hyderabad V. CIT(A) VI, Hyderabad

ITA 1170/HYD/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5916 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-02-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 16-06-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA SINHA
• Assessee Lawyers: K VASANT KUMAR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMEBR ITA NO.1170/HYD/08 : ASST T. YEAR 2003-04 SHRI M. HARI KISHAN, HYDERABAD. ( PAN - AACHM 0716 K ) V/S. INCOME TAX OFFICER, WARD-9(3), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.VASANT KUMAR RESPONDENT BY : SMT. VASUNDHARA SINHA O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2003- 04 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS REGARDING VALIDITY OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX U NDER S.263 OF THE INCOME-TAX ACT, 1961. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMMISSIONER HAS EXERCISED HIS JURISDICTION UNDER S.263 OF THE ACT AND HAS DIRECTED THE ADDITION ON MANY COUNTS. HE SUBMITTED T HAT THE FIRST ISSUE ON WHICH THE ORDER OF THE ASSESSING OFFICER HAS BEEN SET ASIDE IS WITH REGARD TO THE EXCESS DEPRECIATION ON CAR ALLOWED B Y THE ASSESSING OFFICER. HE SUBMITTED THAT THE ASSESSEE DOES NOT AGI TATE AGAINST THE ORDER OF THE COMMISSIONER PASSED UNDER S.26 3 ON THIS ISSUE. ON THIS COUNT, HE CONCEDED THAT THE COMMISSIONER IS RIGHT IN ITA NO.1170/HYD/08 SHRI M. HARI KISHAN, HYDERABAD. 2 HIS DIRECTIONS TO THE ASSESSING OFFICER. IN VIEW OF THE SUB MISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE, WE FIND THAT NO I NTERFERENCE WITH THE ORDER OF THE COMMISSIONER IS CALLED FOR. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMMISSIONER HAS WRONGLY DIRECTED THE ASSESSING OFFICER TO BRING THE ENTIRE AMOUNT OF RS.23,19,575 TO ASSESSMENT ON ACCOUNT OF RECEIPTS RELATING TO PARIMALA NIVAS. HE SUBMITTED THAT THE COM MISSIONER HAS NOT APPRECIATED THE METHOD OF ACCOUNTING FOLLOWED BY T HE ASSESSEE IN ITS ENTIRETY IN RESPECT OF ACCOUNTING OF RECEIPTS IN RESPE CT OF PARIMALA NIVAS, BEFORE WORKING OUT THE SUPPRESSION OF RECEIPTS. HE SUBMITTED THAT THE ASSESSEE HAS BEEN REGULARLY FOLLOWING 'ADVANCES M ETHOD' FOR THE PURPOSE OF RECOGNIZING REVENUE AND THE SAME SHOULD NOT HAVE BEEN CHANGED TO 'REGISTRATION METHOD' WHEN THE SAME WA S ACCEPTED BY THE ASSESSING OFFICER, AFTER DUE APPLICATION OF MIND. HE SUBMITTED THAT THE ASSESSEE HAS NO OBJECTION IF THE DIRECTION OF THE COMM ISSIONER IN HIS ORDER PASSED UNDER S.263 IS MODIFIED AND THE ASSESSING OFFICER IS DIRECTED TO EXCLUDE THE AMOUNT RECEIVED IN THE FORM OF 'ADVANCES ACCRUED' AND TAXED IN THE EARLIER YEARS AND NOT TO TAX THE SAME AMOUNT AGAIN DURING THE YEAR UNDER CONSIDERATION. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, RELIED ON THE ORDER OF THE COMMISSIONER. SHE SU BMITTED THAT SHE HAS NO OBJECTION IF THE ORDER OF THE COMMISSIONER IS MODIFIED TO THE EXTENT THAT THE ASSESSING OFFICER IS DIRECTED TO GIVE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE AMOUNTS OF ADVANCES TAXED IN T HE EARLIER YEARS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON THIS ISSUE . WE FIND THAT AFTER DISCUSSION ON THE ISSUE, THE COMMISSIO NER IN THE ORDER PASSED UNDER S.263 HAS STRAIGHT AWAY PROCEEDED TO DIRECT THE ITA NO.1170/HYD/08 SHRI M. HARI KISHAN, HYDERABAD. 3 ASSESSING OFFICER TO BRING TO TAX THE ENTIRE AMOUNT OF R S.23,19,575, BEING RECEIPTS RELATING TO PARIMALA NIVAS. WE FIND THA T THE COMMISSIONER HAS NOT CONSIDERED THE PLEA OF THE ASSESSEE TH AT IT IS REGULARLY FOLLOWING 'ADVANCES METHOD' FOR THE PURPOSE OF RECOGNIZING THE REVENUE AND HENCE THE AMOUNTS RECEIVED IN THE FORM OF ADVANCES ACCRUED AND TAXED ALREADY IN THE EARLIER YEARS, SHOULD NOT BE TAXED AGAIN DURING THE YEAR UNDER CONSIDERATION. WE FIND T HAT IT IS WELL SETTLED THAT THE SAME AMOUNT OF INCOME CANNOT BE TAXED TWICE IN THE HANDS OF THE ASSESSEE. IN THESE FACTS OF THE CASE, WE HOLD T HAT THE DIRECTIONS OF THE COMMISSIONER CONTAINED IN HIS ORDER PA SSED UNDER S.263 SHOULD BE MODIFIED TO THE EXTENT THAT THE ASSESSI NG OFFICER IS DIRECTED TO DECIDE THE ISSUE DE NOVO IN ACCORDANCE WITH L AW AND AFTER CONSIDERING THE FACT THAT THE AMOUNTS RECEIVED IN THE FO RM OF ADVANCES, ACCRUED AND ASSESSED ALREADY IN THE EARLIER YEARS, NEED NOT BE TAXED AGAIN DURING THE ASSESSMENT YEAR UNDER CONSIDERA TION, AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSE SSEE. WE DIRECT ACCORDINGLY. 7. THE OTHER ISSUE ON WHICH THE COMMISSIONER HAS DIRECT ED THE ASSESSING OFFICER IN HIS ORDER PASSED UNDER S.263 IS WI TH REGARD TO UNDERSTATEMENT OF RECEIPTS FROM CONTRACTS EXECUTED FOR SHR I N.K.SHAH. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FACTS R ELATING TO THE BUILT UP AREA OF THE BUILDING CONSTRUCTED FOR SHR I N.K.SHAH AND OTHERS ON CONTRACT BASIS, BY THE ASSESSEE WAS NOT CORRECTLY APPRECIATED BY THE COMMISSIONER. HE SUBMITTED THAT THE ASSESSEE IS IN A POSITION TO SHOW THAT THERE IS NO DIFFERENCE IN TH E PLINTH AREA OF THE PROPERTY AND THERE IS NO UNDERSTATEMENT OF RECEIP TS FROM THE CONTRACT EXECUTED FOR N.K.SHAH. HE SUBMITTED THAT THE COMMISSIONER SHOULD HAVE DIRECTED THE ASSESSING OFFICER TO REDECIDE THE ISSUE IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTU NITY OF HEARING ITA NO.1170/HYD/08 SHRI M. HARI KISHAN, HYDERABAD. 4 TO THE ASSESSEE. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, SUBMITTED THAT SHE HAS NO OBJECTION TO THE OPPORT UNITY BEING GIVEN TO THE ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS REGARDING T HE ISSUE OF UNDERSTATEMENT OF RECEIPTS FROM CONTRACT EXECUTED FOR N.K.SHAH. WE FIND THAT THE COMMISSIONER HAS EXCEEDED HIS JURISDICTION IN STRAIGHT WAY DIRECTING THE ASSESSING OFFICE R TO BRING TO TAX THE SUM OF RS.4,90,000 IN THE HANDS OF THE ASSESSEE, INSTEAD OF LEAVING THE MATTER OPEN FOR BEING DECIDED AFRESH BY T HE ASSESSING OFFICER. IN VIEW OF THE PLEADINGS OF THE PARTIES BEFO RE US AND IN THE FACTS OF THE CASE, WE CONSIDER IT REASONABLE TO MODIFY THE DIRECTIONS OF THE COMMISSIONER CONTAINED IN HIS ORDER PASSED UNDER S.2 63 ON THE ISSUE OF UNDERSTATEMENT OF RECEIPTS FROM CONTRACT EXECUTED FOR N.K.SHAH TO THE EXTENT THAT THE ISSUE BE RE-EXAMINED BY THE ASSESSING OFFICER AND THE SAME MAY BE DECIDED AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO TH E ASSESSEE. ASSESSING OFFICER IS FURTHER DIRECTED TO CONFRONT THE ASSESSEE WITH ANY ADVERSE MATERIAL IN HIS POSSESSION REGARDING THE CORRECT ME ASUREMENT OF THE PLINTH AREA OF THE PROPERTY. WE DIRECT ACCORDI NGLY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 5.3.2010 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 5TH MARCH, 2010 ITA NO.1170/HYD/08 SHRI M. HARI KISHAN, HYDERABAD. 5 COPY FORWARDED TO: 1. SHRI M.HARI KISHAN, C/O.B.NARSINGH RAO & CO., CHARTERED ACCOUNTANTS, NO.610, 6TH FLOOR, BABUKHAN EST ATE, BASHEER BAGH, HYDERABAD 500 001. 2. INCOME TAX OFFICER, WARD-9(3), HYDERABAD. 3. COMMISSIONER OF INCOME-TAX-VI, HYDERABAD. 4. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.