M/s. Agarwal Developers, Pune V. ACIT, Circle-9, Pune

ITA 1170/PUN/2013

• Counselvise Citation: 117024514 RSA 2013
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1170/PN/2013 (ASSESSMENT YEAR : 2009-10) AGARWAL DEVELOPERS, G.O.82, MANGAL CORNER, OPP : ROTARY CLUB, THERMAX CHOWK, CHINCHWAD, PUNE 411009 .. APPELLANT PAN NO.AALFA8062D VS. ACIT, CIRCLE-9, PUNE .. RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI RAJESH DAMOR DATE OF HEARING : 19-08-2014 DATE OF PRONOUNCEMENT : 21-08-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 08-03-2013 OF THE CIT(A)-V, PUNE RELATING TO ASSESSMENT YEAR 2009-10. 2. DESPITE SERVICE OF NOTICE THROUGH RPAD (ACKNOWLE DGEMENT PLACED ON RECORD) NONE APPEARED ON BEHALF OF THE AS SESSEE. NO APPLICATION SEEKING ADJOURNMENT OF THE CASE HAS BEE N FILED. THEREFORE, THIS CASE IS BEING HEARD ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL RE PRESENTATIVE. 2 3. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN MA KING AN ADDITION OF RS.68,15,902/- ON ACCOUNT OF UNDERSTATEME NT OF SALES, ON THE GROUND THAT REVENUE ON CERTAIN SALES HAS NOT B EEN RECOGNIZED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD.CIT(A) ER RED IN LAW AND ON FACTS IN BRINGING TO TAX THE REVENUE OF RS.68, 15,902/- ON SALES OF RS.1,65,55,507/- WHEN IN FACT THE SALES HAVE AL READY BEEN CONSIDERED IN THE PREVIOUS YEAR RELEVANT TO A.Y. 12-1 3. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL OR ADD TO THE SAME, IF DEEMED NECESSA RY. 3.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED T HAT THE ASSESSEE FIRM IS ENGAGED IN CONSTRUCTION AND BUILDING ACTIVI TY AND HAD NOT OFFERED PROFIT IN RESPECT OF THE FOLLOWING PROPERTI ES EVEN THOUGH AGREEMENTS WERE EXECUTED MUCH EARLIER AND FULL CONS IDERATION WAS RECEIVED IN RESPECT OF THE SAME AS PER THE FOLLOWIN G CHART : SR.NO. NAME OF THE FLAT/SHOP OWNER DATE OF AGREEMENT AMOUNT AS PER AGREEMENT (RS.) AMOUNT ADVANCED (RS.) 1 SHIVRAM KALEKAR 21-05-07 7,35,000 7,35,000 2 VIKAS PALEKAR 21-01-07 5,74,200 6,39,162 3 RAJU PALEKAR 11-01-07 5,49,000 5,95,000 4 NITIN AGARWAL 10-03-08 80,00,000 78,36,082 5 SHAIKH HASSAN 30-11-07 10,30,000 10,38,163 6 NILESH INGALE 18-08-08 31,99,500 31,99,500 7 SANJEEV SHINDE 19-05-06 24,81,600 25,12,600 TOTAL 1,65,66,507 THE ASSESSING OFFICER CONFRONTED THE SAME TO THE AS SESSEE ON THIS ISSUE. THE ASSESSEE SUBMITTED THAT PROFITS WERE NOT OFFERED FOR TAXATION AS POSSESSION WAS NOT GIVEN IN RESPECT OF ABOVE PROPERTIES. HOWEVER, THE ASSESSING OFFICER REJECTED THE ABOVE S UBMISSION OF THE ASSESSEE ON THE GROUND THAT DESPITE AGREEMENTS WERE EXECUTED MUCH EARLIER AND FULL CONSIDERATION RECEIVED EVEN T HEN THE PROFIT 3 WAS NOT OFFERED. THE ASSESSING OFFICER ALSO FOUND T HAT IN CASE OF ONE PARTY I.E. MOMTARAMJI PUROHIT, PROFIT WAS OFFER ED IN RESPECT OF SALE OF GODOWN EVEN THOUGH FULL CONSIDERATION WAS N OT RECEIVED AND RS.4,20,000/- WAS SHOWN AS OUTSTANDING. THE ASS ESSING OFFICER ALSO MADE ENQUIRY IN THE CASE OF SHRI NITIN AGARWAL, APPEARING AT SR. NO. 4 OF THE ABOVE CHART AND FOUND THAT CONTRARY TO THE CLAIM MADE BY THE ASSESSEE, POSSESSION WAS ALRE ADY GIVEN TO SHRI NITIN AGARWAL WHO HAD NOT ONLY TAKEN POSSESSIO N OF THE GODOWN BUT HAD GONE ONE STEP AHEAD IN LETTING OUT T HE PROPERTY TO 3 RD PARTY FROM WHICH HE HAD SHOWN RENTAL INCOME TOO. ACCORDINGLY, THE ASSESSING OFFICER CAME TO THE CONC LUSION THAT THE ASSESSEE WAS TRYING TO DEFER THE PAYMENT OF TAX BY CLAIMING THAT PROFIT IS TO BE OFFERED AFTER POSSESSION IS GIVEN. APPLYING 41.17% GROSS PROFIT ON THE TOTAL VALUE OF RS.1,65,55,507/- THE AO MADE ADDITION OF RS.68,15,902/-. 4. IN APPEAL THE LD.CIT(A) DISMISSED THE APPEAL FIL ED BY THE ASSESSEE BY OBSERVING AS UNDER : 8. AFTER GOING THROUGH THE SUBMISSIONS OF THE APPELLAN T, IT IS SEEN THAT BY NOT OFFERING PROFIT IN RESPECT OF ABOVE PROPERTIES, THE APPELLANT FIRM HAS TRIED TO DEFER PAYMENT TO TAX. I N A PROJECT WHERE INCOME IS OFFERED ON THE BASIS OF PROJECT COMPL ETION METHOD, INCOME IS OFFERED WHEN THE PROJECT IS COMPLET E AND NOT WHEN THE POSSESSION IS GIVEN WHICH IS BASICALLY A TECHNICA L FORMALITY. IN THIS CASE, IT IS ALSO SEEN THAT THE APPE LLANT FIRMS CONTENTION THAT POSSESSION IN CASE OF SHRI NITIN AGARWA L WAS NOT GIVEN WAS FOUND TO BE INCORRECT AS SHRI NITIN AGARWAL HAD NOT ONLY TAKEN POSSESSION BUT HAD ALSO RENTED THE PROPERTY FURTHE R. THE APPELLANT CLAIMS THAT INCOME IN RESPECT OF 7 PROPERTI ES HAS BEEN OFFERED IN SUBSEQUENT YEARS AND THEREFORE APPROPRIATE RELIEF IN THOSE YEARS SHOULD BE GIVEN, IT IS FOR THE APPELLANT TO FILE REVISED RETURN CLAIM APPROPRIATE RELIEF. AS FAR AS FACTS OF T HIS CASE IN THE PRESENT YEAR ARE MENTIONED, IT IS CLEAR THAT THE PROJ ECT IS COMPLETE AND THEREFORE THE APPELLANT FIRM WAS SUPPOSED TO OFFER PROFIT IN RESPECT OF SEVEN PROPERTIES WHICH IT HAS TRIED TO DEFER . 4 THEREFORE, ACTION OF THE ASSESSING OFFICER IN MAKING AD DITION OF RS.68,15,902/- IN RESPECT OF PROFIT OF 7 PROPERTIES IS UPHELD AND THE GROUND IS DISMISSED. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE DETAILS FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS AS WELL AS APPEAL PROCEEDINGS, WE FIND EVEN AFTER RECEIVING THE FULL AMOUNTS TOWARDS SALE PROCEEDS AS PER THE AGREEMENT, THE ASSESSEE HAS NOT SHOWN THE INCOME BY OFFERING THE PROFIT TO TAX IN THE IMPUGNED ASSESSMENT YEAR AND H AS TRIED TO DEFER THE SAME TO THE SUBSEQUENT YEAR WHICH SUITS IT. TH E CONTENTION OF THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT POSS ESSION WAS NOT GIVEN IN SOME OF THE FLATS WAS DEMOLISHED BY THE AS SESSING OFFICER BY BRINGING ON RECORD THAT NOT ONLY POSSESSIONS WER E GIVEN TO THE RESPECTIVE BUYERS BUT EVEN THE BUYER IN ONE CASE HA S STARTED GETTING RENTAL INCOME FROM THE GODOWNS. THEREFORE, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) UPHOLDING THE ACTION OF THE ASSESSING OFFICER. MERELY BECAUSE THE ASSESSEE HAS DECLARED THE SALES DURING THE A.Y. 2012-13 CANNOT BE A GROUND FO R NOT BRINGING THE INCOME TO TAX IN THE YEAR IN WHICH THE PROJECT HAS BEEN COMPLETED AND POSSESSION GIVEN AFTER RECEIVING FULL AMOUNT. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF THE CIT(A) AND ACCORDINGLY UPHOLD THE SAME. THE GR OUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 5 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21-08-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 21 ST AUGUST, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-V, PUNE 4. THE CIT-V, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, P UNE BENCHES, PUNE