M/s M/s Pink City Apartments Pvt. Ltd., Kolkata V. CIT-I, KOLKATA, Kolkata

ITA 1189/KOL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4965 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 17-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-05-2014
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Assessee Lawyers: OM PRAKASH BAID
• Keywords: Assessment record
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.1189/KOL/2014 ASSESSMENT YEAR: 2009-10 M/S. PINKCITY APARTMENTS PVT. LTD. VS. COMMISSIO NER OF INCOME-TAX, KOL-1. (PAN: AACCP5187G) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 17.02.2016 DATE OF PRONOUNCEMENT: 02.03.2016 FOR THE APPELLANT: SHRI OM PRAKASH BAID, FCA FOR THE RESPONDENT: SHRI G. MALLIKARJUNA, CIT ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER OF CIT-1, KOLKATA VIDE M. NO. CIT,KOL-1,KOL/263/2013-14/10945-47 DATED 31.03.2014 . ASSESSMENT WAS FRAMED BY ITO, WD- 2(1), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2009-10 VIDE HIS ORDER DATED 26.12. 2011. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT REVISING THE ASSESSMENT FRAMED U/S. 143(3) OF THE ACT DATED 26.1 2.2011 U/S. 263 OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PROMOTER DEVELOPER. THE ASSESSEE PRODUCED COMPLETE BOOKS OF ACCOUNT ALONG WITH THE SUPPORTING VOUCHERS I.E. PURCHASE AND SALE VOUCHERS AND ALSO STOCK REGISTERS, SALES REGISTER ALONG WITH DETAILS AND DOCUMENTS EXPLAINING THE RETURNS OF INCOME. ORIGINAL ASSESSMENT WAS COMPLETED U/S. 143 (3) OF THE ACT FOR RELEVANT AY 2009-10. THE CIT(A) AFTER PERUSING AND EXAMINING THE ASSESSM ENT RECORDS ISSUED SHOW CAUSE NOTICE FOR REVISING THE ASSESSMENT U/S. 263 OF THE ACT DATED 0 4.03.2014. THE RELEVANT SHOW CAUSE NOTICE AS REPRODUCED IN THE ORDER OF CIT READS AS UNDER: THE ASSESSEE COMPANY IS A DEVELOPER OF COMMERCIAL BUILDING IN JAIPUR. THE PROFIT AS PER P&L A/C. CONSISTED OF PROFIT ON SALE OF SHOPS AND OFFIC E SPACES, RENT AND OTHER INCOME. DURING THE YEAR THE GROSS PROFIT FROM SALE OF SHOPS/OFFICE SPACE IS ONLY RS. 10,07,803/- ON SALE OF RS. 5,48, 40, 000/ - FOR WHICH STOCK CONSUMED OF RS.5,38,32, 197/- HAS B EEN DEBITED. THE % OF GROSS PROFIT ON IT IS ONLY RS.1.87% ON COST, WHICH IS MUCH LOWER THAN 3.81 % S HOWN LAST YEAR, AS THE SALE DURING THAT YEAR WAS RS.8,86,,66,970/- AND STOCK CONSUMED FOR THAT Y EAR WAS RS.8,54,12,704/-. THE REASONS FOR 2 ITA NO.1189/KOL/2014 PINKCITY APARTMENTS PVT. LTD., AY 2009-10 SUCH LOW PROFIT IN DEVELOPMENT AND SALE OF COMMERCI AL PROPERTY DURING THIS YEAR HAS NOT BEEN ENQUIRED INTO. IT IS ALSO APPARENT FROM THE QUANTIT ATIVE DETAILS GIVEN IN TAX AUDIT REPORT VIS-A-VIS T HE CLOSING STOCK DETAILS AND THE DETAILS OF SALES FILE D THAT OUT OF 96 NO. OFFICES CM, 39 NO. WERE SOLD DURING THE YEAR LEAVING BEHIND 57 NO. IN CLOSING ST OCK WHICH HAS BEEN VALUED AT RS. 5,54, 00, 000/-. ON SUCH AVERAGE COST, THE COST OF 39 UNITS SOLD DU RING THE YEAR WORKS OUT TO RS.3,79,05,260/-. THE COST OF ONE FLAT WHICH WAS IN OPENING STOCK AND SOL D DURING THE YEAR IS RS.27, 00, 000/-. THERE WAS NO OTHER SALES. THEREFORE, THE COST OF STOCK CONSUM ED SHOULD HAVE BEEN RS. 4, 06, 05, 263/-, BUT THE ASSESSEE HAS DEBITED RS. 5,38,32,197/- AS STOCK CON SUMED. THERE MAY BE DIFFERENT SIZES OF OFFICE SPACES. BUT THE DETAILS AND PARTICULARS, INCLUDING AREA/LOCATION ETC., OF OFFICE SPACES SOLD OR REMAINING IN STOCK HAVE NOT BEEN OBTAINED OR EXAMIN ED. SUCH DETAILS AND BREAK UP OF 39 NO. OF OFFICE SPACES REMAINING IN CLOSING STOCK ARE ALSO N OT ON RECORD. THUS THIS IMPORTANT ASPECT HAS NOT BEEN ENQUIRED INTO/INVESTIGATED AT ALL, PARTICULARL Y WHEN THE PROFIT DISCLOSED ON DEVELOPMENT OF COMMERCIAL PROPERTY IS VERY LOW COMPARED TO THE LAS T YEAR. THE REASONS FOR LOWER PROFIT HAVE NOT BEEN ENQUIRED INTO EITHER. THERE IS NO DISCUSSION O N THIS ISSUE. MOREOVER, AS PER COPIES OF LEDGER A/CS. ON RECORD , THERE WERE CASH CREDITS TOTALING RS.29.49 LAKH IN THE NAME OF RAMESHWAR LAL GOEL ON DIFFERENT DATE S, RS.6.50 LAKH IN THE NAME OF MADANLAL KACHLIMAL, HUF ON 23.6.08, AND RS.2 LAKH IN THE NAM E OF MALCHAND PAREEK ON 7.11.2008 IN RESPECT OF CASH RECEIVED FROM THEM DURING THE YEAR. THERE ARE NO NARRATIONS EXCEPT 'CASH RECEIVED'. NO DETAILS OF DOCUMENTS IN THIS RESPECT ARE ON RECO RD. THUS, THE NATURE AND SOURCES OF THESE CASH CREDITS HAVE NOT BEEN EXAMINED OR CONSIDERED. 4. FROM THE ABOVE SHOW CAUSE NOTICE IT IS CLEAR THA T THE CIT WAS OF THE VIEW THAT THE ORDER OF AO IS TO BE REVISED U/S 263 OF THE ACT IN RESPECT T O TWO ASPECTS I.E. THE AO HAS NOT MADE PROPER ENQUIRY/INVESTIGATION IN RESPECT TO SALE CONSIDERAT ION OF SHOPS/OFFICES AND THEIR SIZES. SECONDLY, THE CASH CREDIT TOTALING TO RS.24.49 LAKHS IN THE N AMES OF RAMESHWAR LAL GOEL, MADANLAL KACHLIMAL, HUF AND MALCHAND PAREEK WERE NOT EXAMINE D AND NO DETAILS WERE FILED BY THE ASSESSEE. BUT THE ASSESSEE BEFORE THE CIT FILED COM PLETE DETAILS WHICH WERE FILED BEFORE THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S I.E. THE DETAILS OF SALES EFFECTED SQ. FT. WISE AND DATE WISE ALONG WITH COPY OF SALE AGREEMENTS, B ILLS AND VOUCHERS FOR CONSUMPTION OF RAW MATERIAL, DETAILS OF CASH CREDITS AND RENT AGREEMEN TS AND SHAREHOLDING PATTERN ETC. VIDE LETTER DATED 25.03.2014. THESE DETAILS WERE NEVER EXAMINED BY THE CIT VIS--VIS THE ASSESSMENT RECORD IT IS APPARENT FROM THE REVISION ORDER PASSED BY CI T WHEREIN HE HAS NOTED THE FOLLOWING FACT AS UNDER: FURTHER DETAILS OF SALES EFFECTED- SQ.FT. & DATE WISE, COPY OF SALE AGREEMENTS, BILLS & VOUCHERS FOR CONSUMPTION OF MATERIALS, CASH CREDITS, RENT AGREEM ENTS AND SHAREHOLDING ETC. WERE CALLED FOR MR. O. P. BAID ATTENDED ON 28.3.14 AND FILED LETTER DT. 25.3.14 WHICH CONTAINED DETAILS OF WORK IN PROGRESS DETAILS IN TERMS OF SQ.FT., BILLS & VOUCHE RS OF ADDITIONAL COST, RENT AGREEMENTS, DETAILS 'OF ADVANCES RECEIVED AGAINST AGREEMENT, AND SHAREHOLDI NG DETAILS WERE SUBMITTED. 3 ITA NO.1189/KOL/2014 PINKCITY APARTMENTS PVT. LTD., AY 2009-10 BUT HE FINALLY QUASHED THE ASSESSMENT ORDER AND DIR ECTED THE AO TO COMPLETE THE ASSESSMENT AGAIN EITHER ON LIMITED ISSUE OR DE NOVO, BUT IT IS NOT CLEAR FROM THE ORDER. THE RELEVANT PARA 13 READS AS UNDER: 13. I HAVE GONE THROUGH THE ISSUES ON HAND AND TH E SUBMISSIONS OF THE ASSESSEE COMPANY. THE MAIN ISSUE IS THAT THE AO HAS FAILED TO APPLY HIS M IND TO THE SPECIFIC FACTS OF THE CASE AND HAS NOT SCRUTINIZED/VERIFIED THE DETAILS IN RESPECT OF THE ISSUES RAISED VIDE NOTICE DATE 04.03.2014. THE ORDER PASSED IS, THEREFORE, PART SET ASIDE TO THE F ILE OF A.O. WITH THE DIRECTION THAT THE DETAILED FA CTS SHOULD BE BROUGHT ON RECORD, SCRUTINIZED AND VERIFI ED. THEREAFTER, A DECISION SHOULD BE ARRIVED AT AS PER PROVISIONS AND TO ARRIVE AT A CONCLUSION AS PER I. T. LAW. THE ASSESSMENT IS, THUS, SET ASIDE ON THE LIMITED ISSUE TO BE COMPLETED DE NOVO. AGGRIEVED, ASSESSEE CAME IN APPEAL BEFORE TRIBUNAL. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US, LD. COUNSEL FOR THE ASSESSEE STATED THAT COMPLETE DETAILS IN RESPECT TO SALES EFFECTED OF SHOPS AND OFFICES INCLUDING OTHER DETAILS LIKE SALE AGREEMENTS, BILLS AND VOUCHERS FOR CONSUMPTION OF MATERIAL, CASH CREDIT DETAILS, RENT AGREEMENTS AND SHAREHOLDING PATTERN OF THE ASSESSEE COMPANY WAS COMPLETELY FILED WHICH ARE AVA ILABLE IN THE ASSESSMENT RECORDS. THE AO HAS FRAMED ASSESSMENT AFTER EXAMINING ALL THE DETAI LS AND LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO VERY FIRST PAGE OF THE ASSESSMENT ORDE R THAT AT LEAST TWENTY HEARINGS TOOK PLACE TO EXAMINE THESE DETAILS AND THE ASSESSMENT ORDER IS R UNNING INTO SIX PAGES DISCUSSING EACH AND EVERY FACT. EVEN THE ADVANCES AND LOANS ARE ALSO E XAMINED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE DREW OUR ATTENTION TO T HE ASSESSMENT ORDER AND THE DETAILS FILED BEFORE US IN ITS PAPER BOOK. LD. COUNSEL FOR THE A SSESSEE HAS FILED COMPLETE DETAILS BEFORE THE AO AS IS EVIDENT FROM THE PAPER BOOK FILED BEFORE U S. IN TERM OF THE ABOVE, WE ARE OF THE VIEW THAT THE CIT(A) HAS ONLY INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT FOR REVISION OF ASSESSMENT FRAMED BY AO U/S. 263 OF THE ACT JUST TO VERIFY THE DETAILS AND ACCORDING TO CIT, THESE ARE NOT PROPERLY VERIFIED. IT IS NOT CLEAR W HETHER THE CIT HAS PART SET ASIDE THE ASSESSMENT ORDER OR LIMITED SET ASIDE THE ORDER OR COMPLETE SE T ASIDE. FROM PARA 13 OF CITS ORDER THE FACTS ARE NOT COMING OUT WHETHER THE ASSESSMENT FRAMED BY AO IS ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF REVENUE BECAUSE THE CIT IS COMPLETE LY SILENT ON THIS ASPECT. IN ANY EVENTUALITY, THE INADEQUATE ENQUIRY CARRIED OUT BY AO FOR FRAMIN G ASSESSMENT U/S. 143(3) OF THE ACT CANNOT BE SUBJECT MATTER OF REVISION U/S. 263 OF THE ACT A S IT IS THE OPINION OF THE AO WHICH WILL PREVAIL IN THE ASSESSMENT MATTERS. FOR REVISING THE ASSESS MENT U/S. 263 OF THE ACT, THE CIT HAS TO SHOW THAT THE ORDER OF THE AO IS ERRONEOUS AS WELL AS PR EJUDICIAL TO THE INTEREST OF REVENUE, WHICH IS 4 ITA NO.1189/KOL/2014 PINKCITY APARTMENTS PVT. LTD., AY 2009-10 ABSENT IN THE REVISION ORDER PASSED BY CIT U/S. 263 OF THE ACT. IN TERM OF THE ABOVE, WE HAVE NO HESITATION IN QUASHING THE REVISION ORDER PASSED BY CIT U/S. 263 OF THE ACT. THE APPEAL OF ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.03.2016 SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2ND MARCH, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. PINKCITY APARTMENTS PVT. LTD., 2, ROWLAND ROAD, BLOCK-F, FLAT-GC, KOLKATA-700020 2. RESPONDENT CIT, KOLKATA-1. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .