RAVI REAL ESTATE DEV. P. LTD, MUMBAI V. ITO WD 9(3)-4, MUMBAI

ITA 1230/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7365 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 24-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T T JACOB
• Assessee Lawyers: HARI S RAHEJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1230/MUM/2009 (ASSESSMENT YEAR: 2003-04) M/S. RAVI REAL ESTATE DEV. P. LTD. INCOME TAX OFFIC ER - 9(3)(4) LAXMI PALACE, 76, MATHURADAS AAYAKAER BAVAN ROAD, KANDIVALI (W) VS. MUMBAI 400020 MUMBAI 400067 PAN - AAACR 2191 Q APPELLANT RESPONDENT APPELLANT BY: SHRI HARI S. RAHEJA RESPONDENT BY: SHRI T.T. JACOB O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- CENTRAL I, MUMBAI DATED 31.12.2008. 2. THE ASSESSEE HAS RAISED THE FOLLOWING TWO GROUNDS: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (A) ERRE D IN CONFIRMING ACTION OF THE ASSESSING OFFICER WHILE GIVING EFFECT TO THE CIT(A) ORDER FOR ESTIMATION OF PROFIT OF RS.88,99,326/- ON ADVAN CE @ 12% WITHOUT ALLOWING DEDUCTION OF AMOUNT REFUNDED BACK ON CANCE LLATION OR OTHERWISE ON THE GROUND/S AS CONTAINED IN THE APPEL LATE ORDER OR OTHERWISE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (A) ERRED IN HOLDING THAT AMOUNT REFUNDED DURING THE YEAR UNDER APPEAL CAN ON LY BE REDUCED WHEREAS THE DIRECTION OF THE CIT(A) PASSING THE EAR LIER ORDER HAS NOT GIVEN ANY SUCH DIRECTION TO RESTRICT THE REDUCTION IN RESPECT OF AMOUNT REFUNDED FOR CANCELLATION OF FLATS FOR THE Y EAR UNDER CONSIDERATION. 3. BRIEFLY STATED THE A.O., WHILE COMPLETING THE ASSES SMENT FOR THE ASSESSMENT YEAR, REJECTED THE ACCOUNTS OF THE ASSES SEE AND ESTIMATED THE PROFIT BY APPLYING NET PROFIT RATE AT 12% OF TOTAL ADVANCES AS SHOWN IN THE BOOKS OF ACCOUNT. WHEN THE ASSESSEE PREFERRED THE A PPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ACTION OF ESTIMATION OF IN COME BUT GAVE A DIRECTION ITA NO. 1230/MUM/2009 M/S. RAVI REAL ESTATE DEV. P. LTD. 2 TO VERIFY ASSESSEES CLAIM IN RESPECT OF REFUND GIV EN AGAINST CANCELLATION OF FLATS AND ACCORDINGLY DIRECTED TO REDUCE THE AMOUNT SO REFUNDED BEFORE APPLYING THE NET PROFIT. THE A.O., WHILE IMPLEMENTI NG THE DIRECTION OF THE CIT(A), HAS NOT GIVEN CREDIT FOR THE REFUND ISSUED IN LATER YEARS AND THE ACTION OF THE A.O. WAS CONFIRMED BY THE CIT(A) IN T HIS ORDER WHICH IS CONTESTED. THE ASSESSEE HAS RAISED THE GROUNDS ACCO RDINGLY. IN THE MEANTIME ON THE APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) CONFIRMING THE ESTIMATION OF INCOME AFTER REJECTING THE BOOKS ACCOUNT AND THE AMOUNT @ PROFIT, THE ITAT IN ITA NO. 2268/MUM/2 007 HAD SET ASIDE THE ORDER ON THE ISSUE. 4. IT WAS THE LEARNED COUNSELS CONTENTION THAT THE OR DER OF THE ITAT HAVE NOT BEEN GIVEN EFFECT TO AND SINCE THE FACTS ARE EX TRACTED WITH REFERENCE TO ESTIMATION OF PROFIT FROM PARA 9 TO 12 IN THE SAID ORDER, THE A.O. MAY BE DIRECTED TO GIVE EFFECT TO THE ORDER OF THE ITAT. I T IS FURTHER SUBMITTED THAT THE A.O. SHOULD BE DIRECTED TO CONSIDER THE REFUNDS ARISING OUT OF NON- IMPLEMENTATION OF PROJECT AS CONTESTED ORIGINALLY A ND AS DIRECTED BY THE CIT(A). 5. THE LEARNED D.R. RELIED ON THE ORDERS OF THE A.O. A ND THE CIT(A). 6. WE HAVE CONSIDERED THE ISSUE. THE ISSUE OF ESTIMATI ON AS WELL AS QUANTUM FOR ESTIMATION HAS BEEN CONTESTED BY THE AS SESSEE ON THE ORDER OF THE CIT(A) DATED 21.12.2006 AND IN THE ABOVE REFERR ED ITAT ORDER IN ITA NO. 2268/MUM/2007 THE FACTS ARE CONSIDERED AND DIRECTIO NS AND OBSERVATIONS WERE GIVEN FROM PARA 9 TO 12. IT IS VERY SPECIFICAL LY OBSERVED IN PARA 11 THAT THE ASSESSEE SHOULD GET RELIEF ON ITEM NOS. I TO IV WHILE ESTIMATING THE INCOME IN DETERMINING QUANTUM OF RECEIPTS. SINCE TH ESE ORDERS OF THE A.O. AND CIT(A) HAVE BEEN PASSED PRIOR TO THE ORDER OF T HE ITAT IN THE FIRST ROUND OF APPEAL, IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF THE A.O. AND CIT(A) ON THIS ISSUE AND DIRECT THE A.O. TO IMPLEME NT THE CIT(A)S DIRECTIONS GIVEN VIDE ORDER DATED 21.12.2006 KEEPING IN VIEW T HE OBSERVATIONS AND DIRECTIONS MENTIONED IN THE ABOVE REFERRED ITAT ORD ER. THE GROUNDS ARE CONSIDERED ALLOWED. ITA NO. 1230/MUM/2009 M/S. RAVI REAL ESTATE DEV. P. LTD. 3 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH 2010. SD/- SD/- (R.K. GUPTA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 18 TH MARCH 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CENTRAL I, MUMBAI 4. THE CIT CENTRAL I, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.