ACIT, New Delhi V. M/s Sheetal International Pvt. Ltd, New Delhi

ITA 127/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9768 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 08-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.127/DEL/2016 ASSESSMENT YEAR: 2010-11 ACIT CENTRAL CIRCLE-26, ROOM NO.323, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTEN, NEW DELHI VS SHEETAL INTERNATIONAL PVT. LTD. G-81/A, 2 ND FLOOR, VIJAY CHOWK, LAXMI NAGAR, NEW DELHI PAN NO. AAACS3368N (APPELLANT) (RESPONDENT) APPELLANT BY MS. RINKU SINGH, SR. DR RESPONDENT BY NONE DATE OF HEARING: 01/07/2019 DATE OF PRONOUNCEMENT: 02/07/2019 ORDER PER N. K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE CIT(A)-1, NEW DELHI DATED 16.10.2015 PERTAINING TO A. Y. 2010-11. 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READ :- 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,28,2 8,990/- MADE BY THE AO ON ACCOUNT OF EXCESS CLAIM OF DEDUCTION/EXEMPTION U/S 86 WITHO UT APPRECIATING THE FACT THAT THE M/S MAYFIELD PROJECTS (AOP) HAS MENTIONED IN ITS RE TURN OF INCOME AND TAX AUDIT REPORT (FORM NO. 3CD) FOR THE A. Y. 2010-11 THAT AS SESSEE COMPANY IS HAVING SHARE OF 42.284%. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW 2 AND ON FACTS IN DELETING THE ADDITION OF RS. 1,28,2 8,990/- BY HOLDING THAT THE ASSESSEE HAS MENTIONED ONLY ONE PROFIT SHARING RATIOS IN THE E-FILED RETURN AS THE SYSTEM ACCEPTS ONLY ONE RATIO WITHOUT APPRECIATING THE FACT THAT E VEN IN THE TAX AUDIT REPORT (FORM NO. 3CD) OF M/S MAYFIELD PROJECTS ONLY ONE PROFIT SHARI NG RATIOS IS MENTIONED. 3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,28,2 8,990/- WITHOUT CONSIDERING OR REBUTTING THE JUDGEMENTS GIVEN BY HIS PREDECESSOR I N THE CASE OF ASSESSEE FOR THE A.Y. 2006-07 TO 2009- 10 ON IDENTICAL ISSUE, WHEREIN THE LD. CIT(A) HAD REJECTED THE CLAIM OF THE ASSESSEE REGARDING HAVING TWO DIFFERENT PROF IT SHARING RATIOS FOR TWO DIFFERENT PROJECTS, DESPITE THE FACT THAT IT WAS MENTIONED IN THE ASSESSMENT ORDER. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,8 4,000/- WITHOUT APPRECIATING THE FACT THAT THE ONUS WAS ON THE ASSESSEE TO ESTABLISH THAT THE ABOVE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS U/S 37(1) WHICH THE ASSESSEE FAILED TO ESTABLISH. 3. THE ELEMENTS IN GROUND NO.1 TO 3 RELATE TO THE S AME ISSUE. 4. THE ASSESSEE IS A MEMBER OF AOP I.E. M/S. MAYFIE LD PROJECTS. WHILE SCRUTINIZING THE RETURN OF INCOME THE ASSESSI NG OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED EXEMPTION OF ITS INCOME U/S. 86 OF THE ACT FROM THE AOP TO THE TUNE OF RS.2 1639161/-. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IS HAVING SHARE FROM AOP @ 42.284% WHEREAS THE PROFITS DECLARED FRO M THE AOP WAS ON A HIGHER SIDE. THE ASSESSEE WAS ASKED TO EX PLAIN THE SAME. IN ITS REPLY THE ASSESSEE EXPLAINED THAT THE AOP IS HAVING TWO TYPE OF LAND IN RESPECT OF TWO PROJECTS AND THE SHARE AGREEMENT IS DIFFERENT FOR BOTH THE PROJECTS. IT WA S FURTHER EXPLAINED THAT THE AOP HAS DISTRIBUTED AMONGST THE MEMBERS THEIR RESPECTIVE SHARES OF PROFIT IN THE RATIO MENT IONED IN THE AOP AGREEMENT FOR BOTH THE PROJECTS. 5. THE REPLY OF THE ASSESSEE DID NOT FIND ANY FAVOU R WITH THE ASSESSING OFFICER WHO WAS OF THE FIRM BELIEF THAT T HE PROFIT SHARE OF THE ASSESSEE HAS BEEN DETERMINED @ 42.284% AND H AS ATTAINED 3 FINALITY IN PREVIOUS ASSESSMENT YEARS I.E. A.Y.2006 -07 TO 2009-10. THE ASSESSING OFFICER ACCORDINGLY TREATED THE SHARE OF ASSESSEE AT RS.93,98,797/- AND THE AMOUNT OF RS.12,82,990/- WAS TREATED AS INCOME FROM OTHER SOURCES. 6. THE ASSESSEE STRONGLY AGITATED THE MATTER BEFORE THE CIT(A) AND FILED COPY OF REVENUE DISTRIBUTION ACCOUNT OF M /S. MAYFIELD PROJECTS EXPLAINING THE REVENUE SHARING RATIO OF TH E DIFFERENT MEMBERS OF M/S. MAYFIELD PROJECTS IN THE TWO PROJEC TS AS UNDER :- 7. IT WAS EXPLAINED THAT THE SHARES OF THE MEMBERS OF THE AOP WAS BASED ON THE ADDENDUM TO AGREEMENT FOR JOINT DE VELOPMENT AGREEMENT. IT WAS EXPLAINED THAT THE ASSESSEE WAS HAVING SHARE OF REVENUE AT THE RATE OF 42.284% IN ONE OF THE PRO JECT AND 48.803% IN SECTION PROJECT. IT WAS FURTHER EXPLAIN ED THAT IN THE ASSESSMENT OF THE AOP THE SHARE OF THE ASSESSEE HAS BEEN ACCEPTED AT THE RATE OF 42.284% AND 48.803% FOR BOT H THE PROJECTS. THE ASSESSEE ALSO FILED A STATEMENT OF RE VENUE DISTRIBUTION BY THE AOP TO SUBSTANTIATE ITS CLAIM O F HAVING 4 RECEIVED SHARE OF REVENUE FROM BOTH THE PROJECTS AT RS.21639161/-. THE ASSESSEE STRONGLY CONTENDED THA T THE SHARE PROFIT OF RS.21639161/- IS ELIGIBLE FOR EXEMPTION U /S. 86 OF THE ACT. 8. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND AFTER GOING THROUGH THE ASSESSMENT OF THE AOP AND CONSIDE RING THE STATEMENT OF REVENUE DISTRIBUTION THE CIT(A) OBSERV ED THAT THE SHARE OF REVENUE OF MEMBERS DETERMINED BY AOP CANNO T BE DISTURBED BY THE ASSESSING OFFICER IN INDIVIDUAL AS SESSMENT OF THE AOP MEMBER WITHOUT BRINGING ANY ADVANCE MATERIAL ON RECORD. THE CIT(A) CONCLUDED BY HOLDING THAT AS PER THE REV ENUE DISTRIBUTION CERTIFICATE ISSUED BY THE AOP THE SHAR E OF THE REVENUE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION CO MES TO RS.21639161/- AND THE SAME IS ELIGIBLE FOR EXEMPTIO N U/S 86 OF THE ACT. 9. AGGRIEVED BY THIS THE REVENUE IS BEFORE US. 10. THE DR READ THE OPERATIVE PART OF THE ASSESSMEN T ORDER AND PLACED STRONG RELIANCE ON THE FINDINGS OF THE ASSES SING OFFICER. 11. SINCE, NONE APPEARED ON BEHALF OF THE ASSESSEE AND HAVING HEARD THE DR, WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE AO P WAS HAVING TWO PROJECTS ON LAND MEASURING 307.950 ACRES AND 23 .896 ACRES. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE WAS HAV ING REVENUE SHARE AT THE RATE OF 42.284% IN THE PROJECT ON LAND MEASURING 307.950 ACRES AND 48,803% IN THE LAND MEASURING 23. 896 ACRES. THE STATEMENT OF REVENUE DISTRIBUTION BY THE AOP M/ S. MAYFIELD PROJECT IS AS UNDER :- 5 6 12. THE CIT(A) HAS GIVEN A CATEGORICALLY FINDING TH AT AS PER THE ASSESSMENT ORDER IN THE CASE OF AOP THE SHARE OF TH E ASSESSEE HAS BEEN ACCEPTED @ 42,284% AND 48.803% FOR BOTH TH E PROJECTS. THE CIT(A) ALSO CATEGORICALLY HELD THAT THE ASSESSM ENT ORDER AS WELL AS THE ORDER OF THE CIT(A) IN THE CASE OF AOP HAS BEEN CONSIDERED BY HIM AND THE REVENUE SHARING RATIO FOR BOTH THE PROJECTS HAVE BEEN ACCEPTED. 13. A PERUSAL OF THE REVENUE DISTRIBUTION BY THE AO P CLEARLY SHOW THAT THE SHARE OF REVENUE OF THE ASSESSEE FROM BOTH THE PROJECTS IS RS.21639161/-. SINCE THIS SHARE HAS BE EN DISTRIBUTED BY THE AOP WHICH HAS BEEN ACCEPTED IN THE ASSESSMEN T OF THE AOP THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S. 86 OF THE ACT IN RESPECT OF THIS SHARE OF PROFIT OF RS.21639161/-. 14. CONSIDERING THE FACTS IN TOTALITY WE DO NOT FIN D ANY REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(A). 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7 ORDER PRONOUNCED IN THE OPEN COURT ON 02.07.2019. SD/- SD/- (SUCHITRA KAMBLE) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNT ANT MEMBER *NEHA* DATE:- 02.07.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI DATE OF DICTATION 01.07.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 01.07.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 02.07.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER