ACIT, CHENNAI V. M/s. Shiyam Foundation & Housing Pvt. Ltd., CHENNAI

ITA 1298/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64326 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 07-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB IRS
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Additional evidence
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER ITA NO.1298(MDS)/2011 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE VI(2), CHENNAI. VS. M/S.SHIYAM FOUNDATION & HOUSING PVT. LTD., NO.14, NEW NO.35, VAIDHYARAM ST., T.NAGAR, CHENNAI 600 017. PAN AADCS9923Q. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P JACOB, IRS , ADDL.CIT RESPONDENT BY : DR. ANITA SUMANTH, ADVOCATE DATE OF HEARING : 1 ST OCTOBER, 2012 DATE OF PRONOUNCEMENT : 1 ST OCTOBER, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2008-09. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-V AT CHENNAI, DATED 11-4-2011 AND ARISES OUT OF THE ASSESSMENT CO MPLETED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961. - - ITA 1298 OF 2011 2 2. THE GROUNDS RAISED BY THE REVENUE IN THE PRESEN T APPEAL ARE EXTRACTED BELOW:- 1. THE LD. CIT(A) ERRED IN DELETING THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER U/S 80IB. 2. THE LD. CIT(A) FAILED TO NOTE THAT THE CMDA APPROVAL IS IN THE NAME OF M/S.IAEC INDUSTRIES MADRAS LTD. WHO WERE THE ORIGINAL LANDLORDS AND NOT IN THE NAME OF THE ASSESSEE. 3. THE LD. CIT(A) OUGHT TO HAVE SEEN THAT NO COMPLETION CERTIFICATE WAS PRODUCED EVEN BY 31-12-2010 EVEN THOUGH COL.23(B) OF FORM 10CCB MANDATES PRODUCTION OF COMPLETION CERTIFICATE ON OR BEFORE 9-5-2009. 4. THE LD. CIT(A) FAILED TO CONSIDER THE VARIOUS DEFICIENCIES IN THE AUDIT REPORT POINTED OUT IN DET AIL IN THE ASSESSMENT ORDER IN THE PROPER PERSPECTIVE. 5. THE LD. CIT(A) FAILED TO CONSIDER THE FACT THAT THE ASSESSEE HAS SHOWN SUPER PROFIT AT OVER 40% IN THE - - ITA 1298 OF 2011 3 80IB PROJECT WHILE SHOWING MUCH LOWER PROFIT IN NON 80IB PROJECT. 6. AS REGARDS THE OWNERSHIP, THE LD. CIT(A) OUGHT T O HAVE SEEN M/S.IAEC INDUSTRIES MADRAS LTD. IS THE OWNER OF THE LAND WHO AGREED TO SELL THE ASSESSEE OR THEIR NOMINEE 65% UDS AND THE CONSIDERATION FOR SUCH TRANSFER SHALL BE CONSTRUCTION AND DELIVERY OF BUILT UP AREA OF 35% IN THE FORM OF RESIDENTIAL AND COMMERCIAL AREA IN THE PROPOSED BUILDING. BUT THE OWNER HAS NOT SOLD THE LAND TO THE ASSESSEE AND IT WAS ONLY THE OWNER WHO HAS ACTUALLY SOLD THE UDS OF LAND DIRECTLY TO THE CUSTOMERS, THE ASSESSEE BEING ONLY THE POWER OF ATTORNEY IN THE TRANSACTION . 7. IT IS SUBMITTED THAT THE DECISION IN THE CASE OF ACIT VS. C.RAJINI, ITA NO.1907/MDS/2008, ITAT CHENNAI BENCH AND RADHA DEVELOPERS & OTHERS VS. ITO 113 TTJ (AHD) 308 ARE NOT APPLICABLE TO THE FACTS OF THIS CASE. 8. THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER TOWARDS DIFFERENCE IN - - ITA 1298 OF 2011 4 CONTRACT RECEIPTS TO A SUM OF ` 54,69,838/- AS AGAINST THE ADDITION MADE ON A SUM OF ` 1,20,35,196/-. 9. HAVING OBSERVED THAT THE ASSESSING OFFICER WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND THEREFORE THE AMOUNT THOUGH NOT REALIZED SHOULD ALSO BE ACCOUNTED AS INCOME, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION STATING THAT THE ASSESSEE HAD REALIZED THE AMOUNT SUBSEQUENTLY AND ACCOUNTED FOR THE SAME IN THE SUBSEQUENT YEARS. 10. THE LD. CIT(A) OUGHT TO HAVE SEEN THAT THE INCOME RIGHTLY ASSESSABLE IN THIS YEAR AS PER THE MERCANTILE SYSTEM OF ACCOUNTING CANNOT BE ALLOWED TO BE POSTPONED AS PER THE WISHES OF THE ASSESSEE TO SUBSEQUENT YEAR ON THE BASIS OF REALIZATION. 11. IT IS FURTHER SUBMITTED THAT THE CIT(A) OUGHT T O HAVE GIVEN THE OPPORTUNITY TO THE ASSESSING OFFICER AS PEER RULE 46A WITH REGARD TO THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE FOR THE FIRST TIM E - - ITA 1298 OF 2011 5 BEFORE THE CIT(A) IN RESPECT OF OFFERING OF THE INCOME BY THE ASSESSEE IN THE SUBSEQUENT YEARS BASED UPON REALIZATION. 3. ON HEARING BOTH SIDES, WE ARE OF THE CONSIDERED VIEW THAT THERE IS MATERIAL SUBSTANCE IN THE ARGUME NTS ADVANCED BY THE LEARNED COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENUE THAT MANY OF THE EVIDENCES AND PARTICULARS RELIED ON BY THE ASSESSEE IN THE PRESENT CASE WERE NOT PLACED BE FORE THE ASSESSING OFFICER FOR HIS PERUSAL. WHEN THAT IS TH E CASE, WE FIND THAT IT IS NOT FAIR TO DECIDE THE MATTER ON THE MER ITS OF THE CASE WITHOUT GIVING THE REVENUE AN OPPORTUNITY TO EXAMIN E THE MATERIALS RELIED ON BY THE ASSESSEE. 4. IN THE COURSE OF ARGUMENTS THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE HAS SUBMITTED THAT SIMIL AR ISSUES ARE LIKELY TO BE DECIDED BY THE HONBLE JURISDICTIONAL HIGH COURT, AS CERTAIN CASES ARE RESERVED FOR JUDGMENT BY THEIR LO RDSHIPS AND, THEREFORE, THE TRIBUNAL MAY ADJOURN THE MATTER FOR SOME TIME SO THAT THE APPEAL CAN BE DISPOSED OF IN THE LIGHT OF THOSE JUDICIAL PRONOUNCEMENTS. - - ITA 1298 OF 2011 6 5. THE PROPOSITION MADE BY THE LEARNED COUNSEL IS VERY MUCH ACCEPTABLE PROVIDED QUESTIONS OF LAW ALON E ARE RAISED IN THE PRESENT APPEAL. IN THE PRESENT CASE BEFORE APPLYING THE CORRECT PROVISIONS OF LAW AND CORRECT JUDICIAL PRON OUNCEMENTS, IT IS NECESSARY TO FRAME THE FACTS THEMSELVES. THE FAC TS NEED TO BE EDITED PROPERLY FOR WHICH EVIDENCES ARE ALSO TO BE APPRECIATED. IT IS IN THIS CONTEXT THAT WE FEEL THAT THE NON AVA ILABILITY OF THE RELEVANT MATERIALS BEFORE THE ASSESSING OFFICER HAS DEFINITELY MADE A SOUND GRIEVANCE FOR THE REVENUE. 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE F IND THAT THE MATTER SHOULD GO BACK TO THE ASSESSING OFF ICER TO PASS A FRESH ORDER ON THE ISSUES INVOLVED HEREIN IN THE LI GHT OF THE MATERIALS THAT MAY BE PRODUCED BY THE ASSESSEE AS W ELL AS IN THE LIGHT OF THE JUDICIAL PRONOUNCEMENTS THAT MAY B E MADE BY THE HONBLE JURISDICTIONAL HIGH COURT BY THAT TIME. 7. IN THE RESULT, THIS FILE IS REMITTED BACK TO TH E ASSESSING OFFICER. 8. THE APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. - - ITA 1298 OF 2011 7 ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 1 ST OF OCTOBER, 2012 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 1 ST OCTOBER, 2012. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.