ITO 9(1)(1), MUMBAI V. ABODE BUILDERS & DEVELOPERS P.LTD, MUMBAI

ITA 1353/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79183 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 03-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 15-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DEVESH VASAVADA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I B ENCH, MUMBAI , !', % % % % &' . % . () . % . , !' * BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR.S.T.M. PAVALAN, JUDICIAL MEMBER ./ I.T.A. NO.1353/MUM/2011 ( + + + + / ASSESSMENT YEAR :2007-08 THE ITO-9(1)(1), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. ABODE BUILDERS & DEVELOPERS PVT. LTD., 114, VEENA BEENA SHOPPING CENTRE, GURUNANAK ROAD, BANDRA (W), MUMBAI-400 050 ', ./ -. ./ PAN/GIR NO. : AADCA 2191C ( ,/ / APPELLANT ) .. ( 01,/ / RESPONDENT ) ,/ 2 / APPELLANT BY: SHRI SUNIL AGRAWAL 01,/ 3 2 / RESPONDENT BY: SHRI DEVESH VASAVADA 3 4) / DATE OF HEARING :03.07.2014 56+ 3 4) / DATE OF PRONOUNCEMENT :03.07.2014 !7 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-19, MUMBAI DT.25.11.2010 PERTAINING TO A.Y. 2007-08. 2. THE GRIEVANCE OF THE REVENUE READS AS UNDER: ITA NO. 1353/M/2011 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 21,32,202/- WHICH REPRESENTS MAINTENANCE AND OTHER CHARGES RECEIVED BY THE ASSESSEE OVERLOOKING THE FA CT THAT THESE RECEIPTS ARE ASSESSABLE AS INCOME IN THE RELE VANT ASSESSMENT YEAR. 3. THE ASSESSEE IS CARRYING ON THE BUSINESS AS BUIL DERS & DEVELOPERS. THE RETURN FOR THE YEAR WAS FILED ON 31.10.2007 DEC LARING TOTAL INCOME AT RS. NIL. THE RETURN WAS SELECTED FOR SCRUTINY ASSE SSMENT AND STATUTORY NOTICES WERE ACCORDINGLY ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE IS FOLLOWING COMPLETION CONTRACT METHOD FO R DECLARING PROFIT FROM ITS CONSTRUCTION PROJECT WHICH WAS CLAIMED TO BE INCOMPLETE DURING THE YEAR UNDER CONSIDERATION. 3.1. DURING THE COURSE OF THE ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED MAIN TENANCE AND OTHER CHARGES AMOUNTING TO RS. 21,31,202/- FROM OFFICE OC CUPANTS TO WHOM THE POSSESSION OF OFFICE/SHOP IS ALREADY GIVEN IN EARLI ER YEARS. THE AO NOTICED THAT THE ASSESSEE HAS REDUCED THE AMOUNT OF RS. 21,31,202/- FROM WORK-IN-PROGRESS INSTEAD OF OFFERING SUCH AMOUNT AS INCOME OF THE YEAR. THE ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM. IT WA S EXPLAINED THAT SINCE THE ASSESSEE HAS CHARGED THE EXPENDITURE INCURRED B Y IT TO THE CAPITAL WORK-IN-PROGRESS, THE REIMBURSEMENT THEREOF WILL AL SO GO TO REDUCE THE WORK-IN-PROGRESS. THE AO DID NOT ACCEPT THIS VIEW OF THE ASSESSEE AND TREATED MAINTENANCE AND OTHER CHARGES AMOUNTING TO RS. 21,31,202/- UNDER THE HEAD INCOME FROM OTHER SOURCES. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). THE LD. CIT(A) HAS CONSIDERED THIS GRIEVANCE OF THE ASSESSE E QUA GROUND NO. 5 AND 6 BEFORE HIM. THE LD. CIT(A) FOUND THAT SIMILA R ISSUE WAS RAISED IN ASSESSMENT YEAR 2005-06 WHEREIN HIS PREDECESSOR HAS ACCEPTED THE VIEW ITA NO. 1353/M/2011 3 OF THE ASSESSEE AND DIRECTED THE AO TO REDUCE THE W ORK- IN- PROGRESS BY THE AMOUNT OF MAINTENANCE CHARGES RECEIVED BY THE A SSESSEE. THE LD. CIT(A) HAS FOLLOWED THE FINDINGS OF HIS PREDECESSOR AND DIRECTED THE AO ACCORDINGLY. 5. WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 4304/M/2008 FOR A.Y. 2005-06 HAS RESTORED THIS ISSU E TO THE FILE OF THE AO TO FOLLOW THE DIRECTIONS OF THE TRIBUNAL FOR A.Y RS. 2002-03 AND 2003- 04. WE FIND THAT AN IDENTICAL ISSUE WAS BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 4839/MUM/2009 FOR A.Y. 2006-07 WHEREIN THE TRIBUNAL HAS ONCE AGAIN FOLLOWED THE FINDINGS OF TH E CO ORDINATE BENCH FOR A.Y. 2005-06 AND RESTORED THE MATTER TO THE FIL E OF THE AO DIRECTING THE AO TO FOLLOW THE DECISION TAKEN IN A.Y. 2005-06 . AS NO DISTINGUISHING FACT HAS BEEN BROUGHT BEFORE US BY T HE REVENUE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA), WE RESTORE THIS ISSUE TO THE FILE OF THE A O TO DECIDE IT AFRESH IN THE LIGHT OF THE FINDINGS OF A.Y.2005-06. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 3 RD JULY, 2014 [[[[[ . !7 3 6+ 8 9!: 03.07.2014 6 3 ; SD/- SD/- (DR. S.T.M. PAVALAN) (N.K. BILLAIYA) !' /JUDICIAL MEMBER !' / ACCOUNTANT MEMBER MUMBAI; 9! DATED 3 RD JULY, 2014 . . ./ RJ , SR. PS ITA NO. 1353/M/2011 4 !7 !7 !7 !7 3 33 3 04 04 04 04 <+4 <+4 <+4 <+4 / COPY OF THE ORDER FORWARDED TO : 1. ,/ / THE APPELLANT 2. 01,/ / THE RESPONDENT. 3. = ( ) / THE CIT(A)- 4. = / CIT 5. >; 04 , , / DR, ITAT, MUMBAI 6. ;& ? / GUARD FILE. !7 !7 !7 !7 / BY ORDER, 14 04 //TRUE COPY// @ @@ @ / A A A A - - - - (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI