Bengal United Credit Belani Housing Limited, Kolkata V. ITO, Ward-12(3),Kolkata, Kolkata

ITA 155/KOL/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1507 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 31-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOULEAN HANGSHING
• Assessee Lawyers: D S DAMLE
• Keywords: Opportunity of being heard; Assessment record
• Section: 143(3); 142(1); 115JB; 80IB; 133(6); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM] I.T.A NO. 155/KOL/201 7 ASSESSMENT YEAR : 2012-1 3 BENGAL UNITED CREDIT BELANI HOUSING LIMITED -VS.- C.I.T., KOLKATA-4, KOLKATA KOLKATA [PAN : AACCB 3444 N] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI D.S.D AMLE, AR FOR THE RESPONDENT : SHRI GOULEAN HANGSHI NG, CIT(DR) DATE OF HEARING : 25.07.2017. DATE OF PRONOUNCEMENT : 31.07.2017. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 26.12.2016 OF PR. C.I.T., KOLKATA-4, KOLKATA PASSED U/S 263 OF THE I NCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR A.Y.2012-13. 2. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN RE AL ESTATE BUSINESS. FOR A.Y.2012-13 THE ASSESSEE FILED RETURN OF INCOME ON 23.09.2012 S HOWING TOTAL INCOME OF RS.39,290/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT ON 0 2.01.2014. LATER ON AN ORDER OF ASSESSMENT U/S 143(3) OF THE ACT WAS PASSED ON 04.0 3.2015. THE ASSESSMENT WAS COMPLETED BY APPLYING THE PROVISIONS OF SECTION 115 JB OF THE ACT (MINIMUM ALTERNATE TAX) ON A BOOK PROFIT OF RS.1,21,24,731/- ON WHICH TAX LIABILITY OF THE ASSESSEE WAS RS.24,25,890/-. 3. BEFORE COMPLETING THE ASSESSMENT U/S 143(3) OF THE ACT THE AO HAD ISSUED A NOTICE U/S 143(2) AND 142(1) OF THE ACT DATED 07.08.2013 I N WHICH THE AO HAD CALLED UPON THE ASSESSEE TO FURNISH THE FOLLOWING DETAILS :- 2 ITA NO.155/KOL/2017 BENGAL UNITED CREDIT BELANI HOUSING LIMITED A.YR.2012-13 2 PARTICULARS OF ACCOUNTS AND/OR DOCUMENTS REQUIRED : 1. REASONABLY DETAILED NOTE ON THE NATURE OF BUSINESS INCLUDING DETAILS OF ADDRESSES, PHONE NUMBER OF ALL PREMISES OFFICE, BRANCH, GODO WN, WORKSHOP ETC. 2. COMPLETE SET OF AUDITED ACCOUNTS, TAX AUDIT REPORT U/S 44AB WITH ALL SCHEDULES,, COMPUTATION OF INCOME AND INCOME TAX AN D HARD COPIES OF RETURNS. 3. ANY OTHER DETAILS AND/OR DOCUMENTS FOR THE PURPOSE OF ASSESSMENT. PLEASE FURNISH ALL THE ABOVE DETAILS ALONG WITH A C OVERING LETTER, MENTIONING ALL POINTS . 4. THE AO ISSUED NOTICES U/S 142(1) OF THE ACT DATE D 07.05.2014 AND 17.06.2014 IN WHICH THE AO HAD CALLED FOR SEVERAL DETAILS INCLUDI NG THE DETAILS OF ADVANCE RECEIVED FROM THE CUSTOMERS. THE ASSESSEE GAVE THE FOLLOWING DETAILS AS DEMANDED BY THE AO IN HIS SUBMISSIONS DATED 03.09.2014 FURNISHED BEFORE T HE AO:- NAME OF THE TOWER ANNEXURE AMOUNT CYPRESS ANNEXURE (I) 1,054,019,234 CONIFER ANNEXURE (II) 159,005,451 BEACH ANNEXURE (III) 21,506,706 SUB TOTAL WILLOWS 1,234,531,391 BIRCH ANNEXURE (IV) 10,668,769 HAZEL ANNEXURE (V) 658,775 MAPLE ANNEXURE (VI) 5,076,749 OAK ANNEXURE (VII) 105,400 SUB TOTAL WOODS 16,509,693 SUNDRY DEBTORS FROM CUSTOMER (125,836,967) TOTAL ADVANCE RECEIVED 1,125,204,116 DETAILED ANNEXURES IN SUPPORT OF THE ABOVE ADVANCE S GIVING NAMES OF EACH PARTY WAS ALSO GIVEN BY THE ASSESSEE AND THESE DOCUMENTS ARE AT PAGES 45 TO 77 OF THE ASSESSEES PAPER BOOK. 5.THE ASSESSEE ALSO CLAIMED DEDUCTION U/S 80IB OF T HE ACT IN RESPECT OF PROFITS FROM HOUSING PROJECTS. THE ASSESSEE HAD CLAIMED DEDUCTIO N OF A SUM OF RS.83,66,321/- IN RESPECT OF PROFITS FROM HOUSING PROJECT AND HIGHLAN D WOODS. THE ASSESSEE FILED THE TAX 3 ITA NO.155/KOL/2017 BENGAL UNITED CREDIT BELANI HOUSING LIMITED A.YR.2012-13 3 AUDIT REPORT U/S 44AB OF THE ACT IN FORM NO.3CA ALO NG WITH THE PARTICULARS AND ALSO FURNISHED FORM NO.3CD. IN RESPECT OF DEDUCTION CLAI MED U/S 80IB(10) OF THE ACT THE ASSESSEE ALSO GAVE THE AUDIT REPORT IN FORM NO.10CC B AND GAVE THE BASIS ON WHICH DEDUCTION U/S 80IB WAS CLAIMED BY THE ASSESSEE. 6. IN THE ORDER OF ASSESSMENT U/S 143(3) OF THE ACT THE AO HAS SPECIFICALLY OBSERVED AS FOLLOWS ON THE DEDUCTION U/S 80IB(10) OF THE ACT :- 2. DURING THE YEAR, THE ASSESSEE COMPANY IS ENGAG ED IN REAL ESTATE BUSINESS. THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80IB O F THE ACT OF RS.83,66,321/- WHICH WAS DULY VERIFIED. 7. IN PARA-3 THE AO HAS ALSO OBSERVED THAT THE AS SESSEE HAD FILED ALL THE DETAILS IN SUPPORT OF THE RETURN WHICH WAS TEST CHECKED AND PL ACED ON RECORD. 8. THE CIT IN EXERCISE OF HIS POWERS U/S 263 OF THE ACT WAS OF THE VIEW THAT ORDER OF AO PASSED U/S 143(3) OF THE ACT DATED 04.03.2015 WA S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE FOLLOWING REASONS : - 2. ON EXAMINATION OF RECORDS, IT IS SEEN THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IB(10) AMOUNTING TO RS. 83,66,321/-. THE ASSE SSEE HAD NEITHER SUBMITTED MANDATORY FORM NO. 10CCB AS PER I. T. RULES 1962 DU RING ASSESSMENT PROCEEDINGS NOR' IT HAD BEEN SUBMITTED BEFORE THE C OMPLETION OF ASSESSMENT. THE A.O. HAS ALSO NOT ASKED TO SUBMIT THE SAID FORM. TH E A.O. ALLOWED THE DEDUCTION U/S 80IB(10) WITHOUT EXAMINATION OF ALL THE CONDITI ONS PRESCRIBED BY THE SECTION WERE SATISFIED OR NOT. NO QUERIES HAD BEEN RAISED B Y THE AO AT THE ASSESSMENT STAGE WITH REGARD TO THE CALCULATION OF THE DEDUCTION U/S 80IB(10). 3. THE CASE RECORD OF THE ASSESSEE FURTHER REVEALED THAT DURING THE YEAR AS PER NOTE 2.8 OF BALANCE SHEET THE ASSESSEE HAS RECEIVED AN A MOUNT OF RS. 38,04,12,195/-, TOTALLING OF RS.1,12,52,04,116/- AS ON DATE 31.03.2 012 ON ACCOUNT OF ADVANCE FROM THE CUSTOMERS. ON PERUSAL OF THE ASSESSMENT RECORD IT HAS BEEN FOUND THAT THE AO HAS NOT EXAMINED THIS FACT BY ISSUING EITHER NOTICE U/S 133(6) OR MAKING ANY ENQUIRY. 4. IN LIGHT OF THE ABOVE, I AM SATISFIED THAT PRIMA FACIE THE ORDER DATED 04.032015 PASSED U/S 143(3) OF E INCOME TAX ACT, 1961 IS ERRO NEOUS .AND PREJUDICIAL TO THE INTERESTS OF THE REVENUES. 4 ITA NO.155/KOL/2017 BENGAL UNITED CREDIT BELANI HOUSING LIMITED A.YR.2012-13 4 9. IN RESPONSE TO THE AFORESAID SHOW CAUSE NOTIC E THE ASSESSEE FILED A REPLY IN WHICH THE ASSESSEE BROUGHT TO THE NOTICE OF CIT THAT THE ASSESSEES TAX LIABILITY WAS DETERMINED UNDER SECTION 115JB OF THE ACT, WHEREBY MINIMUM ALTERNATE TAX ('MAT') (INCLUDING SURCHARGE AND EDUCATION CESS) ON ADJUSTE D BOOK PROFIT WAS COMPUTED AT RS 2,425,890. THE ASSESSEE HAS FURNISHED THE FORM 10C CB (COPY RE-ENCLOSED AS ANNEXURE 2 FOR YOUR REFERENCE) AND COMPLETE DETAILS RELATING TO ADVANCE FROM CUSTOMERS BEFORE THE LEARNED ASSESSING OFFICER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE DEDUCTION OF RS 8,366,321 CLAIMED BY THE ASSESSEE U NDER SECTION 80IB OF THE ACT WAS GRANTED BY THE LEARNED ASSESSING OFFICER AFTER DUE VERIFICATION. THE DETAILS OF ADVANCES WERE ALSO DULY VERIFIED BY THE AO. 10. THE CIT, WITHOUT DISCUSSING AS TO HOW THE O RDER OF AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE IN THE L IGHT OF THE REPLY TO THE SHOW CAUSE NOTICE GIVEN BY THE ASSESSEE, SET ASIDE THE ORDER O F AO WITH THE DIRECTION TO EXAMINE AND VERIFY THE ISSUES SET OUT BY CIT IN THE SHOW CA USE NOTICE U/S 263 OF THE ACT. THE FOLLOWING WERE THE RELEVANT OBSERVATIONS OF CIT :- 4. IN VIEW OF THE ABOVE FACTS, THE ORDER DATED 04 .03.2015 PASSED U/S 143(3) OF THE I.T ACT STANDS ERRONEOUS SO FAR AS PREJUDICIAL TO T HE INTEREST OF REVENUE AND THEREFORE, A NOTICE U/S 263 OF THE I.T ACT, 1961 WA S ISSUED TO THE ASSESSEE COMPANY ON 30-09-2015 FIXING THE DATE OF HEARING ON 09-10-2 015. HOWEVER NO COMPLIANCE WAS MADE. FURTHER, THE CASE WAS FIXED FOR HEARING O N 03-12-2015 VIDE LETTER DATED 28-10-2015. MR. AMIT AGARWAL, CA& A/R APPEARED AND SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED TO 06-1-2016. ON THE SAID DA TE MR. AMIT AGARWAL, A/R APPEARED AND FILED WRITTEN SUBMISSION. THE SUBMISSI ON OF THE ASSESSEE HAS BEEN EXAMINED AND FOUND TO BE NOT SATISFACTORILY. 5. IN VIEW OF THE ABOVE CONSIDERING THE FACTS OF TH E CASE, I AM OF THE VIEW THAT THE ORDER DATED 04.03.2015 PASSED U/S 143(3) OF THE I.T ACT BY THE A.O STANDS ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE AND DESERVES TO BE SET ASIDE TO THE TABLE OF A..O WITH DIRECTION TO EXAMIN E AND VERIFY THE ABOVE ISSUE AFTER GIVING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5 ITA NO.155/KOL/2017 BENGAL UNITED CREDIT BELANI HOUSING LIMITED A.YR.2012-13 5 11. AGGRIEVED BY THE ORDER OF CIT THE ASSESSEE HA S PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 12. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COU NSEL FOR THE ASSESSEE AND THE LD. DR. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE FACTS WITH REGARD TO THE CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT WERE FURNISHED BY THE ASSESSEE AND WERE EXAMINED BY THE AO. ACCORDING TO HIM THEREFORE THERE WAS DUE APPLICATION OF MIND BY THE AO ON ISSUE OF DEDUCTION U/S 80IB(10) OF THE ACT. THE CIT IN THE IMPUGNED ORDER HAS NOT SET OUT AS TO HOW AND WHAT ARE THE CONDITIONS FOR ALLOW ING DEDUCTION U/S 80IB(10) OF THE ACT THAT WERE NOT SATISFIED. ACCORDING TO HIM THERE FORE THE CONCLUSION OF CIT THAT THE ISSUE OF ALLOWING DEDUCTION U/S 80IB(10) OF THE ACT WAS NOT PROPERLY EXAMINED BY THE AO WHILE CONCLUDING THE ASSESSMENT CANNOT BE SUSTAI NED. 13. WITH REGARD TO THE ADVANCE RECEIVED FROM TH E CUSTOMERS, IT WAS SUBMITTED THAT THE CIT ADMITS IN THE IMPUGNED ORDER THAT THE DETAILS O F THE ADVANCE RECEIVED FROM THE CUSTOMERS HAD BEEN FURNISHED BY THE ASSESSEE. THE C ITS GRIEVANCE IS ONLY THAT THE AO HAS NOT EXAMINED THE LIST OF ADVANCE OF CUSTOMERS B Y ISSUING NOTICE U/S 133(6) OF THE ACT OR BY MAKING OTHER ENQUIRIES. IT WAS HIS SUBMIS SION THAT THE MANNER OF MAKING ENQUIRIES BY THE AO CANNOT BE THE SUBJECT MATTER OF EXAMINATION BY CIT IN EXERCISE OF HIS POWERS U/S 263 OF THE ACT. IT WAS ALSO SUBMITTE D THAT THERE ARE NO FACTS BROUGHT OUT ON RECORD BY CIT IN THE IMPUGNED ORDER TO SHOW THAT THERE EXIST CIRCUMSTANCES WHICH WARRANTED ISSUE OF NOTICE U/S 133(6) OF THE ACT OR MAKING FURTHER ENQUIRIES. 14. IT WAS ALSO SUBMITTED BY HIM THAT NO REASONS HAVE BEEN GIVEN BY CIT IN THE IMPUGNED ORDER FOR EXERCISING POWERS U/S 263 OF THE ACT. THE ORDER IS ALSO SILENT AS TO HOW THE ORDER OF AO WAS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE. IT WAS THEREFORE SUBMITTED BY HIM THAT THE IMPUGNED ORDER DESERVES TO BE QUASHED. 6 ITA NO.155/KOL/2017 BENGAL UNITED CREDIT BELANI HOUSING LIMITED A.YR.2012-13 6 15. THE LD. DR RELIED ON THE ORDER OF CIT AND SU BMITTED THAT THE CONDITIONS FOR INVOKING POWERS U/S 263 OF THE ACT WERE DULY SATISF IED. 16. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION T O THE RIVAL SUBMISSIONS. WE ARE OF THE VIEW THAT ON BOTH THE ISSUES OF ALLOWING DEDUCTION U/S 80IB(10) OF THE ACT AS WELL AS THE DETAILS OF ADVANCE FROM THE CUSTOMERS THE AO HAD MA DE DUE ENQUIRIES BEFORE COMPLETING THE ASSESSMENT U/S 143(3) OF THE ACT. TH ESE DETAILS HAD ALREADY BEEN SET OUT IN PARAGRAPHS 3 TO 7 OF THIS ORDER. THE ORDER OF T HE AO ALSO MAKES REFERENCE TO ALL THE DETAILS HAVING BEEN PERUSED BY THE AO. IN PARTICULA R THERE IS A SPECIFIC REFERENCE TO THE EXAMINATION BY THE AO OF DEDUCTION U/S 80IB(10) OF THE ACT. THE CONCLUSION OF CIT THEREFORE THAT THE AO FAILED TO MAKE PROPER ENQUIRI ES BEFORE CONCLUDING THE ASSESSMENT, CANNOT BE SUSTAINED. WE ARE ALSO OF THE VIEW THAT T HE NON ISSUANCE OF NOTICE U/S 133(6) OF THE ACT IN RESPECT OF ADVANCE RECEIVED FROM THE CUSTOMERS OR NOT MAKING ANY ENQUIRIES THEREON BY ITSELF CANNOT BE THE BASIS TO SAY THAT THERE WAS A FAILURE ON THE PART OF AO TO MAKE PROPER AND NECESSARY ENQUIRIES. A REA DING OF NOTICE ISSUED U/S 142(1) OF THE ACT BY THE AO BEFORE COMPLETING ASSESSMENT U/S 143(3) OF THE ACT AND THE DETAILS FURNISHED BY THE ASSESSEE IN RESPONSE TO THIS NOTIC E CLEARLY SHOWS THAT THE AO WAS FULLY CONSCIOUS OF THE DETAILS OF ADVANCE RECEIVED FROM THE CUSTOMERS FURNISHED BY THE ASSESSEE. THERE ARE NO FACTS BROUGHT OUT ON RECORD TO SHOW THAT FURTHER ENQUIRY WAS REQUIRED TO BE MADE BY THE AO ON THE DETAILS OF ADV ANCE FROM THE CUSTOMERS FURNISHED BY THE ASSESSEE. 17. WE ARE OF THE VIEW THAT ORDER OF CIT IS A NO N-SPEAKING ORDER AND DOES NOT DISCUSS HOW THE ORDER OF AO PASSED U/S 143(3) OF THE ACT WA S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THESE CIRCUMSTANCES, WE QUASH THE ORDER PASSED U/S 263 OF THE ACT AND ALLOW THE APPEAL OF ASSESSEE. 7 ITA NO.155/KOL/2017 BENGAL UNITED CREDIT BELANI HOUSING LIMITED A.YR.2012-13 7 18. IN THE RESULT THE APPEAL OF ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT O N 31.07.2017. SD/- SD/- [WASEEM AHMED] [ N.V.VASUD EVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31.07.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1. BENGAL UNITED CREDIT BELANI HOUSING LIMITED, 225 C, A.J.C.BOSE ROAD, KOLKATA- 700020. 2. C.I.T., KOLKATA-4, KOLKATA. 3. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT KOLKATA BENCHE S