Himanshi Property Pvt. Ltd., Surat V. The Income Tax Officer, Ward-4(3), Ahmedabad

ITA 1568/AHD/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6090 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 03-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT JAIN
• Section: 143(3)

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE JUSTICE SHRI P. P. BHATT, PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1568/AHD/2015 ( ASSESSMENT YEAR : 2011-12) HIMANSHI PROPERTY PVT. LTD. BNB HIGH SCHOOL COMPOUND, GROUND FLOOR, N. H. NO.8, VAV, KAMREJ, SURAT 394326 / VS. INCOME TAX OFFICER WARD 4(3), PRATYAKSHA KAR BHAVAN, OPP. POLYTECHNIC, AMBAWADI, AHMEDABAD ./ ./ PAN/GIR NO. : AABCH8970L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI KAMLESH BHATT, C.A. / RESPONDENT BY : SHRI LALIT JAIN, SR. D.R. DATE OF HEARING 10/01/2019 !'# / DATE OF PRONOUNCEMENT 24/01/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-2, AHMEDABAD (CIT(A) IN SHORT), DATED 3 0.03.2015 ARISING IN THE ASSESSMENT ORDER DATED 28.02.2014 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMENT YEAR 2011-12. ITA NO. 1568/AHD/15 [HIMANSHI PROPERTY PVT. LTD. VS. ITO] AY 2011-12 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.9 6,08,510/- MADE BY THE LD. ASSESSING OFFICER AND HENCE YOUR AP PELLANT PRAYS THAT THE SAME BE DELETED. 2. WITHOUT CONSIDERING FACTS AND CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DIRECTI NG THE LD.A.O. TO MAKE THE FURTHER ADDITION OF RS.18,79,49 0/- FOR THE ALLEGED VIOLATION OF S.40(A)(IA) OF THE ACT THOUGH THE SAME EXPENDITURE HAS ALREADY BEEN DISALLOWED BY THE LD. A.O. AND THE SAID DISALLOWANCE IS CONFIRMED BY THE LD. CIT(A ) AND HENCE YOUR APPELLANT PRAYS THAT THE SAME BE DELETED . 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE SUBMITTED WITH REFERENCE TO GROUND NO.1 OF ITS APPEAL THAT THE AO HAS DISALLOWED THE CONSTRUCTION COSTS (RS.79.73L AKHS), ARCHITECT FEES (RS.50 LAKHS) AND BU PERMISSION EXPENSE (RS.1. 34 LAKHS) AGGREGATING TO RS.96,08,510/- ON THE GROUND THAT TH E AFORESAID EXPENDITURE WERE INCURRED AFTER THE BU PERMISSION A PPLIED ON 27.08.2010 AND GRANTED BY THE AHMEDABAD MUNICIPAL C ORPORATION VIDE LETTER DATED 07.08.2010. IN THIS REGARD, THE LEARN ED AR FOR THE ASSESSEE REFERRED TO THE CONSTRUCTION COST ACCOUNT (AT PAGE NO.20 OF THE PAPER BOOK) AND ALSO THE RESPECTIVE PARTIES ACCOUN TS TO SUGGEST THAT THE EXPENSES TOWARDS CONSTRUCTION WERE ACTUALLY INC URRED PRIOR TO THE PERMISSION OF MUNICIPAL CORPORATION AND THE AGGREGA TE EXPENDITURE WERE MERELY TRANSFERRED TO THE CONSTRUCTION COSTS A CCOUNT AFTER THE BU PERMISSION. THE LEARNED AR ACCORDINGLY SUBMITTED T HAT SUCH BOOK ENTRIES ARE NEITHER DECISIVE AND NOR DETERMINATIVE OF THE POINT OF TIME OF INCURRING EXPENDITURE. THE LEARNED AR THEREAFTE R REFERRED TO YEAR- WISE BREAK UP OF INCOME AND COST AND SUBMITTED THAT IN THE CONSTRUCTION OF BUILDING, THE ASSESSEE IN AGGREGATE (INCLUDING THE EXPENDITURE IN DISPUTE) HAS INCURRED CONSTRUCTION C OSTS OF RS.4,12,75,256/- WHEREAS THE INCOME ON SALE OF FLAT HAS BEEN RECOGNIZED AT RS.5,12,31,406/- IN AGGREGATE SPANNIN G OVER THE YEARS OF ITA NO. 1568/AHD/15 [HIMANSHI PROPERTY PVT. LTD. VS. ITO] AY 2011-12 - 3 - THE PROJECT. IT WAS THUS CONTENDED THAT THE ASSESS EE HAS SHOWN HANDSOME RETURN OF NEARLY 20% ON THE CONSTRUCTION O F THE PROJECT. THE LEARNED AR THEREAFTER REFERRED TO THE VARIOUS SUBMI SSIONS PLACED BEFORE THE LOWER AUTHORITIES AND CONTENDED THAT THE REVENUE HAS FAILED TO APPRECIATE THE FACTS IN PERSPECTIVE AND INDULGED IN A WRONGFUL DISALLOWANCE. IT WAS FURTHER CONTENDED THAT SOME E XPENDITURES MIGHT HAVE BEEN INCURRED AFTER THE APPROVAL OF THE MUNICI PAL AUTHORITY ALSO TO ENABLE IT TO MEET THE CONTRACTUAL OBLIGATIONS WI TH THE HOME BUYERS WHICH MAY BE OBJECTIVELY VERIFIED. THE LEARNED AR ACCORDINGLY PLEADED FOR REMITTING THE MATTER BACK TO THE AO TO RE-VISIT THE RELEVANT FACTS TO COME TO A RIGHTFUL CONCLUSION. 4. AS REGARDS GROUND NO.2, IN RESPONSE TO DISALLOWA NCE OF RS.18,79,490/- FOR ALLEGED VIOLATION OF OBLIGATIONS CAST UNDER CHAPTER XVII TOWARDS DEDUCTION OF TAX, THE LEARNED AR POINT ED OUT THAT THE ASSESSEE HAS DULY DEDUCTED AND DEPOSITED THE TAX AL BEIT BEFORE THE DUE DATE PRESCRIBED UNDER S.139(1) OF THE ACT AND CONSE QUENTLY, THE ASSESSEE HAS NOT COMMITTED ANY DEFAULT PER SE AS CONTEMPLATED IN THE RELEVANT TDS PROVISIONS. THE LEARNED AR THUS SUBMI TTED THAT THIS ISSUE ALSO REQUIRES TO BE EXAMINED AFRESH BY THE AO IN THE LIGHT OF EVIDENCES AVAILABLE IN THIS REGARD. 5. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE AO AND CIT(A) BUT HOWEVER CONCURRED WITH THE AVERMENTS MADE ON BEHALF OF THE ASSESSEE FOR RESTORING THE ISSUE BACK TO THE FILE OF THE AO FOR DE NOVO EXAMINATION OF FACTUAL ASPECTS AND FOR DETERMINING THE ISSUES INVOLVED AFRESH. 6. IN VIEW OF THE CONSENSUS FORGED BETWEEN ASSESSEE AND REVENUE FOR RESTORING BOTH THE ISSUES BACK TO THE FILE OF T HE AO FOR FRESH EXAMINATION OF FACTS IN THE BACKGROUND NARRATED ABO VE, WE CONSIDER IT ITA NO. 1568/AHD/15 [HIMANSHI PROPERTY PVT. LTD. VS. ITO] AY 2011-12 - 4 - EXPEDIENT TO RESTORE BOTH THE ISSUES TO THE FILE OF THE AO. IT WILL THUS BE OPEN TO THE ASSESSEE TO SATISFY THE AO TOWARDS B ONAFIDES OF ITS CLAIMS AND TO CORROBORATE ITS SUBMISSIONS ON BOTH T HE ISSUES WITH RELEVANT FACTS AND MATERIAL IN ITS POSSESSION. THE AO IS ACCORDINGLY DIRECTED TO CONSIDER BOTH THE ISSUES AFRESH AND DEC IDE THE SAME IN ACCORDANCE WITH THE LAW AFTER GIVING REASONABLE OPP ORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (JUSTICE P. P. BHATT) (PRADIP KU MAR KEDIA) PRESIDENT ACCOUNTANT MEMBER AHMEDABAD: DATED 24/01/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 24/01/2 019