R.A.DEVELOPMENT SERVICES, MUMBAI V. CIT (A) 34, MUMBAI

ITA 1607/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1943 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 23-11-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 18-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Principle of natural justice; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH J , MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.1607/MUM/2015 FOR (ASSESSMENT YEAR: 2004-05) M/S R.A. DEVELOPMENT SERVICES 9B/302, GOD GIFT TOWER, M. R. CHOWK, HILL ROAD, MUMBAI-400350. PAN: AAEFR8120Q VS. CIT(A)-34, ROOM NO. 3102, 3 RD FLOOR, B-WING, MITTAL COURT, NARIMAN POINT, MUMBAI-400021. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE (AR) REVENUE BY : SHRI C.S. SHARMA ( DR) DATE OF HEARING : 23.11.2016 DATE OF PRONOUNCEMENT : 25.11.2016 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT. PER PAWAN SINGH, JM: 1. THIS APPEAL U/S 253 OF THE INCOME-TAX ACT (ACT) I S DIRECTED BY ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) [ FOR SHORT THE CIT(A)] -34 MUMBAI DATED 10.12.2014 FOR ASSESSMENT YEAR (AY) 20 04-05. THOUGH, THE ASSESSEE HAS RAISED AS MANY AS FIVE GROUNDS OF APPEAL, HOWEV ER, AS PER OUR CONSIDERED OPINION THE ONLY SUBSTANTIAL GROUND OF APPEAL IS WHETHER THE AO ERRED IN CONFIRMING THE ADDITION OF RS. 25,28,841/- TO THE T OTAL INCOME ON THE BASIS OF NET PROFIT @ 8% ON TOTAL SALE OF RS. 3,74,87,174/-. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM DERIVING INCOME FROM BUSINESS ACTIVITY OF BUILDER & DEVELOPER. THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 01.11.04 DECLARING TOTAL INCOME AT RS. 5,37,240/ -. THE ASSESSEE HAS SHOWN THE NET PROFIT @ 1.25%. TO VERIFY THE CORRECTNESS OF IN COME, THE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNTS AND DETAILS OF EXPENS ES. THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNTS AND DETAILS OF EXPENS ES. THE NET PROFIT FROM BUSINESS ACTIVITY @ 1.25% WAS NOT ACCEPTED BY THE A SSESSING OFFICER (AO) AND THE 2 ITA NO. 1607/M/2015 M/S R.A. DEVELOPMENT SERVICES AO ACCORDINGLY ESTIMATED 8% OF SALE DECLARED BY THE ASSESSEE AS NET PROFIT. ACCORDINGLY, DIFFERENCE OF RS. 25,28,841/- WAS ADDE D TO THE INCOME OF ASSESSEE IN THE ORDER PASSED U/S 143(3) DATED 16.12.2006. ON AP PEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA), THE ADDITION WAS CONFIRMED. THUS, FURTHER AGGRIEVED BY THE ORDER OF CIT, THE PRESENT APPEAL IS FILED BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE WAITING FOR SUFFICIENT TIME. FROM PERUSAL OF RECORD, IT WAS NOTICED THAT ON 11.07.201 6, THE ASSESSEE SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED FOR 10.08. 2 016. ON 10.08. 2016 NONE APPEARED AND THE CASE WAS ADJOURNED FOR 25.08.2016. ON 25.08.2016 THIS CASE FROM THE CATEGORY OF SMC WAS TRANSFERRED TO THIS BENCH A ND WAS LISTED ON 17.10.2016, AGAIN NONE APPEARED ON BEHALF OF ASSESSEE. ON 17.10 .2016, FRESH NOTICE WAS ORDERED TO BE SERVED BY NOTICE THROUGH RPAD. THE NOTICE WAS DULY SERVED ON THE ASSESSEE ON 20.10.2016 AS AD IS AVAILABLE ON RECORD. NEITHER THE AUTHORIZED PERSON NOR ANY REPRESENTATIVE ON BEHALF OF ASSESSEE APPEARED NOR A NY APPLICATION FOR ADJOURNMENT WAS FILED. HENCE, WE HAVE NO OPTION EXCEPT TO PROCE ED FURTHER AND TO HEAR THE LD. DR FOR REVENUE. 4. WE HAVE NOTICED THAT THE APPEAL IS FILED BEYOND THE PRESCRIBED PERIOD OF TIME OF LIMITATION. THE ASSESSEE ALONG WITH APPEAL FILED AN APPLICATION FOR CONDONATION OF DELAY IN THE FORM OF AFFIDAVIT OF MR. ARSHAD MOHD. ZAHEER, PARTNER OF THE ASSESSEE- FIRM. IN THE AFFIDAVIT, THE ASSESSEE CONTENDED THAT ORDER OF CIT(A) WAS SERVED ON ASSESSEE ON 07.01.2015. THE TIME FOR FILING THE APP EAL BEFORE THE TRIBUNAL WAS TILL 08.03.2015 AND THERE IS 10 DAYS DELAY IN FILING OF THE APPEAL. THE CONTENTS OF AFFIDAVIT FURTHER DISCLOSED THAT THE DELAY OCCURRED DUE TO THE NON-AVAILABILITY OF ACCOUNTANT OF THE ASSESSEE-FIRM AND THE PARTNER COU LD NOT PREPARED THE COMPILATION OF DOCUMENT FOR FILING APPEAL BEFORE THE ITAT. WE H AVE SEEN THAT IN COLUMN 9 OF APPEAL FORM THE ASSESSEE HAS CATEGORICALLY DISCLOSE D THE DATE OF COMMUNICATION AS 15.01.2015. THE APPEAL FORM IS DULY SIGNED BY THE P ERSON WHO HAS FILED AFFIDAVIT. THE APPEAL FORM IS ALSO SIGNED BY CHARTERED ACCOUNT ANT SHRI VISHWANATH N. SHETTY. FROM THE COMPARISON OF THE APPEAL FORM AND THE CONT ENTS OF AFFIDAVIT, IT IS CLEAR THAT THE PARTNER OF ASSESSEE HAS MADE THE WRONG STATEMEN T EITHER IN MEMO OF APPEAL OR IN AFFIDAVIT FILED IN SUPPORT OF CONDONATION OF DELAY. WE HAVE NOTICED THAT CERTAINLY THERE IS CONTRADICTION IN COLUMN 9 OF FORM-36 (APPE AL FORM) AND IN THE AFFIDAVIT 3 ITA NO. 1607/M/2015 M/S R.A. DEVELOPMENT SERVICES FILED IN SUPPORT OF CONDONATION OF DELAY. SUCH PRAC TICE ADOPTED BY LD. AR OF THE ASSESSEE IS CERTAINLY NOT APPRECIABLE. WE HAVE FURT HER NOTICED THAT THERE IS ONLY 10 DAYS DELAY IN FILING OF THE APPEAL. THE REVENUE WOU LD NOT SUFFER ANY PREJUDICE, IF THE APPEAL IS DECIDED ON MERIT. HENCE, KEEPING IN VIEW THE PRINCIPAL OF NATURAL JUSTICE, THE APPEAL IN FILING, DELAY IS CONDONED. 5. WE HAVE HEARD LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR REVENUE ON MERIT OF THE CASE. THE LD. DR FOR THE REVENUE FULLY SUPPORTED TH E ORDER OF AUTHORITIES BELOW. IT WAS FURTHER ARGUED BY LD. DR FOR REVENUE THAT THE A SSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNTS AND THE DETAILS OF EXPENSES BEFOR E THE AO AND THE AO CORRECTLY ESTIMATED THE NP WHICH IS QUITE REASONABLE IN THE B USINESS OF BUILDER & DEVELOPER. IT WAS FURTHER ARGUED BY THE LD. DR FOR THE REVENU E THAT DURING THE APPELLATE PROCEEDING, THE LD. CIT(A) SOUGHT THE REMAND REPORT FROM AO. THE AO FURNISHED THE REMAND REPORT ON 08.10.2014. THE REMAND REPORT OF AO WAS FURNISHED TO THE ASSESSEES REPRESENTATIVE. THE ASSESSEES REPRESENT ATIVE INSTEAD OF FILING PROPER REPLY AND ATTENDING THE PROCEEDING BEFORE THE LD. CIT(A) FILED THEIR REPLY IN THE TAPAL IN THE OFFICE OF LD. CIT(A). THE ASSESSEE FAILED TO SU BSTANTIATE THE GROUNDS OF APPEAL RAISED BEFORE THE FAA, THUS THE ADDITION ON ACCOUNT OF GP RATE WAS SUSTAINED. 6. WE HAVE CONSIDERED THE CONTENTION OF LD. DR FOR REV ENUE AND FURTHER PERUSED THE ORDER OF AUTHORITIES BELOW. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDER & DEVELOPER. THE ASSESSEE IN THE RETURN OF INCOME CLA IMED NP OF 1.25% ON DECLARED SALE OF RS. 3,74,87,175/-. THE ASSESSEE WAS ASKED T O PRODUCE THE BOOKS OF ACCOUNTS AND THE DETAILS OF EXPENSES. THE ASSESSEE FAILED TO FILE BOOKS OF ACCOUNTS AND VARIOUS DETAILS OF EXPENSES INCURRED. THE AO ON THE BASIS O F CONSIDERING THE NATURE OF BUSINESS ESTIMATED THE NP @ 8% AND ADDED AN AMOUNT OF RS. 25,28,841/- IN THE INCOME OF ASSESSEE. DURING THE FIRST APPELLATE PROC EEDING, THE LD. CIT(A) CALLED THE REMAND REPORT FROM THE AO ON THE CONTENTION OF ASSE SSEE THAT NO SUFFICIENT OPPORTUNITY TO PRODUCE THE BOOKS OF ACCOUNT WAS GIV EN TO THEM. ON THE CONTENTION OF THE ASSESSEE THE LD. CIT(A) CALLED THE REMAND RE PORT FROM AO. THE AO FURNISHED HIS REMAND REPORT DATED 08.10.2014. THE ASSESSEE WA S PROVIDED THE COPY OF REMAND REPORT FURNISHED BY AO. THE ASSESSEE FILED HIS REPL Y TO THE REMAND REPORT ON 20.11.2014 IN TAPAL. THE ASSESSEE AGAIN THE ASSESSE E FAILED TO SUBSTANTIATE HIS CONTENTION. EVEN BEFORE US, THE ASSESSEE HAS NOT FI LED ANY DOCUMENTARY EVIDENCE TO 4 ITA NO. 1607/M/2015 M/S R.A. DEVELOPMENT SERVICES SUBSTANTIATE HIS CONTENTION NOR THEIR REPRESENTATIV E COME FORWARD TO EXPLAIN THE FACT AND TO SUBSTANTIATE THEIR CLAIM. IN THESE CIRCUMSTA NCES WE FIND THE NP RATE ESTIMATED BY AO AND CONFIRMED BY LD CIT(A) IS QUITE REASONABL E. THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LOWE R AUTHORITIES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH NOVEMBER, 2016. SD/- SD/- (B.R.BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 25/11/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/