Seeta Reality Private Limited, RAIPUR (CG) V. Assistant Commissioner of Income Tax-1(2), RAIPUR

ITA 166/BIL/2011

• Counselvise Citation: 16624714 RSA 2011
• Duration Of Justice: 3 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 08-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: S R RAO
• Keywords: Business income; Search and seizure
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER IT A NO. 166 / BLPR./2011 ( ASSESSMENT YEAR : 20 06 0 7 ) SITA REALTY PVT. LTD. 5 PARK STREET, CHOUBE COLONY RAIPU R (C.G) PAN AAICS5408F APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 1(2), RAIPUR .... RESPONDENT ASSESSEE BY : SHRI S.R. RAO REVENUE BY : SHRI S.K. MEENA DATE OF HEARING 12.06.2015 DATE OF ORDER 19.06. 2015 O R D E R PER SHAMIM YAHYA, A.M. THE APPEA L BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 3 RD DECEMBER 2010 , PASSED BY THE LEARNED CIT(A), BILASPUR, FOR THE ASSESSMENT YEAR 20 06 07 . THE GROUND RAISED BY THE ASSESSEE IS AS UNDER: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE LAOS DISALLOWANCE OF TOTAL EXPENDITURE OF ` 61,093, CLAIMED BY THE ASSESSEE COMPANY ALLEGING THAT THE ASSESSEE COMPANY HAS NEITHER EXECUTED ANY SITA REALTY PVT. LTD. 2 WORK IN THE YEAR NOR RECEIVED ANY INTEREST ON ADVANCES, WHICH IS HIGHL Y ARBITRARY, UNWARRANTED AND UNJUSTIFIED. 2. IN THIS CASE, THE ASSESSMENT WAS DONE UNDER SECTION 153A OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ), PURSUANT TO A SEARCH AND SEIZURE OPERATION CONDUCTED ON HIRA GROUP OF CASES . THE ASSESSING OFFICER NOTE D THAT THE ASSESSEE WAS INCORPORATED ON 10 TH NOVEMBER 2004 AND DURING THE YEAR, NO WORK HAS BEEN EXECUTED BY THE COMPANY. ACCORDINGLY, NO INCOME HAS BEEN SHOWN. THE ASSESSING OFFICER HELD THAT NEITHER ANY WORK WAS DONE DURING THE YEAR NOR ANY INTEREST HAS BEEN CHARGED ON ADVANCES. THE EXPENDITURE OF ` 61,093, CLAIMED BY THE ASSESSEE WAS DISALLOWED. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE ADDITION. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE DETAILS OF EXPENDITURES CLAIMED DURING THE YEAR, IS AS UNDER: BANK CHARGES AND COMMISSION ` 435 LEGAL, PROFESSIONAL & CONSULTANCY CHARGES ` 54,000 PRINTING & STATIONERY ` 852 AUDITORS REMUNERATION ` 3,306 PRELIMINARY EXPENSES WRITTEN OFF ` 2,500 WE NOTE THAT THE ASSESSEE HAS BEEN INCORPORATED VERY RECENTLY. NO BUSINESS INCOME HAS BEEN SHOWN. NO CASE HAS BEEN MADE OUT THAT THE ASSESSEE HAS COMMENCED ITS BUSINESS. IN THESE CIRCUMSTANCES, EXCEPT THE EXPENDITURE WHICH ARE NECESSARY TO BE INCURRED TO MEET THE BASIC REQUIREMENT FOR A NEWLY INCORPORATED COMPANIES, OTHER SITA REALTY PVT. LTD. 3 EXPENDITURES CLAIMED CANNOT BE ALLOWED. IN THIS VIEW OF THE MATTER, IN OUR CONSIDERED OPINION, THE LEGAL, PROFESSIONAL AND CONSULTANCY CHARGES SHOWN AT ` 54,000, CANNOT BE ALLOWED , AS NO BUSINESS HAS BEEN SHOWN . NO DETAILS REGARDING EXPENDITURE HAVE BEEN FURNISHED . THEY COULD HAVE, AT BEST, BE TREATED AS PRE OPERATIVE EXPENSES IF THEY RELATED TO ANY PROJECT BEING UNDERTAKEN BY THE ASSESSEE. HOWEVER, SINCE THE SAME HAS BEEN CLAIMED AS LOSS, THE SAM E CANNOT BE ALLOWED. ACCORDINGLY, WE MODIFY THE ORDERS OF THE AUTHORITIES BELOW AND HOLD THAT ` 54,000, OUT OF THE LOSS CLAIMED OF ` 61,093, CANNOT BE ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 19 TH JUNE 2015 SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER RAI PUR , DATED : 19 TH JUNE 2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, BILASPUR CITY CONCERNED ; (5) THE DR, ITAT, RAIPUR (6) GUARD FILE . TRUE C OPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY SR. PRIVATE SECRETARY / ASSISTANT REGISTRAR ITAT, RAIPUR