Land Marvel Homes, CHENNAI V. ACIT, CHENNAI

ITA 1809/CHNY/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7427 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 15-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D ANAND
• Keywords: Reopening of assessment; Unexplained cash credit; Additional evidence
• Section: 143(3); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1809/CHNY/2016 ' (' / ASSESSMENT YEAR : 2007-08 M/S LAND MARVEL HOMES, OLD NO.2, NEW NO.3, 1 ST MAIN ROAD, INDIRA NAGAR, ADYAR, CHENNAI - 600 034. PAN : AABFL 4387 N V. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE IV, CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI D. ANAND, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 0 . 1$ / DATE OF HEARING : 03.07.2018 2!( . 1$ / DATE OF PRONOUNCEMENT : 12.07.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -15, CHENN AI, DATED 09.03.2016 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SHRI D. ANAND, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SE CTION 143(3) OF 2 I.T.A. NO.1809/CHNY/16 THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') AFTER SCRUTINY, DETERMINING THE TOTAL INCOME OF 1,49,33,350/-. LATER ON, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT. AC CORDING TO THE LD. COUNSEL, THE ASSESSEE FILED THE RETURN OF INCOME AN D ASKED FOR THE COPY OF REASONS RECORDED FOR REOPENING. THE ASSESS EE HAS ALSO RAISED OBJECTIONS FOR REOPENING OF ASSESSMENT. ACC ORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER WAS EXPECTED TO DISP OSE OF THE OBJECTION OF THE ASSESSEE INDEPENDENTLY BEFORE PASS ING ANY ASSESSMENT ORDER IN VIEW OF THE JUDGMENT OF APEX CO URT IN GKN DRIVESHAFTS (INDIA) LTD. V. ITO (2003) 259 ITR 19. HOWEVER, NO ORDER WAS PASSED SO FAR. ACCORDING TO THE LD. COUN SEL, THE OBJECTION OF THE ASSESSEE FOR REOPENING OF ASSESSME NT WAS NOT DISPOSED OF SO FAR BY THE ASSESSING OFFICER. 3. COMING TO THE MERIT OF THE APPEAL, THE LD.COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER FOUND THERE WAS DIFFERENCE OF 52,98,152/- IN THE WORK IN PROGRESS. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS SHOWN THE AMOUNT OF 52,98,152/- AS A PROJECT DONE BY OTHER CONCERN AND THE SAME WAS REFLECTED IN THE BOOKS OF ACCOUNT. THE LD.COUNSEL FOR THE ASSES SEE FURTHER 3 I.T.A. NO.1809/CHNY/16 SUBMITTED THAT THE SUM OF 52,98,152/- ON WORK IN PROGRESS WAS NOT UNEXPLAINED CREDIT. IT IS AN ACTUAL COST OF DEVELO PMENT INCURRED BY THE ASSESSEE-FIRM. THEREFORE, ACCORDING TO THE LD. COUNSEL, THERE IS NO JUSTIFICATION IN DISALLOWING THE CLAIM OF THE AS SESSEE. 4. WITH REGARD TO THE NEXT DISALLOWANCE OF 2,83,66,050/-, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS G ENUINELY INCURRED BY THE ASSESSEE-FIRM AGAINST THE SALE OF P ROJECTS, WHICH WAS OFFERED FOR TAXATION. ACCORDING TO THE LD. COU NSEL, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE ANY EVID ENCE. THE ADDITIONAL EVIDENCE WAS PRODUCED BEFORE THE CIT(APP EALS). HOWEVER, SHE REFUSED ADMIT THE SAME. THEREFORE, AC CORDING TO THE LD. COUNSEL, AN OPPORTUNITY MAY BE GIVEN TO THE ASS ESSEE. 5. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE NON -DISPOSAL OF OBJECTION OF THE ASSESSEE FOR REOPENING OF ASSESSME NT IS A CURABLE DEFECT, THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER IN VIEW OF THE JUDGMENT OF MADRAS HIGH COURT IN HOME FINDERS HOUSING LTD. V. ITO (2017) 82 TAXMANN. COM 17. IN RESPECT OF THE ADDITION ON MERIT, THE LD. D.R. SUBM ITTED THAT WITH 4 I.T.A. NO.1809/CHNY/16 REGARD TO DIFFERENCE IN WORK IN PROGRESS AND DISALL OWANCE OF 2,83,66,050/-, THE MATTER MAY BE RE-EXAMINED BY THE ASSESSING OFFICER ON THE BASIS OF THE MATERIAL THAT MAY BE FI LED BY THE ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSING OFFICER HAS NOT DISPOSED OF THE OBJECTION OF THE ASSESSEE FOR REOPENING OF ASSESSMENT. AS FOUND BY THE MADRA S HIGH COURT IN HOME FINDERS HOUSING LTD. (SUPRA), THE FAILURE OF T HE ASSESSING OFFICER TO DISPOSE OF THE REPRESENTATION / OBJECTIO N OF THE ASSESSEE FOR REOPENING OF ASSESSMENT IS ONLY A CURABLE DEFEC T. THEREFORE, THE ASSESSING OFFICER HAS TO DISPOSE OF THE SAME. IN VIEW OF THE ABOVE, THE ISSUE RAISED BY THE ASSESSEE ON MERIT AL SO NEEDS TO BE RECONSIDERED. ACCORDINGLY, ORDERS OF BOTH THE AUTH ORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECT ED TO DISPOSE OF THE OBJECTION FILED BY THE ASSESSEE FOR REOPENING O F ASSESSMENT AND THEREAFTER RE-EXAMINE THE MATTER ON MERIT, IF NECES SARY AND DECIDE THE SAME IN ACCORDANCE WITH LAW, AFTER GIVING A REA SONABLE OPPORTUNITY TO THE ASSESSEE. 5 I.T.A. NO.1809/CHNY/16 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12 TH JULY, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 12 TH JULY, 2018. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-15, CHENNAI-34 4. 0 81 /CIT-6, CHENNAI-34 5. 69 ,1 /DR 6. :' ; /GF.