M/s. Tirupati Construction, Hooghly V. ITO, Ward - 22(4), Hooghly , Hooghly

ITA 1839/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2762 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 02-04-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 27-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL CIT SR DR REVEN
• Assessee Lawyers: D B TH AKUR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT, KZ] I.T.A. NO. 1839/KOL/2018 ASSESSMENT YEAR: 2011-12 M/S. TIRUPATI CONSTRUCTION...............................................................APPELLANT 618, G.T. ROAD, BATTALA, SERAMPORE, HOOGHLY, PIN 712 201. (W.B.) [PAN: AADFT 3834 G] ITO, WARD 22(4), HOOGHLY...............................RESPONDENT HOOGHLY 712 101. APPEARANCES BY: SHRI D.B. THAKUR, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI P.K. MONDAL, ADDL. CIT, SR. DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : APRIL 02, 2019 DATE OF PRONOUNCING THE ORDER : JUNE 07, 2019 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) 6, KOLKATA DATED 20.06.2018 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS. 10,68,600/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF SUPPRESSION OF SALES. 2. THE ASSESSEE IN THE PRESENT IS A PARTNERSHIP FIRM WHICH IS CARRYING ON THE BUSINESS AS A BUILDING DEVELOPER. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 03.11.2011 DECLARING A TOTAL INCOME OF RS. 1,53,450/-. IN THE SAID RETURN GROSS SALE OF FLATS WAS SHOWN BY THE ASSESSEE AT RS. 50,11,525/-. AS PER THE INFORMATION COLLECTED BY THE AO, THE ASSESSEE HAD REGISTERED SALE DEEDS OF TWO FLATS OF THE VALUE OF RS. 10,68,600/- DURING THE YEAR UNDER CONSIDERATION, BUT THE SAID SALE WAS NOT REFLECTED IN THE GROSS SALE OF FLATS SHOWN BY THE ASSESSEE. IN THIS REGARD, IT WAS EXPLAINED BY THE ASSESSEE BEFORE THE AO DURING THE COURSE OF ASSESSMENT 2 I.T.A. NO. 1839/KOL/2018 ASSESSMENT YEAR: 2011-12 M/S. TIRUPATI CONSTRUCTION PROCEEDINGS THAT THE SALE OF THE SAID TWO FLATS WAS ACCOUNTED FOR IN THE EARLIER YEARS ON RECEIPT BASIS. SINCE THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND THE SALE OF TWO FLATS WAS REQUIRED TO BE ACCOUNTED FOR BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION ON ACCRUAL BASIS, THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND MADE AN ADDITION OF RS. 10,68,000/- TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED U/S 143(3) VIDE AN ORDER DATED 28.03.2014. 3. AGAINST THE ORDER PASSED BY THE AO U/S 143(3), AN APPEAL WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT(A). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), SUBMISSION MADE BEFORE THE AO WAS REITERATED ON BEHALF OF THE ASSESSEE. THE LD. CIT(A) DID NOT FIND MERIT IN THE SAID SUBMISSION AND PROCEEDED TO CONFIRM THE ADDITION OF RS. 10,68,600/- MADE BY THE AO ON THIS ISSUE FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 6 OF HIS IMPUGNED ORDER. 6. DURING THE APPELLATE PROCEEDINGS THE AR OF THE APPELLANT STATED THAT THESE PARTICULAR FINANCIAL TRANSACTIONS TOOK PLACE IN THE EARLIER YEARS BUT COULD NOT EXPLAIN AS TO WHY THE SALE WAS NOT REFLECTED WHEN THE FLAT WAS ACTUALLY REGISTERED IN THE NAME OF THE OWNER EVEN THOUGH THE APPELLANT MAINTAINS ACCOUNT ON A MERCANTILE BASIS. THE EARLIER AMOUNT OF CASH RECEIVED IS OF NO CONSEQUENCE BECAUSE THE APPELLANT IS NOT MAINTAINING HIS ACCOUNT ON CASH BASIS. THEREFORE, AS PER THE PROVISION OF SECTION 145, I FIND THAT THE APPELLANT SHOULD HAVE MAINTAINED ITS ACCOUNTS ON MERCANTILE BASIS AND REFLECTED THE SALE OF FLAT OF RS. 10,68,600/- WHICH IT FAIL TO DO SO. IT ALSO FAILED TO GETS ITS ACCOUNTS AUDITED. HENCE, I UPHOLD THE ADDITION MADE BY THE AO OF RS. 10,68,600/- AND GROUND NO. 3 OF THE APPEAL STANDS DISMISSED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3 I.T.A. NO. 1839/KOL/2018 ASSESSMENT YEAR: 2011-12 M/S. TIRUPATI CONSTRUCTION 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE AMOUNT OF RS. 10,68,600/- IN QUESTION TOWARDS CONSIDERATION FOR SALE OF TWO FLATS WAS OFFERED BY THE ASSESSEE TO TAX FOR A.Y. 2008-09 ON RECEIPT BASIS AND ADDITION OF THE SAME AMOUNT AGAIN IN THE YEAR UNDER CONSIDERATION HAS RESULTED IN DOUBLE ADDITION. HE HOWEVER HAS NOT BEEN ABLE TO EXPLAIN AS TO HOW AND WHY THE SAID AMOUNT WAS OFFERED TO TAX BY THE ASSESSEE IN A.Y. 2008-09 ON RECEIPT BASIS WHEN THE MERCANTILE SYSTEM OF ACCOUNTING WAS BEING FOLLOWED BY THE ASSESSEE. HE HAS ALSO NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THE AMOUNT IN QUESTION WAS OFFERED TO TAX BY THE ASSESSEE IN A.Y. 2008-09 AS CLAIMED. I, THEREFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(A) CONFIRMING THE ADDITION OF RS. 10,68,600/- MADE BY THE AO ON ACCOUNT OF SALE OF FLATS ON ACCRUAL BASIS AND UPHOLDING THE SAME, I DISMISS THIS APPEAL FILED BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JUNE, 2019. SD/- (P.M. JAGTAP) VICE PRESIDENT DATED: 07/06/2019 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. M/S. TIRUPATI CONSTRUCTION, 618, G.T. ROAD, BATTALA, SERAMPORE, DIST. HOOGHLY 712 201. 2. ITO, WARD 22(4), HOOGHLY. 3. THE CIT(A) 4 I.T.A. NO. 1839/KOL/2018 ASSESSMENT YEAR: 2011-12 M/S. TIRUPATI CONSTRUCTION 4. THE CIT 5. DR TRUE COPY, BY ORDER, ASSISTANT REGISTRAR / H.O.O. ITAT, KOLKATA