ITO 25(2)3, MUMBAI V. SIDDHIVINAYAK CONSTRUCTION, MUMBAI

ITA 1887/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3451 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 04-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3)

Judgement Text

, E , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , !' , # , $ BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.1887/MUM/2013 ( # % &% / ASSESSMENT YEAR: 2006-07) INCOME TAX OFFICER 25(2)(3) C-11, R.NO.105, PRATYAKSHA KAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA(EAST), MUMBAI - 400051 / VS. M/S. SIDDHIVINAYAK CONSTRUCTION SUKARWADI, M.G.ROAD, BORIVALI(E), MUMBAI - 400066 ./ ./ PAN/GIR NO. : AANFS5318J ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI RAJESH S. SHAH DEPARTMENT BY: SHRI CHANDRAJIT SINGH / DATE OF HEARING: 29.03.2016 /DATE OF PRONOUNCEMENT: 18.05.2016 ! / O R D E R PER AMARJIT SINGH, JM: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 31.12.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-35, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE ASSESSMENT YEAR 2006-07. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM AND HAS FILED ITS ORIGINAL RETURN OF INCOME DE CLARING NIL INCOME ON 31.10.2006. SUBSEQUENTLY, ASSESSMENT U/S. 143(3) O F THE INCOME TAX ITA NO.1887/MUM/2013 ASSESSMENT YEAR: 2006-07 2 ACT, 1961( IN SHORT THE ACT) WAS COMPLETED BY T HE ASSESSING OFFICER ON 29.12.2008 DETERMINING TOTAL INCOME AT RS. NIL. THE ASSESSMENT WAS REOPENED BY ISSUANCE OF NOTICE U/S.148 THE ACT ON 2 8.03.2011 BY THE ASSESSING OFFICER. SUBSEQUENTLY THE ASSESSING OFFI CER COMPLETED ASSESSMENT U/S. 143(3) R.W.S 147 OF THE ACT DETERMI NING THE TOTAL INCOME OF THE APPELLANT AT RS.37,08,135/-. AGGRIEVED BY T HIS ORDER THE ASSESSEE FILED APPEAL BEFORE LEARNED CIT(A) AND THE LEARNED CIT(A) ARRIVED AT THIS CONCLUSION THAT THE REOPENING OF THE ASSESSMEN T U/S.147/148 OF THE ACT IS BAD IN LAW AND SET ASIDE THE SAID ASSESSMENT . FEELING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D CAREFULLY. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE ASSESSING OFFI CER HAS REOPENED THE ASSESSMENT U/S. 147 OF THE ACT IN ACCORDANCE WITH L AW BUT THE LEARNED CIT(A) HAS WRONGLY SET ASIDE THE SAID ASSESSMENT U/ S.147 OF THE ACT. ON APPRAISAL OF THE RECORD AVAILABLE IN THE FILE IT CAME INTO NOTICE THAT THE ASSESSEE WAS FOLLOWING THE PROJECT COMPLETION M ETHOD FROM VERY BEGINNING. THE ASSESSEES INCOME TAX RETURN FOR TH E A.Y.2001-02 TO 2005-06 WERE ACCEPTED U/S.143(3) OF THE ACT WHICH W ERE SUBMITTED ON THE BASIS OF PROJECT COMPLETION METHOD. AT THE TIM E OF COMPLETION OF THE ASSESSMENT BEFORE ASSESSING OFFICER FOR THE A.Y .2005-06, THE ASSESSING OFFICER HAS ALSO GIVEN THE FINDING TO THE EFFECT THAT THE CONSTRUCTION OF A WING WAS GOING ON AND 20 FLATS WERE CONSTRUCTED. THE SAID CONTENTION HAS BEEN ACCEPTED BY THE ASSESS ING OFFICER THAT NO NEW FLATS WERE CONSTRUCTED BUT THE CONSTRUCTION OF THE BUILDING OF ITA NO.1887/MUM/2013 ASSESSMENT YEAR: 2006-07 3 REHABILITATION WAS BEING CARRIED OUT. THE NECESSAR Y DETAILS OF THE PROJECT AND METHOD OF ACCOUNTING SYSTEM WERE SUBMITTED BEFO RE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS GIVEN ITS OPINI ON WHILE FINALISING THE SAID ASSESSMENT FOR THE A.Y.2005-06. THE ASSESSEE DISCLOSED THE MATERIAL EVIDENCE BEFORE THE ASSESSING OFFICER. WH ILE REOPENING THE ASSESSMENT U/S.147 OF THE ACT, THE ASSESSING OFFICE R DID NOT BROUGHT ANY NEW MATERIAL ON RECORD FOR THE REOPENING OF THE ASS ESSMENT. THE REOPENING WAS INITIATED ON THE OBJECTION OF AUDIT P ARTY. THERE IS NO NEW GROUND ON THE FILE TO WHICH IT CAN BE ASSUMED THAT THE REOPENING WAS DONE BY THE ASSESSING OFFICER ON THE BASIS OF ANY O THER GROUNDS. THE ASSESSEE WAS FOLLOWING THE PROJECT COMPLETION METHO D FOR THE PERIOD FROM A.Y.2001-02 TO 2005-06. AT THE TIME OF REOPEN ING THE ASSESSMENT THE ASSESSING OFFICER IS OF THE OPINION THAT THE AS SESSEE SHOULD FOLLOW THE PERCENTAGE COMPLETION METHOD AND TO DECLARE THE PROFIT ON YEARLY BASIS. IT IS MERELY CHANGE OF OPINION AND ASSESSME NT WAS NOT REQUIRED TO BE REOPEN U/S.147 OF THE ACT. WE ALSO PLACED RELIA NCE UPON LAW SETTLED IN [2010] 187 TAXMAN 312 (SC) VS. KELVINATOR OF IND IA LTD. IT IS ALSO APPARENT ON RECORD THAT THERE IS NO MATERIAL WITH T HE ASSESSING OFFICER WITH REGARD TO THE ESCAPEMENT OF INCOME THEREFORE I N THE SAID CIRCUMSTANCES THE REOPENING U/S. 147 OF THE ACT DOE S NOT SEEMS JUSTIFIABLE. RELIANCE PLACED UPON THE 20 TAXMAN.CO M 784 (GUJ.) SADHBHAV ENGINEERING LTD. VS. DCIT AND ACIT VS. RAJ ESH JHAVERI STOCK BROKER PVT. LTD. 291 ITR 500 (SC) AND TELEC O DADAJEE DHACKJEE LTD. VS. DCIT IN ITA NO. 4163/MUM/2005. NO DOUBT IN VIEW OF THE SAID CIRCUMSTANCES THE LEARNED CIT(A) H AS PASSED THE ORDER ITA NO.1887/MUM/2013 ASSESSMENT YEAR: 2006-07 4 IN QUESTION JUDICIOUSLY AND CORRECTLY WHICH DOES NO T REQUIRE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. 3. IN RESULT THE APPEAL OF THE REVENUE IS HEREBY DI SMISSED ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MAY, 2016 SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) / ACCOUNTANT MEMBER #$ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 18 TH MAY, 2016 MP MP MP MP ' ( )# !* +*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ $$,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. ' / BY ORDER, ) $ //TRUE COPY// , / ' (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI